A.History and Development of the Company Belite Bio, Inc was incorporated in the Cayman Islands on March 27, 2018 as an exempted company with limited liability. Our legal name is Belite Bio, Inc and our commercial name is Belite Bio. We are engaged in research and development of novel therapeutics targeting significant unmet needs. The address of our registered office in Cayman Islands is located at the Office of Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands. Our principal executive offices are located at 12750 High Bluff Drive Suite 475, San Diego, CA 92130. Our telephone number at that address is +1-858-246-6240. Puglisi & Associates, or Puglisi, serves as our agent for service of process in the United States. Puglisi’s address is 850 Library Avenue, Suite 204, Newark, Delaware 19711. In June 2016, Lin BioScience, Inc., a public company in Taiwan (stock code: 6696.TW), which is the parent company of our largest shareholder, Lin Bioscience International Ltd., established Belite Bio Holdings Corp. (formerly known as Lin BioScience Holdings Corporation) and Belite Bio, LLC (formerly known as Lin BioScience, LLC), in Delaware. Belite Bio Holdings Corp. is an intermediate holding company and owns 100% equity interests in Belite Bio, LLC, which is mainly engaged in research and development of tinlarebant (a/k/a LBS-008) and LBS-009. In March 2018, as a part of a reorganization, Lin BioScience, Inc. established the Company (formerly known as Lin BioScience Co., Ltd.) in the Cayman Islands, as a subsidiary to its wholly-owned subsidiary Lin Bioscience International Ltd. In June 2018, as a part of the reorganization, Lin Bioscience International Ltd., acquired the entire equity interest in Belite Bio Holdings Corp. from Lin BioScience, Inc. and then contributed the entire equity interest in Belite Bio Holdings Corp. to us in July 2018. After this contribution, Belite Bio Holdings Corp. became our wholly-owned subsidiary, which in turn owns 100% equity interests in Belite Bio, LLC. Before and after the reorganization, we were, together with our subsidiaries, effectively controlled by the same shareholders, and therefore the reorganization is considered a recapitalization of entities under common control in accordance with Accounting Standards Codification (“ASC”) 805-50-25. The consolidation of us and our subsidiaries have been accounted for at historical cost in the accompanying consolidated financial statements in accordance with ASC 805-50-45-5. In August 2018, Belite Bio Holdings Corp. established RBP4 Pty Ltd in Australia as its wholly-owned subsidiary for carrying out clinical trials in Australia and tax refund purposes. In June 2021, we established Belite Bio (HK) Limited in Hong Kong as a wholly-owned subsidiary which established Belite Bio (Shanghai) Limited in Shanghai, China in August 2021 with the purpose of conducting clinical trials of our product candidates in China. In April 2022, we listed our ADSs on the Nasdaq Capital Market under the symbol “BLTE”. Upon the closing of IPO offering in April 2022, the Company issued to Benchmark Company, LLC (“Benchmark”) the representative of the underwriters warrants to purchase a number of ADSs equal to 169,302 ADSs (the “Representative’s Warrants”). The Representative’s Warrants have an exercise price equal to US$7.50 per ADS and are exercisable until the date on April 28, 2027. The Representative’s Warrants are also exercisable on a cashless basis. In June 2023, we completed a follow-on offering of (i) 2,000,000 ADSs, each representing one ordinary share of our Company, par value $0.0001 per share, for an aggregate proceeds of US$30 million and (ii) warrants to purchase 2,000,000 ordinary shares of our Company, with an exercise period of five year at an exercise price of US$18.00 per share. 75 Table of Contents On June 16, 2023, we entered into a Sales Agreement with SVB Securities LLC (now known as Leerink Partners LLC) and Cantor Fitzgerald & Co. (collectively, the “Sales Agents”) in connection with the offer and sale from time to time through an “at-the-market offering” (ATM) program, with SVB Securities LLC and Cantor Fitzgerald & Co. as sales agents, ordinary shares of our Company represented by ADSs of an aggregate offering price up to US$100 million. The Sales Agreement provided for the Company to pay SVB Securities LLC and Cantor Fitzgerald & Co. a commission of 3.0% of the aggregate gross proceeds from each sale of ADSs occurring pursuant to the Sales Agreement. The offer and sale of ADSs in the ATM offering were made pursuant to the Company’s shelf registration statement on Form F-3 that was declared effective by the SEC on May 30, 2023, the base prospectus contained therein dated May 30, 2023, and a prospectus supplement related to the ATM offering dated June 16, 2023. We sold 1,209,562 ADSs through the ATM program and received net proceeds from such sales of US$72.6 million as of December 31, 2025. On April 25, 2024, we entered into a securities purchase agreement (the “2024 April Securities Purchase Agreement”) with an institutional investor, relating to the registered direct offering of 651,380 ADSs, each representing one ordinary share, and warrants (the “Existing Warrants”) to purchase 651,380 ordinary shares represented by ADSs, at a price of $38.38 per ADS and accompanying warrant. The registered direct offering was made pursuant to the Company’s shelf registration statement on Form F-3 (File No. 333-272125), which was declared effective on May 30, 2023, the base prospectus contained therein dated May 30, 2023, and a prospectus supplement related to the registered direct offering dated April 29, 2024. On November 3, 2024, we entered into an inducement offer letter agreement (the “Letter Agreement”) with a healthcare focused institutional investor (the “Institutional Holder”) of the Company’s existing warrants to purchase 651,380 ordinary shares represented by ADSs, at a price of US$44.14 per ordinary share (the “Existing Warrants”). Pursuant to the Letter Agreement, the Institutional Holder agreed to exercise for cash its Existing Warrants to purchase an aggregate of 651,380 of the Company’s ordinary shares at an exercise price of US$44.14 per ordinary share in consideration of the Company’s agreement to issue to the Holder new warrants (the “New Warrants”), to purchase up to an aggregate of 651,380 ordinary shares (the “New Warrant Shares”), at an exercise price of US$70.00 per ordinary share. The closing of the transactions contemplated pursuant to the Letter Agreement occurred on November 4, 2024. In December 2024, we established Belite Bio (Taiwan) Inc in Taiwan as a wholly-owned subsidiary of Belite Bio (HK) Limited with the purpose of supporting clinical trial activities, research and development and back-office service in Taiwan. On February 5, 2025, we entered into another securities purchase agreement (the “2025 February Securities Purchase Agreement”) with an institutional investor, relating to the registered direct offering of 258,309 ADSs, each representing one ordinary share, and warrants to purchase 258,309 ordinary shares represented by ADSs, at a price of $58.07 per ADS and accompanying warrant. The warrants are exercisable immediately, expire five years from the date of issuance and have an exercise price of $58.07 per ADS. The registered direct offering was made pursuant to the Company’s shelf registration statement on Form F-3 (File No. 333-284521), which was filed on January 27, 2025, the base prospectus contained therein dated January 27, 2025, and a prospectus supplement related to the registered direct offering dated February 5, 2025. On August 6, 2025, we entered into a securities purchase agreement (the “2025 August Securities Purchase Agreement”) with an institutional investor, relating to the registered direct offering of 230,770 ADSs, each representing one ordinary share, and warrants to purchase 230,770 ordinary shares represented by ADSs, at a price of $65.00 per ADS and accompanying warrant. The warrants are exercisable immediately, expire five years from the date of issuance and have an exercise price of $65.00 per ADS. The registered direct offering was made pursuant to the Company’s shelf registration statement on Form F-3 (File No. 333-284521), which was filed on January 27, 2025, the base prospectus contained therein dated January 27, 2025, and a prospectus supplement related to the registered direct offering dated August 6, 2025. On September 8, 2025, we entered into certain securities purchase agreements (“2025 September Securities Purchase Agreements”) for a private placement in public equity financing with leading healthcare investors for the purchase and sale of 1,953,124 ordinary shares, and warrants to purchase 1,953,124 ordinary shares, at a purchase price of $64.00 per ordinary share and accompanying warrant. Each warrant will be immediately exercisable, expire two years from the date of issuance and have an exercise price of $76.80 per ordinary share. In September 2025, Belite Bio (HK) Limited established Belite Bio (Swiss) AG as a wholly-owned subsidiary in Switzerland. In November 2025, Belite Bio (Swiss) AG established Belite Bio Japan Inc. as a wholly-owned subsidiary in Japan. 76 Table of Contents In December 2025, we completed an underwritten follow-on offering of 2,272,727 ADSs, each representing one ordinary share, at a public offering price of $154.00 per ADS and for an aggregate proceeds of approximately US$350.0 million, with a 30-day option for the underwriters to purchase up to 340,909 additional ADSs at the public offering price. As of the Latest Practicable Date, the underwriters have exercised their option in full. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov. You can also find information on our website address belitebio.com. Our website and the information contained on, or accessible through, our website does not constitute a part of this Annual Report. We have included our website address in this Annual Report solely as an inactive textual reference. B.Business Overview Overview We are a clinical stage biopharmaceutical drug development company focused on advancing novel therapeutics targeting degenerative retinal diseases which have significant unmet medical need such as (i) Geographic Atrophy (GA), the late atrophic (“dry”) form of age-related macular degeneration (AMD), and (ii) Stargardt disease type 1 (STGD1). Both GA and STGD1 cause progressive loss of vision leading to permanent blindness in almost all cases. In addition to our lead product candidate (tinlarebant) which is intended for the treatment of GA and STGD1, our drug development pipeline also includes a small molecule, orally administered compound, LBS-009, which is intended for the treatment of metabolic diseases such as non-alcoholic fatty liver disease (NAFLD), nonalcoholic steatohepatitis (NASH), type 2 diabetes (T2D), and gout. Tinlarebant (LBS-008) Our lead product candidate, tinlarebant (a/k/a LBS-008), is an orally administered, once-a-day tablet intended as an early intervention for maintaining the health and integrity of retinal tissues in STGD1 and GA patients. Currently, there are no FDA approved treatments for STGD1 and no approved orally administered treatments for GA. Therefore, if approved, tinlarebant would be a novel oral therapeutic addressing an unmet medical need in both STGD1 and GA. In both STGD1 and GA, the accumulation of bisretinoid toxins has been implicated in the progression of retinal disease leading to irreversible blindness. Bisretinoids are derived from circulating retinol. Therefore, it is hypothesized that reduction of retinol delivery to the eye may reduce bisretinoid accumulation and slow disease progression in STGD1 and GA patients. The sole carrier protein for delivery of retinol to the eye is serum retinol binding protein 4, or RBP4. Developed from our RBP4 intellectual property portfolio, or RBP4 IP Portfolio, tinlarebant was designed to be a potent and reversible RBP4 antagonist. As an RBP4 antagonist, tinlarebant reduces the amount of retinol entering the visual cycle thereby reducing the formation of bisretinoid toxins which will ultimately preserve the health of the retina. We hold a worldwide exclusive license of the RBP4 IP Portfolio from Columbia University, which contains disclosure directed to over 400 structurally distinct RBP4 antagonists under patent protection in major pharmaceutical markets worldwide, including the United States, the European Union, China, Australia, Japan, South Korea and India. Tinlarebant was designed to target RBP4 as a means to sustain reduced retinol delivery to the eye and reduce the accumulation of bisretinoids in ocular tissue. Our available data suggest that this therapeutic approach could potentially slow disease progression and vision loss in patients affected with STGD1, which shares strong pathophysiologic similarities with GA. In clinical trials, tinlarebant has demonstrated a target specificity and potency that we believe could be clinically meaningful for STGD1 and GA patients. To support the clinical development of tinlarebant, as of mid-2020, we had completed one Phase 1 single ascending dose, or SAD, study in 40 healthy adult subjects in the U.S., one Phase 1 SAD study in 39 healthy adult subjects and one Phase 1 multiple ascending dose, or MAD, study in 32 healthy adult subjects in Australia. These studies involved 111 healthy adult subjects in total and evaluated the safety, toxicity, pharmacokinetics, or PK, and pharmacodynamics, or PD, of tinlarebant. 77 Table of Contents To support the clinical development of tinlarebant in STGD1, following completion of the Phase 1 studies, an open-label, dose-finding Phase 1b/2 clinical trial in adolescent STGD1 subjects was initiated in Australia and Taiwan. The study design included two portions: the Phase 1b portion was a 1-month dose finding study which enrolled 11 adolescent STGD1 subjects; the Phase 2 portion was a 24 month extension of the Phase 1b portion in which the 11 STGD1 subjects completing in Phase 1b were enrolled. Two additional adolescent STGD1 subjects were also enrolled, giving a total of 13 adolescent STGD1 subjects for the Phase 2 portion. The PD data from the Phase 1b portion revealed that during repeated daily dosing, tinlarebant can achieve a sustained mean RBP4 reduction of over 70%, relative to baseline values. A total of 12 subjects completed the Phase 2 portion of the study (1 subject was lost to follow up at Month 12). The 24-month data continued to support tinlarebant’s safety profile and showed no incidence of atrophic retinal lesions (referred to as definitely decreased autofluorescence or DDAF) in 5 of 12 subjects. In the 7 subjects showing DDAF lesion growth, the growth rate was significantly reduced when compared to historical control data obtained from adolescent STGD1 patients who participated in a 24-month natural history study known as ‘ProgStar.’ See “—Phase 1b/2 Clinical Trial in STGD1” below for more information. Based on data from the Phase 1b/2 study, a Phase 3 clinical trial named “DRAGON” in adolescent STGD1 patients aged 12 to 20 years was initiated. This study, which was a global, multi-center, randomized, double masked, placebo-controlled study designed to evaluate the safety and efficacy of tinlarebant in the treatment of adolescent STGD1 patients, has an enrollment of 104 subjects. In December 2025, we announced the top-line results of the Phase 3 DRAGON trial. We expect to submit an NDA to the FDA in the second quarter of 2026. The primary endpoint in the DRAGON trial was the difference in annualized aggregate lesion growth rates (detected as DDAF) between the tinlarebant and placebo groups over the 2-year treatment period. Lesion growth rates were analyzed using a mixed model for repeated measures (MMRM) and a pre-specified unstructured covariance matrix. As shown in the figure below, there was a progressive separation of the lesion growth trajectories throughout the treatment period in which the tinlarebant group showed reduced lesion growth at every measured timepoint compared to placebo. Statistical analysis revealed a 35.7% reduction in the annualized macular lesion growth rate in the tinlarebant group compared to placebo. This treatment effect was determined to be highly statistically significant (p=0.0033) signifying achievement of the primary endpoint. A post-hoc analysis performed using MMRM with an autoregressive covariance matrix produced a more profound statistical significance in tinlarebant group (p <0.0001). Tinlarebant (5 mg orally, daily) was well tolerated in STGD1 patients aged 12 to 20 years old. There were no study drug discontinuations due to non-ocular adverse events and four were related to the treatment-related ocular adverse events. Xanthopsia and delayed dark adaptation were the most common drug related ocular adverse events. The majority of adverse effects of xanthopsia, delayed dark adaptation, and night vision impairment were reported as mild, and most resolved during the trial. Headaches were the most commonly reported treatment-related non-ocular adverse events. 78 Table of Contents In addition to the completed Phase 3 DRAGON clinical trial, we are conducting a clinical trial of tinlarebant in STGD1 patients aged 12 to 20 years old in Japan, the United States and the United Kingdom (“DRAGON II”). The DRAGON II trial is a combination of a Phase 1b open-label study to evaluate the pharmacokinetics and pharmacodynamics of tinlarebant in adolescent Japanese STGD1 subjects and a 24-month, Phase 2/3, multi-center, randomized, double-masked, placebo-controlled study designed to evaluate the efficacy, safety and tolerability of tinlarebant. We have completed the Phase 1b portion of DRAGON II, and have completed the enrollment of the Phase 2/3 portion of the trial with a total of 73 subjects, including 15 Japanese subjects. The data from Japanese subjects is intended to facilitate future NDA applications in Japan. See “—Phase 3 Clinical Trial in STGD1” below for more information. To support the clinical development of tinlarebant in GA, in addition to the foregoing Phase 1 trials completed as of mid-2020, we have also completed a Phase 1b dose-finding trial in aged healthy adults to determine the appropriate dose for subjects with similar age and body mass index as GA patients. This trial was an open-label, parallel, single-dose, clinical trial designed to evaluate the PK and PD of tinlarebant in healthy subjects aged between 50 to 85. We identified a dose that we believe produces the desired PD effect against RBP4. Following the IND amendment submitted to FDA in January 2023, we randomized the first subject in a Phase 3 trial, named “PHOENIX”, in July 2023. PHOENIX is a global, multicenter, randomized, double‑masked, placebo-controlled study, designed to evaluate the safety and efficacy of tinlarebant in patients with GA associated with dry AMD. The trial has commenced in the U.S., the United Kingdom, France, Czech Republic, Switzerland, China, Taiwan, and Australia. As of the Latest Practicable Date, we have completed patient enrollment with a total of 530 subjects for this trial. See “—Phase 3 Clinical Trial in Geographic Atrophy” below for more information. STGD1 is a rare monogenic juvenile-onset macular dystrophy that is characterized by the aberrant and excessive accumulation of toxic vitamin A or by-products known as bisretinoids and cellular debris, or lipofuscin, which precedes the death of retinal tissue and loss of vision. Although an orphan disease, STGD1 is the most common juvenile macular dystrophy. Dry AMD is a heterogenous condition that arises from a complex interplay between age, genetics and environmental factors, such as diet and smoking, but has a pathology and course of disease that strongly resembles that of STGD1, particularly in intermediate and advanced stages. Currently, there are no FDA approved treatments for STGD1, and no FDA approved orally administered treatments for GA. Therefore, if approved, tinlarebant would be a novel oral therapeutic addressing an unmet medical need in both STGD1 and GA. In May 2025, the FDA granted Breakthrough Therapy Designation for tinlarebant for the treatment of STGD1. In February 2024, tinlarebant received Orphan Drug Designation in Japan. In addition, in June 2024, tinlarebant received Sakigake (Pioneer Drug) Designation by the Ministry of Health, Labour and Welfare in Japan (MHLW) for the treatment of STGD1. Sakigake designation was established by MHLW to accelerate drug approval process in Japan for innovative drugs with prominent effectiveness targeting serious diseases, in order to make them available to patients in Japan ahead of the rest of the world, by providing (a) prioritized consultation, (b) pre-application consultation, (c) prioritized review, (d) assignment of a review partner, and (e) extension of re-examination period. In May 2022, tinlarebant received Fast Track designation for the treatment of STGD1 in the United States. In September 2017, tinlarebant received orphan drug designation for the treatment of STGD1 in the United States, which entitles it to market exclusivity such that the U.S. Food and Drug Administration, or FDA, may not approve any other applications for a product for the same indication for 7 years, except in very limited circumstances. See “—Regulations — U.S. Regulation — NDA Submission and Review — Orphan Drug Designation and Exclusivity” for more information. Tinlarebant has also received orphan designation for the treatment of STGD1 in Europe, which entitles it to a 10-year period of market exclusivity, which may be reduced in certain circumstances. During this market exclusivity period, neither the European Medicines Agency, or EMA, nor the European Commission or member states can accept an application for, or grant a marketing authorization for, a “similar medicinal product.” See “—Regulations — European Regulation —  Orphan Designation and Exclusivity” for more information. Additionally, tinlarebant received orphan drug designation for the treatment of STGD1 in Japan in February 2024. This entitles it for up to a 10-year re-examination period, which works similarly as to a market exclusivity period for an existing drug. See “—Regulations — Japan Regulation —  Orphan Drug Designation” for more information. 79 Table of Contents In addition, tinlarebant has received rare pediatric disease designation in the United States and may be eligible for a priority review voucher. A priority review voucher may be awarded to a sponsor if it develops a drug for a rare pediatric disease and the drug is approved. The priority review voucher allows the sponsor of a subsequent NDA or Biologic License Application for any product candidate to expedite the FDA’s review goal from 6 months to 10 months. The priority review voucher may be sold to other companies that seek to expedite drug reviews. See “—Regulations — U.S. Regulation — NDA Submission and Review — Rare Pediatric Disease Designation and Priority Review Vouchers” for more information. In the last three years, priority review vouchers have sold in a medium price of approximately US$139 million. In the event that we or a sublicensee chooses to sell a priority review voucher, we or such sublicensee would be obligated to pay Columbia University a percentage of revenue in the low double-digits that we or such sublicensee receives from any such sale pursuant to the Columbia License Agreement. In the event that we or a sublicensee does not sell a priority review voucher within one year of receipt, the earned royalties that we would be obligated to pay to Columbia University based on net sales of licensed products would increase by 1%. See “ —  Intellectual Property — Patents — Patent License Agreement with The Trustees of Columbia University in the City of New York” for more information. Tinlarebant was selected by the National Institute of Health (NIH) Blueprint Neurotherapeutics Network (BPN) in 2011 as a promising drug candidate for treating dry AMD. The BPN was launched in 2004 to foster small-molecule neurotherapeutic development, bringing together a unique blend of grant dollars, industry-standard scientific expertise, and contract resources under a milestone-driven cooperative agreement program. The BPN criteria for selection of clinical drug candidates are based on multiple features of an applicant’s drug development program including the following: 1) strong biological rationale, 2) novel target for the disease, 3) strong data linking target to disease, 4) demonstration of preclinical pharmacodynamic effect and efficacy, 5) feasible path to clinic, and 6) IP free of roadblocks. Tinlarebant was funded by BPN from early discovery through Phase 1 SAD clinical trial in the United States. The mechanism of action utilized by tinlarebant has been recognized and recommended as a priority for clinical development in both STGD1 and dry AMD in a systematic review published by the U.K. National Institute for Health Research, or the NIHR, in 2018. The NIHR is funded by the U.K. Department of Health and Social Care and focuses on early translational research, clinical research and applied health and social care research for the purpose of enabling and delivering world-leading health and social care research that improves people’s health and wellbeing and promotes economic growth. The NIHR screened 7,948 articles in 2018 for its systematic review on treatments for dry AMD and STGD1. Its principal findings included that research focus should be at earlier stages in both diseases (before vision is impaired) and that the most promising treatments for both diseases appear to be prevention of lipofuscin and bisretinoid accumulation. Therefore, the NIHR recommended the mechanism of RBP4 inhibition, which is utilized by tinlarebant, as a promising treatment in dry AMD and STGD1. Currently, there are no FDA approved treatments for STGD1, and no FDA approved orally administered treatments for GA. The competitive landscape of treatments in STGD1 and GA includes several companies going through clinical development for their product candidates. Based on information available on clinicaltrials.gov, as of the date of this Annual Report, we understand that the tinlarebant Phase 3 STGD1 clinical study is the only completed Phase 3 clinical trial for STGD1, with one other company currently conducting an ongoing Phase 3 clinical trial for STGD1. In GA, there are five other companies advancing treatments, with three companies currently in Phase 3 development, and two companies which have completed Phase 3 development and received drug approval from the FDA for intravitreally injected therapeutic agents. Clinical Trials in Healthy Adult Subjects To support the clinical development of tinlarebant, we have completed one randomized, double-blind, placebo-controlled, Phase 1 SAD study in 40 healthy adult subjects in the United States, one randomized, double-blind, placebo-controlled, Phase 1 SAD study in 39 healthy adult subjects and one randomized, double-blind, placebo-controlled, Phase 1 MAD study in 32 healthy adult subjects in Australia. These studies were conducted to confirm the safety, toxicity, PK and PD of tinlarebant on a range of single ascending dose (10-50 mg in the US; 25-400 mg in Australia) / multiple ascending dose (5-25 mg in Australia) levels in heathy adult subjects in fasted / fed conditions. In the US SAD study, we found that single doses of 10–50 mg tinlarebant were well tolerated and reduced mean serum RBP4 level by around 70% from baseline. The degree of lowering of RBP4 plasma concentrations increased with increasing tinlarebant dose. This study also compared doses of tinlarebant taken with and without food, which did not show a food effect with dosing. 80 Table of Contents In the Australian SAD study, we found that single doses of 25-400 mg tinlarebant were well tolerated and reduced mean RBP4 level by > 70% from baseline. One subject in the 100 mg cohort experienced a drug-related adverse event of mild transient xanthopsia. That event was resolved within 48 hours. A direct correlation between the tinlarebant plasma concentration and RBP4 suppression was observed. In the Australian MAD study, we found that all dose levels were well tolerated and have identified an optimal daily dose to reduce serum RBP4 by >70% from baseline. Most drug-related adverse events reported were mild in severity, and the most frequently reported drug-related adverse event was asymptomatic Delayed Dark Adaptation, or DDA, which did not show dose proportionality and reflects a reduction in vitamin A levels in the eye, which is the intended effect of tinlarebant. No deaths, serious or severe adverse events were reported. The Safety Review Committee, or SRC, approved dose escalations after reviewing the safety data profile at each dose level. Additionally, to further support the clinical development of tinlarebant in GA, we have also completed an open-label, parallel, single-dose, Phase 1b dose-finding study to evaluate the PK and PD of tinlarebant in 16 healthy adult subjects aged between 50 and 85 in Australia. Through this study, we determined the optimal dose for subjects with similar age and body mass index as GA patients. Stargardt Disease In STGD1, we are developing tinlarebant as an orally administered, once-a-day tablet treatment to target RBP4 by disrupting vitamin A (retinol) binding to RBP4 which leads to reduced delivery of retinol to the eye and reduced accumulation of toxic vitamin A by-products. Stargardt disease type 1 (STGD1; OMIM #248200) is the most prevalent juvenile form of macular degeneration and currently, there is no approved treatment available. The disease is autosomal recessively inherited and caused by bi-allelic mutations in the ABCA4 gene, which leads to the accelerated formation and accumulation of toxic vitamin A by-products known as bisretinoids. The most prominent bisretinoid identified in human tissues is known as A2E (N-retinylidene-N-retinylethanolamine). The accumulation of A2E in ocular tissues causes progressive retinal cell death and permanent loss of vision. More than 2,800 unique DNA variants have been reported in the ABCA4 gene. A significant fraction of STGD1 patients suffers severe visual impairment by the age of 20. The prevalence of STGD1 is estimated to be between 1:7,800 and 1:6,400 in people of European descent. It is estimated that approximately between 47,000 and 59,000 US citizens are affected by STGD1; this estimate includes both adults and children. Although comprehensive epidemiological data on the prevalence of STGD1 for other populations is not available, estimates from genetic databases show a prevalence of about 1:15,000 to 1:11,500 in East-Asians and about 1:11,500 to 1:10,500 in South Asians. Phase 1b/2 Clinical Trial in STGD1 We have completed the Phase 1b portion of a Phase 1b/2 open-label, dose-finding study in 11 adolescent STGD1 subjects which has extended into a two-year, Phase 2 study with 13 adolescent STGD1 subjects in Taiwan and Australia. The Phase 1b portion was a dose-finding study designed to determine the optimal dose of tinlarebant and to evaluate safety, tolerability, PK and PD in adolescent STGD1 subjects for a treatment period of 2 cycles of 14-day daily dosing of tinlarebant (28 days of daily treatment) and a 14-day follow-up period. A daily dose which is effective to produce a mean RBP4 reduction of over 70%, relative to baseline values, was identified. We completed the Phase 2 portion of this study and we have obtained 24-month treatment data for a total of 12 subjects as of the Latest Practicable Date. The final 24-month data continued to demonstrate tinlarebant’s safety profile and show a sustained reduced DDAF lesion growth compared to natural history data from ProgStar participants over the two-year treatment period. Retinal imaging showed that 5 of 12 subjects remained free of atrophic retinal lesions (referred to as definitely decreased autofluorescence or DDAF) after 24 months of tinlarebant treatment. Visual acuity was stabilized in majority of subjects during the study with a mean loss of five letters following 24 months of treatment (a loss of <10 letters is not considered clinically significant). It is notable that a comparison of the 24-month DDAF lesion growth between tinlarebant-treated subjects and ProgStar participants possessing similar baseline characteristics (aged ≤18 years) showed a sustained lower DDAF lesion growth in tinlarebant-treated subjects over the 24-month treatment period (p<0.001). 81 Table of Contents Note: * Only 50 patients from ProgStar Cohort (aged ≤18) were included in the analysis due to one subject having ungradable screening FAF data 1. Strauss RW, Ho A, Muñoz B, et al. ProgStar Report No. 1. Ophthalmology. 2016;123(4):817-28. 2. Strauss RW, Muñoz B, Ho A, et al. ProgStar Report No. 9. JAMA Ophthalmol. 2017; 135(11):1232-1241. Phase 3 Clinical Trial in STGD1 Based on data from the Phase 1b/2 study, we have initiated a Phase 3 clinical trial named “DRAGON” in adolescent STGD1 patients aged 12 to 20 years. This study, which was a global, multi-center, randomized, double-masked, placebo-controlled study to evaluate the safety and efficacy of tinlarebant in the treatment of adolescent STGD1 patients, had an enrollment of 104 subjects. 82 Table of Contents In December 2025, we announced the top-line results of the Phase 3 DRAGON trial. We expect to submit an NDA to the FDA in the second quarter of 2026. The primary endpoint in the DRAGON trial was the difference in annualized aggregate lesion (DDAF) growth rates between the tinlarebant and placebo groups over the 2-year treatment period. Lesion growth rates were analyzed using a mixed model for repeated measures (MMRM) and a pre-specified unstructured covariance matrix. As shown in the figure below, there was a progressive separation of the lesion growth trajectories throughout the treatment period in which the tinlarebant group showed reduced lesion growth at every measured timepoint compared to placebo. Statistical analysis revealed a 35.7% reduction in the annualized macular lesion growth rate in the tinlarebant group compared to placebo. This treatment effect was determined to be highly statistically significant (p=0.0033) signifying achievement of the primary endpoint. A post-hoc analysis performed using MMRM with an autoregressive covariance matrix produced a more profound statistical significance in tinlarebant group (p <0.0001). Tinlarebant (5 mg orally, daily) was well tolerated in STGD1 patients aged 12 to 20 years old. There were no study drug discontinuations due to non-ocular adverse events and four were related to the treatment-related ocular adverse events. Xanthopsia and delayed dark adaptation were the most common drug related ocular adverse events. The majority of adverse effects of xanthopsia, delayed dark adaptation, and night vision impairment were reported as mild, and most resolved during the trial. Headaches were the most commonly reported treatment-related non-ocular adverse events. In addition to the completed Phase 3 DRAGON clinical trial, we are conducting a clinical trial of tinlarebant in STGD1 patients aged 12 to 20 years old in Japan, the United States and the United Kingdom (“DRAGON II”). The DRAGON II trial is a combination of a Phase 1b open-label study to evaluate the pharmacokinetics and pharmacodynamics of tinlarebant in adolescent Japanese STGD1 subjects and a 24-month, Phase 2/3, multi-center, randomized, double-masked, placebo-controlled study designed to evaluate the efficacy, safety and tolerability of tinlarebant. We have completed the Phase 1b portion of DRAGON II, and have completed the enrollment of the Phase 2/3 portion of the trial with a total of 73 subjects, including 15 Japanese subjects. The data from Japanese subjects is intended to facilitate future NDA applications in Japan. See “Item 3 — Key Information — D. Risk Factors — Risks Related to Our Industry, Business and Operations” for a further discussion of the risks we face in successfully developing and commercializing our product candidate. We intend to focus on adolescent patients in our ongoing clinical trials due to several benefits afforded by utilizing this patient population — namely, establishing proof-of-concept in the context of a more severe and rapidly progressing disease (i.e., STGD1 disease progression is faster in adolescent patients compared to adults or later-onset patients), and the ability to readily expand into the larger adult STGD1 population upon approval (i.e., drug approvals for pediatrics and/or adolescents are accepted for adults but drug approvals for adults are not accepted for pediatrics and/or adolescent populations due to safety concerns). Geographic Atrophy Because pathophysiology in STGD1 and GA are quite similar, we expect the treatment effect of tinlarebant in GA patients to be comparable to that observed in STGD1 patients. 83 Table of Contents AMD is an age-related form of macular degeneration. The most commonly used classification system for AMD is the Age-Related Eye Disease Study, or AREDS, classification system, which designates the following categories: ● Category 1 is designated as “No AMD” although there may be a few small (<63µm in diameter) yellowish subretinal deposits (i.e., drusen beneath the retina). ● Category 2 is designated as “Early AMD” and is characterized by multiple small drusen (<63µm in diameter), a few intermediate drusen (63-124µm in diameter), and abnormalities of the retinal pigment epithelium, or RPE, a monolayer of epithelial cells that lies beneath the retina and provides trophic and metabolic support to photoreceptor cells of the retina. ● Category 3 is designated as “Intermediate AMD” where there is extensive intermediate drusen, large drusen (>125µm in diameter), and/or non-center involving GA (i.e., localized atrophy of the retina), and increased lipofuscin in the RPE. ● Category 4 is designated as “Advanced AMD” and is characterized by GA or neovascular maculopathy (i.e., ‘wet’ AMD). “Wet” AMD represents approximately 10% of all AMD cases. Other stages of AMD, including GA, which are collectively referred to as dry AMD, represent approximately 90% of all AMD cases. Currently, there are no FDA approved orally administered treatments for GA and no FDA approved therapies for the other stages of dry AMD other than GA. Importantly, dry AMD is a leading cause of vision loss in older adults. Thus, there is a significant unmet medical need in treating dry AMD patients. There are an estimated 20 million AMD patients in the United States and over 196 million patients worldwide with an estimated global direct healthcare cost of US$255 billion. Disease progression in early dry AMD is very slow. The American Optometric Association reports that most people move through the process from diagnosis to legal blindness in about 10 years. Therefore, investigational therapies have been directed at the treatment of intermediate and advanced stages of dry AMD, which progress more rapidly than earlier stages. Unlike STGD1, dry AMD is believed to have a very heterogenous etiology, and various therapeutic approaches have been explored to slow disease progression in dry AMD. An important feature of advanced dry AMD, is the aberrant and excessive accumulation of lipofuscin and bisretinoid toxins, similar to STGD1. In these stages of dry AMD, retinal lesions (i.e., GA), in the majority of cases, are bordered on all sides by an annulus of autofluorescence which expands in a centrifugal manner followed by lesion expansion into the autofluorescent area. In vivo analyses of the autofluorescent area in advanced dry AMD eyes revealed an excitation maxima and fluorescence emission that is consistent with the spectral properties of bisretinoid toxins. Thus, the clinical presentation and biochemical features of advanced dry AMD suggest that a therapy directed at reducing the level of bisretinoid toxins may be effective to slow disease progression. Phase 3 Clinical Trial in Geographic Atrophy Following the IND amendment submitted to FDA in January 2023, we randomized the first subject in a Phase 3 trial, named “PHOENIX”, in July 2023. PHOENIX is a global, multicenter, randomized, double‑masked, placebo-controlled study, designed to evaluate the safety and efficacy of tinlarebant in patients with GA associated with dry AMD. The trial has commenced in the U.S., the United Kingdom, France, Czech Republic, Switzerland, China, Taiwan, and Australia. As of the Latest Practicable Date, we have completed patient enrollment with a total of 530 subjects for this trial. See “Item 3 — Key Information — D. Risk Factors — Risks Related to Our Industry, Business and Operations”. Phase 1b Clinical Trials in Healthy Adult Subjects (Single Ascending Dose Study in Australia) In November 2022, we received approval to commence an open-label, parallel, single-dose, Phase 1b dose-finding study in healthy adult subjects in Australia. As of the Latest Practicable Date, we have completed this Phase 1b study designed to evaluate the PK and PD of tinlarebant in 15 healthy adult subjects aged between 50 and 85. Through this study, the optimal dose for subjects with similar age and body mass index as GA patients has been determined. LBS-009 LBS-009 is an anti-RBP4 oral therapy targeting liver disease, including NAFLD, NASH, and T2D. 84 Table of Contents NAFLD occurs when an excess accumulation of fat damages the liver. Based on the data published by the Population Division of United Nations, it is estimated that approximately 1.8 billion adult patients suffer from NAFLD worldwide. Over time, liver damage and the associated inflammation can lead to the development of NASH, which is estimated to impact more than 9 million adult patients in the United States alone as of 2021. As the disease progresses, it can lead to cirrhosis and eventually, complete liver failure. T2D is a chronic disease that occurs when the body cannot effectively use insulin, the hormone that regulates blood sugar levels. The health impact of T2D is profound, potentially causing damage to the eyes, heart, blood vessels, kidneys, and nerves. According to International Diabetes Federation, T2D is on the rise, with approximately 536 million adult patients globally in 2021. Retinol-binding protein 4 (RBP4) is considered a potential biomarker and therapeutic target for NAFLD, NASH, and T2D. Research indicates a strong association between elevated RBP4 levels and the development of NAFLD, NASH, and T2D with studies showing that increased RBP4 can promote hepatic fat accumulation by inducing de novo lipogenesis, impairing fatty acid oxidation, and exacerbating insulin resistance within the liver, contributing to the progression of these diseases. LBS-009 is a small molecule designed to compete with retinol for RBP4 binding. When bound to LBS-009, RBP4 can no longer form a large molecular weight complex with transthyretin, or TTR. Consequently, the RBP4/LBS-009 complex can be removed from circulation by renal filtration. We believe that modulating RBP4 concentrations systemically with LBS-009 has a significant therapeutic potential for treating patients suffering from metabolically associated diseases, including NAFLD, NASH and T2D. LBS-009 is currently in preclinical development. Our Management and Clinical Advisory Board Our management team and ophthalmology clinical advisory board have deep experience and capabilities in multiple therapeutic areas and novel drug development. Our ophthalmology clinical advisory board includes key opinion leaders in the macular degeneration space, including Quan Nguyen, M.D., Professor of Ophthalmology at Stanford University, Michel Michaelides, M.D., Consultant Ophthalmologist at Moorfields Eye Hospital and Professor of Ophthalmology, UCL Institute of Ophthalmology, Robyn Guymer, M.D., Professor of Ophthalmology, University of Melbourne and Deputy Director of the Centre for Eye Research Australia and Frank Holz, M.D., Chairman of Ophthalmology, University of Bonn. Together, our management team and ophthalmology clinical advisory board, in connection with our exclusive technology platform, will allow our drugs to be tailored to target at-risk patients across the United States and worldwide, who lack access to necessary treatment in the macular degeneration space. Our Program Our lead product candidate, tinlarebant (a/k/a LBS-008), is an RBP4 antagonist. We are developing tinlarebant as an oral daily treatment for STGD1 and GA. 85 Table of Contents The following table summarizes key information about our clinical program for tinlarebant: Indication ​ ​ Clinical Trials ​ Trial Participants ​ ​ ​ Estimated Timeline STGD1 Phase 1 single and multiple ascending dose trial ​ Healthy adult subjects ​ Completed ​ ​ Phase 1b trial ​ Adolescent patients with STGD1 ​ Completed ​ ​ Phase 2 trial ​ Adolescent patients with STGD1 ​ Completed ​ ​ Phase 3 trial (DRAGON and DRAGON II) ​ Adolescent patients with STGD1 ​ Completed for DRAGONOngoing for DRAGON II GA ​ Phase 1 single and multiple ascending dose trial ​ Healthy adult subjects ​ Completed ​ ​ Phase 1b trial ​ Healthy adult subjects ​ Completed ​ ​ Phase 3 trial (PHOENIX) ​ Patients with GA associated with dry AMD ​ Ongoing ​ Research and Development and Technology The retina is a thin sheet of nerve tissue which lies along the back inside wall of the eye. Within the retina are two types of light-sensitive cells called photoreceptors. The light-sensing chemical molecule which rods and cones depend upon for proper functioning is delivered by an underlying tissue called the retinal pigment epithelium, or RPE. The RPE maintains the health and viability of photoreceptors by providing other nutrients from the blood and by ingesting the spent distal tips of rods and cones in a process called phagocytosis. The phagocytosis process is particularly important as it facilitates removal of toxic metabolites of vitamin A and other cellular material which has become heavily oxidized due to chronic light exposure. Under normal physiologic conditions, these metabolites are removed from the photoreceptors and transferred to the RPE for detoxification and recycling. It is theorized that, within a subset group of individuals predisposed to develop AMD, the removal and/or recycling process may be compromised. In this condition, the vitamin A metabolites linger within photoreceptors and spontaneously react with other cellular material resulting in chemically stable, toxic entities. These toxins then enter the RPE through the normal physiologic process of phagocytosis and inevitably poison the RPE. The toxins which accumulate within the RPE are derived primarily from vitamin A. Therefore, reducing the level of vitamin A circulating within the eye would be expected to reduce the toxic burden placed upon the RPE. An animal model which demonstrates excess accumulation of lipofuscin and vitamin A based toxin, known as A2E was utilized to determine whether the modulation of vitamin A entering RPE would be an effective therapeutic approach. Mechanism of Action Both STGD1 and dry AMD are characterized by the early aberrant accumulation of lipofuscin and cytotoxic bisretinoids. The most abundant autofluorescent bisretinoid that has been identified in human lipofuscin is known as A2E (N-retinylidene-N-retinylethanolamine), a spontaneously formed complex comprised of two molecules of retinal and one molecule of ethanolamine. Investigations of the potential toxicity of A2E in cell-based assays and animal models have shown that this compound is highly toxic and can kill RPE cells in a concentration-dependent manner through myriad mechanisms. Because A2E and related bisretinoids are derived from vitamin A (i.e., they are by-products of normal visual cycle function), therapeutic approaches have focused on reducing levels of vitamin A (retinol) in the eye. One approach that has been effective to reduce A2E and lipofuscin in a mouse model of STGD1 (i.e., Abca4−/− / Rdh8−/− mice) is based on reducing delivery of dietary retinol to the eye. In that mouse model, tinlarebant (a/k/a LBS-008) significantly reduced the accumulation of bisretinoid toxins that are known to cause STGD1 and have been implicated in progression of dry AMD. Importantly, treatment of Abca4−/− / Rdh8−/− mice with tinlarebant also prevented photoreceptor loss, which is believed to be caused by excessive levels of bisretinoid toxins. 86 Table of Contents Tinlarebant is a potent, orally administered small molecule RBP4 antagonist that has been specifically designed to reduce the delivery of retinol to the eye as a therapeutic approach towards reducing the accumulation of cytotoxic bisretinoids, preserving the integrity of retinal tissues, and ultimately slowing or preventing loss of vision. The delivery of retinol to the RPE requires RBP4 and the RPE expresses a specific RBP4 receptor (STRA6) to regulate vitamin A uptake. Other extrahepatic tissues do not require delivery of retinol bound to RBP4 and do not express the RBP4 receptor. These tissues are able to take up vitamin A bound to non-specific carriers such as lipoproteins, triglycerides, and albumin. Pathophysiologic Similarities in STGD1 and Intermediate to Advanced Dry AMD Early in vivo measurements of lipofuscin in STGD1 patients revealed an intrinsic autofluorescence which is localized to the RPE. A comprehensive biochemical analysis of post-mortem retinal tissue from STGD1 patients has shown a high concentration of bisretinoid compounds (vitamin A-based dimers) which would likely confer autofluorescence to lipofuscin due to the light absorbing and light emitting properties of these compounds. Thus, the intrinsic autofluorescent properties of lipofuscin in STGD1 can be attributed to the high concentrations of fluorescent vitamin A byproducts within lipofuscin particles. Importantly, this unique feature allows clinicians to diagnose and monitor the extent of retinal disease in STGD1 patients using fundus autofluorescence, or FAF, photography. In a recent prospective cohort study of childhood- onset STGD1 (n = 71 subjects; mean age of onset 9.6 ± 3.4 years), FAF photography was found to be a robust structural outcome measure. In that same study, a high rate of progression was observed in childhood-onset disease, making this subtype of STGD1 ideally suited to be considered for prioritization in clinical trials. An additional indication under consideration for tinlarebant is GA in dry AMD. This additional indication was selected based upon the strong pathophysiologic similarities between STGD1 and GA, which includes the aberrant and excessive accumulation of vitamin A-based toxins and cellular debris within ocular tissue. 87 Table of Contents The figure below shows a series of FAF images from a patient with late-onset STGD1 (top panels) and a patient with GA (lower panels). The images were taken at Baseline and at 4 subsequent time points out to 57 months and 55 months, for STGD1 and GA, respectively. In each of the images for the STGD1 patient and the GA patient, the central lesion is surrounded on all sides by autofluorescence which is consistent with the excitation/emission properties of A2E and related bisretinoids. In each patient, the pattern of disease progression from Baseline shows that as the autofluorescence grows in intensity and area, the lesioned tissue follows. Additionally, in the GA patient, the ‘evolution’ of areas of autofluorescence into lesioned tissue can be clearly seen. It is also important to note that in each disease the loss of visual acuity does not track with the expansion of lesioned tissue. This is due to a phenomenon of foveal sparing in both diseases which preserves the small area of tissue in the center of the retina that is responsible for conferring high visual acuity. In addition, as lesions encroach into the fovea, STGD1 and GA patients tend to utilize ‘eccentric fixation’ in which areas just peripheral to the fovea (non-lesioned retina) are used for reading and high visual acuity. ​ ​ Proof of Concept from Fenretinide Our confidence that reduction of serum RBP4 will be a viable treatment approach in STGD1 and GA comes from prospective clinical analyses of the natural history of disease progression in these diseases, and the findings from a 2-year Phase 2 proof-of-concept study that was conducted in dry AMD patients with GA. Fenretinide was selected for the study because of a prominent side effect that had been observed in subjects treated with fenretinide in various clinical oncology studies, a dose-dependent reduction in serum RBP4-retinol, due to its structural and chemical similarity to retinol. Fenretinide (N-(4-hydroxyphenyl) retinamide; also known as 4-HPR) is an analog of all-trans retinoic acid (ATRA) first synthesized in the late 1960s as an antineoplastic drug. The Phase 2 GA fenretinide study was a randomized, double-blind, placebo-controlled study with 246 subjects randomized into one of three treatment arms: placebo, 100 mg, or 300 mg. In this study, subjects in the 300 mg group who achieved RBP4 levels of ≤ 1 µM, which is equivalent to approximately 70% reduction of RBP4, showed a mean reduction of 0.33 mm2 in the yearly lesion growth rate compared with subjects in the placebo group (1.70 mm2/year vs. 2.03 mm2/year, respectively). However, due to its poor bioavailability and significantly lower affinity towards RBP4 as compared to tinlarebant, and therefore weaker potency, only a small subset of GA subjects achieved the criterion. Based on this data, we believe a sustained >70% reduction of RBP4 from baseline would provide the greatest potential for a treatment benefit and, therefore, represents the ‘therapeutic threshold’ to achieve in future clinical studies directed at reducing the accumulation of A2E and related bisretinoids as a means of preserving retinal tissue and functional vision. Safety of Long-Term RBP4 Inhibition In March 1987, a Phase 3 trial was initiated to assess the efficacy of a 5-year treatment regimen with fenretinide in reducing contralateral or second ipsilateral breast cancer in patients aged 30-70 years with early breast cancer, who had received no systemic treatment after primary treatment. A total of 2,867 assessable subjects completed the intervention period by July 1998. 88 Table of Contents Women were randomly assigned to receive no treatment (1,435 subjects) or 5-year fenretinide treatment (1,432 subjects). Fenretinide was administered in a gelatin capsule (200 mg) and was taken daily at dinner with a two-day drug holiday on weekends. Compared to baseline, plasma retinol levels decreased by a mean of approximately 71% (range: 61% – 88%) during fenretinide administration (P<0.0001). Mean plasma retinol concentrations during fenretinide treatment were ≤1 µM. Following the 5-year treatment regimen, a 28-day treatment cessation period was effective to restore retinol to baseline values. In terms of disease recurrence in the breast, the trial showed a possible beneficial effect of the compound in premenopausal women, and an opposite trend in postmenopausal women. End points considered for safety assessment were the occurrence of delayed dark adaptation, or DDA, dermatologic disorders, gastrointestinal symptoms, disorders of the ocular surface, and abnormal laboratory values. A comprehensive analysis of the safety data showed that the most common adverse events were DDA (cumulative incidence, 19.0%) and dermatologic disorders (18.6%). Less common events were gastrointestinal symptoms (13.0%) and disorders of the ocular surface (10.9%). In comparison, incidence figures in the control arm were 2.9% for DDA, 2.9% for dermatologic disorders, 5.4% for gastrointestinal symptoms, and 3.2% for disorders of the ocular surface. Symptoms occurring during fenretinide treatment tended to recover with time. No between-group difference was observed for the occurrence of laboratory data abnormalities. Overall, only 63 (4.4%) treatment discontinuations were caused by adverse events. The investigators of the study noted that given the large number of subjects involved in the study and the prolonged (i.e., over 5 years) intake of the drug, the experience on fenretinide tolerability can be considered reasonably reassuring. The observed clinical symptoms were often of minor importance, tended to recover spontaneously, and required permanent treatment discontinuation in a minority of cases. Stargardt Disease Background Autosomal recessive STGD1 is a rare monogenic juvenile-onset macular dystrophy that is characterized by the aberrant and excessive accumulation of toxic vitamin A by-products and cellular debris which precedes the death of retinal tissue and loss of vision. STGD1 is the most common inherited retinal dystrophy, with an average prevalence rate of approximately 1:8,800 based on a weighted population proportion calculation. The estimated patient population is approximately 53,000 in the United States and approximately 109,000 in China. The disease is typically diagnosed at a young age, often starting during childhood or adolescence, and is characterized by lesions within retinal tissue which cause severe and irreversible loss of visual acuity gradually leading to legally defined blindness at a very young age. Older age at onset (>20 years of age) is associated with slower disease progression. There are no FDA-approved treatments for STGD1. Individuals affected with STGD1 harbor mutations in a retina-specific ATP-binding cassette, or ABC, transporter gene, known as ABCA4. The ABCA4 gene encodes an ATP-dependent transporter, known as ABCA4, or Rim Protein. This protein resides at the rim of rod and cone photoreceptor disc membranes where it removes light-activated or ‘bleached’ visual chromophore (all-trans retinal) from the retina permitting detoxification by a retinal dehydrogenase (RDH8) which, in turn, allows recycling within the underlying RPE. The primary function of the RPE is to provide metabolic and trophic support to sustain health and integrity of the retina. The intimate association of the RPE with outer segments of rod and cone photoreceptors facilitates this function. 89 Table of Contents The RPE converts dietary vitamin A delivered from the blood circulation, and recycled retinol liberated from the retina following exposure to light, into visual chromophore (11-cis retinal). The visual chromophore is then transferred to the retina to maintain light sensitivity and function of the retina. The enzymatic conversion of dietary vitamin A to a light-sensitive visual chromophore is a unique process which only occurs within RPE cells and the ABCA4 protein plays a key role in this process — see figure below. The processing of vitamin A (aka, retinol, or all-trans retinol) in the visual cycle begins with the delivery of circulating retinol to the RPE. The ternary complex of RBP4-retinol-TTR is presented to RBP4 receptors which are located on the basal surface of RPE. The RBP4-TTR vehicle serves to solubilize retinol and produce a large molecular size complex which resists elimination in the kidney. Upon entry into the RPE, retinol undergoes a series of enzymatic reactions resulting in generation of the visual chromophore, 11-cis retinal. The visual chromophore is delivered to the retina where it combines with opsin to form the light-sensitive visual pigment, rhodopsin. Photoactivation of rhodopsin liberates all-trans retinal which is transported out of the retina by the ABCA4 protein. 90 Table of Contents In the absence of a functional ABCA4 protein, retinal accumulates within photoreceptor outer segments where it generates membrane-damaging reactive oxygen species, and also spontaneously reacts with cellular lipids and other retinaldehyde molecules. These retinal-retinal species, known as bisretinoids, and oxidized membranes are taken into the RPE through normal diurnal phagocytic processing where they gradually accumulate. It is theorized that these compounds reach a critical mass within RPE phagolysosomes and cause dysfunction of the metabolic activities of the RPE leading to early accelerated accumulation of lipofuscin which severely compromises the ability of the RPE to nourish the retina. Symptoms of STGD1 Source: https://makariwellness.com/stargardt-disease/ Preclinical Proof of Concept Abca4−/− / Rdh8−/− STGD1 mouse model In the Abca4−/− / Rdh8−/− double knockout STGD1 mouse model, daily dosing at approximately 25 mg/kg of tinlarebant was given for 12 weeks. A mean RBP4 reduction of approximately 90% in tinlarebant treated double knockout mice was achieved and led to an approximately 80% reduction of A2E, that are known to cause STGD1 and have been implicated in progression of dry AMD, compared to the untreated double knockout mice. ​ 91 Table of Contents Importantly, Outer Nuclear Layer, or ONL, thickness was significantly decreased in untreated ABCA4-/-/RDH8-/- mice, compared to the double knockout mice treated with tinlarebant. Macular degeneration in dry AMD and STGD1 is associated with thinning of the ONL which indicates loss of photoreceptor cells, which is believed to be caused by excessive levels of bisretinoid toxins. Clinical Development In September 2025, we completed the last subject visit in the Phase 3 clinical trial of tinlarebant named “DRAGON” in adolescent STGD1 patients from the United States, the United Kingdom, Germany, Netherlands, France, Belgium, Switzerland, China, Hong Kong, Taiwan, and Australia. Previously, we completed two Phase 1 clinical trials of tinlarebant in healthy adult subjects in mid-2020, a Phase 1b clinical trials of tinlarebant in adolescent STGD1 subjects in late 2021, and a Phase 2 clinical trial of tinlarebant in adolescent STGD1 subjects in late 2023. In addition, to facilitate future NDA applications in Japan, we have completed the Phase 1b PK/PD portion and are conducting a Phase 2/3 clinical trial of tinlarebant in adolescent STGD1 patients aged 12 to 20 years old in Japan, the United States and the United Kingdom (“DRAGON II”). Phase 3 Clinical Trial in STGD1 Based on data from the Phase 1b/2 study, we initiated a Phase 3 clinical trial named “DRAGON” in adolescent STGD1 patients aged 12 to 20 years. This study, which was a global, multi-center, randomized, double-masked, placebo-controlled study to evaluate the safety and efficacy of tinlarebant in the treatment of adolescent STGD1 patients, has an enrollment of 104 subjects. On February 26, 2025, the DSMB conducted a pre-specified interim analysis of the DRAGON trial which included an adaptive sample size re-estimation that would determine the need for an increase in sample size in order to enhance power. The interim analysis was performed after all subjects completed the one-year assessment. Following the interim analysis, the DSMB recommended the trial proceed without any modifications, which indicates that a sample size increase is not warranted. In addition, the DSMB recommended to submit the data for further regulatory review for drug approval. According to the DSMB, tinlarebant is well-tolerated and the safety profile remains consistent with previously observed data and the mechanism of action for tinlarebant. In addition, visual acuity was stabilized in the majority of subjects, with mean change from baseline of less than three letters under both standard and low luminance, throughout the two-year study. In May 2025, the FDA granted Breakthrough Therapy Designation for tinlarebant in the treatment of STGD1. In September 2025, we completed the last subject visit in the Phase 3 DRAGON trial. In December 2025, we announced the top-line results of the Phase 3 DRAGON trial. We expect to submit an NDA to the FDA in the second quarter of 2026. The primary endpoint in the DRAGON trial was the difference in annualized aggregate lesion (DDAF) growth rates between the tinlarebant and placebo groups over the 2-year treatment period. Lesion growth rates were analyzed using a mixed model for repeated measures (MMRM) and a pre-specified unstructured covariance matrix. As shown in the figure below, there was a progressive separation of the lesion growth trajectories throughout the treatment period in which the tinlarebant group showed reduced lesion growth at every measured timepoint compared to placebo. 92 Table of Contents Statistical analysis revealed a 35.7% reduction in the annualized macular lesion growth rate in the tinlarebant group compared to placebo. This treatment effect was determined to be highly statistically significant (p=0.0033) signifying achievement of the primary endpoint. A post-hoc analysis performed using MMRM with an autoregressive covariance matrix produced a more profound statistical significance in tinlarebant group (p <0.0001). Additionally, tinlarebant achieved a reduction in RBP4 levels by a mean of approximately 80% relative to baseline. Mean RBP4 levels returned to 84% of baseline one to three months following drug cessation, and recovery of RBP4 concentration correlated well with the decreased tinlarebant exposure. Tinlarebant (5 mg orally, daily) was well tolerated in STGD1 patients aged 12 to 20 years old. There were no study drug discontinuations due to non-ocular adverse events and four were related to the treatment-related ocular adverse events. Xanthopsia and delayed dark adaptation were the most common drug related ocular adverse events. The majority of adverse effects of xanthopsia, delayed dark adaptation, and night vision impairment were reported as mild, and most resolved during the trial. Headaches were the most commonly reported treatment-related non-ocular adverse events. Phase 2/3 Clinical Trial in STGD1 In addition to the completed Phase 3 DRAGON clinical trial, we are conducting a clinical trial of tinlarebant in STGD1 patients aged 12 to 20 years old in Japan, the United States and the United Kingdom (“DRAGON II”). The DRAGON II trial is a combination of a Phase 1b open-label study to evaluate the pharmacokinetics and pharmacodynamics of tinlarebant in adolescent Japanese STGD1 subjects and a 24-month, Phase 2/3, multi-center, randomized, double-masked, placebo-controlled study designed to evaluate the efficacy, safety and tolerability of tinlarebant. We have completed the Phase 1b portion of DRAGON II, and have completed the enrollment of the Phase 2/3 portion of the trial with a total of 73 subjects, including 15 Japanese subjects. The data from Japanese subjects is intended to facilitate future NDA applications in Japan. Phase 1b/2 Clinical Trial in STGD1 We initiated an open-label, dose-finding Phase 1b/2 clinical trial in adolescent STGD1 patients in mid-2020 in Australia and Taiwan and have completed the trial. The study design includes two portions: Phase 1b and Phase 2. We have completed the Phase 1b portion of this study in 11 adolescent STGD1 subjects which has extended into a two-year, Phase 2 study with 13 adolescent STGD1 subjects in Australia and Taiwan. As of the Latest Practicable Date, data is available for the 11 subjects who have completed the Phase 1b portion and for the 12 subjects who have completed the 24-month of treatment. 93 Table of Contents The Phase 1b portion is a dose-finding study designed to determine the optimal dose of tinlarebant and to evaluate safety, tolerability, PK and PD in adolescent STGD1 patients for a treatment period of 2 cycles of 14-day daily dosing of tinlarebant (28 days of daily treatment) and a 14-day follow-up period. The Phase 2 portion consists of a 2-year treatment period with a follow-up period of one month. In the Phase 2 portion of the study, in addition to monitoring the safety and tolerability, we aimed to monitor PK and PD biomarkers (RBP4 and retinol) and the effects of treatment using various retinal imaging modalities (including DDAF, QDAF, SD-OCT, and microperimetry), change in BCVA, and the relationship between the change in RBP4 levels and rate of lesion growth. Furthermore, a Safety Review Committee, or SRC, and an independent Data and Safety Monitoring Board, or DSMB, were formed to monitor the Phase 1b portion of this study to evaluate all the safety, toxicity, and dose response data and provide recommendations for the appropriate dose to be used for Phase 2. The DSMB monitored the safety and efficacy trends throughout the Phase 2 study. Efficacy Results The PD profile from adolescent STGD1 subjects during the Phase 1b portion showed a mean RBP4 reduction of ~80%, relative to baseline values. This PD effect was maintained throughout the 28-day daily dosing period. Mean RBP4 levels returned toward baseline values following 14 days of drug cessation. In this study, the concentration of tinlarebant in plasma and reduction of RBP4 showed a correlation. Pharmacodynamic profiles obtained from heathy adults and in adolescent STGD1 subjects under an identical dosing regimen showed similar dose-dependent reductions of RBP4 and a return of RBP4 toward baseline following drug cessation. Mean Reduction of Plasma RBP4 in Adolescent STGD1 Subjects (Phase 1b) Note: These data represent a mean profile obtained from 6 subjects in Australian site. Data from the remaining 5 subjects in Taiwan could not be collected due to COVID-19 restrictions at the clinical site in Taiwan. Upon completion of the Phase 1b portion, an optimal daily dose was identified and which was able to achieve a mean RBP4 reduction of > 70%, relative to baseline values. 94 Table of Contents We completed the Phase 2 portion of this study and we have obtained 24-month treatment data for a total of 12 subjects as of the Latest Practicable Date. The final 24-month data of the Phase 2 trial continued to demonstrate tinlarebant’s safety profile, and show a sustained reduced DDAF lesion growth compared to natural history data from adolescent STGD1 patients who participated in a 24-month natural history study known as “ProgStar.” Retinal imaging showed that 5 of 12 subjects remained free of atrophic retinal lesions (referred to as definitely decreased autofluorescence or DDAF) after 24 months of tinlarebant treatment. In the 7 subjects showing DDAF lesion growth, the growth rate was significantly reduced when compared to historical control data obtained from ProgStar participants. Visual acuity was stabilized in majority of subjects during the study with a mean loss of five letters following 24 months of treatment (a loss of <10 letters is not considered clinically significant). It is notable that a comparison of the 24-month DDAF lesion growth between tinlarebant-treated subjects and ProgStar participants possessing similar baseline characteristics (aged ≤18 years) showed a sustained lower DDAF lesion growth in tinlarebant-treated subjects over the 24-month treatment period (p<0.001). Note: * Only 50 patients from ProgStar Cohort (aged ≤18) were included in the analysis due to one subject having ungradable screening FAF data 1. Strauss RW, Ho A, Muñoz B, et al. ProgStar Report No. 1. Ophthalmology. 2016;123(4):817-28. 2. Strauss RW, Muñoz B, Ho A, et al. ProgStar Report No. 9. JAMA Ophthalmol. 2017; 135(11):1232-1241. ​ 95 Table of Contents Phase 1b/2 Safety Results Adverse events reported during the Phase 1b study were consistent with tinlarebant’s mechanism of action and included delayed dark adaptation (DDA) and transient chromatopsia in 7 of 11 subjects (or 63.6%), which were all graded as mild. It is notable that the majority of DDA cases required confirmation by laboratory measure (dark adaptometry) as many subjects were asymptomatic. The findings of DDA, xanthopsia, and other visual changes were monitored and determined to be reversible. In addition, there were no clinically significant findings related to vital signs, physical exams, or electrocardiograms. There were no deaths nor serious adverse events reported and no adverse events that required discontinuation of tinlarebant. The 24-month safety results of the Phase 2 study showed that ocular adverse events that were considered related to tinlarebant were reported in 12 of 13 subjects (or 92.3%). The most common ocular treatment-related adverse events included xanthopsia/chromatopsia (8 of 13 subjects, or 61.5%) and delayed dark adaptation (7 of 13 subjects, or 53.8%). No deaths nor serious or severe adverse events were reported. In addition, there were no clinically significant findings related to vital signs, physical exams, or electrocardiograms. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Frequency Treatment-Related Adverse Events ​ ​ ​ Severity ​ ​ ​ (#Subjects) Xanthopsia/Chromatopsia ​ Mild ​ 8/13 Delayed Dark Adaptation (DDA) Mild 7/13 Delayed light adaptation ​ Mild ​ 1/13 Night Vision Impairment Mild 1/13 Visual impairment ​ Mild ​ 1/13 Blepharospasm ​ Mild ​ 1/13 Headache Mild 1/13 ​ Geographic Atrophy Background Age-related macular degeneration, or AMD, is a common eye disorder among people over 50. It causes blurred or reduced central vision, due to thinning of the macula. The macula is the part of the retina responsible for clear vision in your direct line of sight. Symptoms of Dry AMD Source: https://www.ncbi.ie/supporting-you/everyday-living/eye-conditions/age-related-macular- degeneration-amd/ Based on the classification system established in the AREDS, AMD has four stages, all of which may occur in one or both eyes: ● Category 1 is designated as “No AMD” although there may be a few small (<63µm in diameter) yellowish subretinal deposits (i.e., drusen beneath the retina). ● Category 2 is designated as “Early AMD” and is characterized by multiple small drusen (<20µm in diameter), a few intermediate drusen (63-124µm in diameter), and abnormalities of the retinal pigment epithelium, or RPE, a monolayer of epithelial cells that lies beneath the retina and provides trophic and metabolic support to photoreceptor cells of the retina. ● Category 3 is designated as “Intermediate AMD” where there is extensive intermediate drusen, large drusen (>125µm in diameter), and/or non-center involving GA (i.e., localized atrophy of the retina), and increased lipofuscin in the RPE. 96 Table of Contents ● Category 4 is designated as “Advanced AMD” and is characterized by GA or neovascular maculopathy (i.e., ‘wet’ AMD). “Wet” AMD represents approximately 10% of all AMD cases. Other stages of AMD, including GA, which are collectively referred to as dry AMD, represent approximately 90% of all AMD cases. Currently, there are no FDA approved orally administered treatments for GA and no FDA approved therapies for the other stages of dry AMD other than GA. Clinical Development As of the Latest Practicable Date, we have completed patient enrollment with a total of 530 subjects for our Phase 3 clinical trial named “PHOENIX” in GA subjects. In January 2023, we completed a Phase 1b dose-finding study in healthy adult subjects in Australia, which was an open-label, parallel, single-dose clinical trial designed to evaluate the PK and PD of tinlarebant in 15 healthy adult subjects aged between 50 to 85. Phase 3 Clinical Trial in Geographic Atrophy We confirmed the clinical trial design of our Phase 3 study in GA patients with the FDA in November 2022. Following the IND amendment submitted to FDA in January 2023, we initiated this Phase 3 study named “PHOENIX”. PHOENIX is a global, multicenter, randomized, double‑masked, placebo-controlled study, designed to evaluate the safety and efficacy of tinlarebant in patients with GA associated with dry AMD. The PHOENIX trial consists of a screening period, a treatment period of 2 years, and a follow-up period. A total of 530 subjects have been enrolled in this study with a 2:1 randomization (active:placebo). The trial has commenced in the United States, the United Kingdom, France, Czech Republic, Switzerland, China, Taiwan, and Australia. The primary end point in the PHOENIX trial will be based upon the slowing of atrophic lesion growth rate from baseline to month 24, compared to placebo. Safety and tolerability will also be assessed during the clinical study period. An interim analysis is expected to be conducted for the PHOENIX trial. The first subject of this study was enrolled in July 2023. See “Item 3 — Key Information — D. Risk Factors — Risks Related to Our Industry, Business and Operations” for a further discussion of the risks we face in successfully developing and commercializing our product candidate. Clinical Trials in Healthy Adult Subjects Phase 1 Clinical Trials in Healthy Adult Subjects (Single and Multiple Ascending Dose Studies in Australia) We have completed randomized, double-blind, placebo-controlled, single and multiple ascending dose Phase 1 trials of tinlarebant in 71 healthy adult subjects in July 2020 in Australia. 39 (including 10 placebo) and 32 (including 8 placebo) healthy adult subjects were enrolled in single ascending dose and multiple ascending dose, respectively. Sample sizes were selected based on clinical and practical considerations. Our primary outcome was to evaluate the safety and toxicity (drug-related adverse events and their severity/frequency), PK, and PD biomarkers (RBP4 and retinol) on a range of single ascending dose levels (from 25-400 mg) and multiple ascending dose levels (from 5-25 mg) of tinlarebant in heathy adult subjects in fasted conditions. Furthermore, a SRC was formed to monitor and evaluate the safety data for the Phase 1 SAD and MAD studies. Efficacy Results In the SAD study, we found that single doses of 25 – 400 mg tinlarebant were well tolerated and reduced mean RBP4 level by > 70% from baseline. A direct correlation between the tinlarebant plasma concentration and RBP4 suppression was observed. Similar results were observed in the MAD portion of the study. All dose levels were well tolerated and a daily dose which produced a mean RBP4 reduction of ~80%, relative to baseline values, was identified. 97 Table of Contents Mean Reduction of Plasma RBP4 in Healthy Adult Subjects (Phase 1 MAD, excludes placebo) Safety Results All single ascending dose levels were well tolerated, including single ascending dose levels up to 400mg. One subject in the 100 mg cohort experienced a drug-related adverse event of mild transient xanthopsia. That event was resolved within 48 hours. Drug-related adverse events in the SAD portion of the study Adverse Events ​ ​ ​ Severity ​ ​ ​ Frequency (#Subjects) Xanthopsia – yellow being more prominent in their color vision Mild 1/29 ​ All multiple ascending dose levels were also well tolerated. Most drug-related adverse events reported were mild in severity, and the most frequently reported drug-related adverse event was asymptomatic DDA, which did not show dose proportionality and reflects a reduction in vitamin A levels in the eye, which is the intended effect of tinlarebant. No deaths, serious or severe adverse events were reported. The SRC approved dose escalations after reviewing the safety data profile at each dose level. Drug-related adverse events in the MAD portion of the study Adverse Events ​ ​ ​ ​ Severity ​ ​ ​ Frequency (#Subjects) Delayed Dark Adaptation (DDA) Mild 16/24 Xanthopsia – yellow being more prominent in their colour vision Mild 1/24 Photophobia – sensitivity to light Mild 1/24 Ocular migraine Mild 1/24 Intermittent dyspepsia (indigestion) Mild 1/24 Migraine Moderate 1/24 ​ Phase 1 Clinical Trial in Healthy Adult Subjects (Single Ascending Dose Study in the United States) We completed a randomized, double-blind, placebo-controlled, single ascending dose Phase 1 trial of tinlarebant in 40 (including 10 placebo) healthy adult subjects in May 2020 in the United States. Our primary outcome was to evaluate the safety and toxicity (drug-related adverse events and their severity/frequency), PK, and PD biomarkers (RBP4 and retinol) on a range of single ascending dose levels, ranging from 10-50 mg, of tinlarebant in heathy adult subjects in fasted and fed conditions. 98 Table of Contents Efficacy Results We found that single doses of 10–50 mg tinlarebant were well tolerated and reduced mean serum RBP4 level by around 70% from baseline. Following administration of a single oral dose of tinlarebant, RBP4 level reached a minimum within 24-48 hours post-dose. Thereafter, RBP4 levels increased, returning to baseline levels generally by Day 12 post-dose compared with placebo subjects. The degree of lowering of RBP4 plasma concentrations increased with increasing tinlarebant dose. This study also compared doses of tinlarebant taken with and without food, which did not show a food effect with dosing. Safety Results All dose levels in this single ascending study were well tolerated. There were no reported drug-related adverse events in this Phase 1 study. Phase 1b Clinical Trials in Healthy Adult Subjects (Single Ascending Dose Study in Australia) In November 2022, we received approval to commence an open-label, parallel, single-dose, Phase 1b dose-finding study in healthy adult subjects in Australia. As of the Latest Practicable Date, we have completed this Phase 1b study designed to evaluate the PK and PD of tinlarebant in 15 healthy adult subjects aged between 50 and 85. Through this study, the optimal dose for subjects with similar age and body mass index as GA patients has been determined. LBS-009 for NAFLD / NASH and T2D LBS-009 is an anti-RBP4 oral therapy targeting liver disease, including NAFLD, NASH and T2D. Currently, many compounds under investigation are focused on pathways associated with metabolism, inflammation, and fibrosis but they have demonstrated varied levels of efficacy often with conflicting results. RBP4 is secreted by the liver and adipose tissue and has recently been identified as a pro-inflammatory cytokine in preclinical models of insulin resistance and liver disease. Therefore, RBP4 is currently being investigated as a clinical biomarker for human metabolic diseases. Clinical studies have found a significant association between elevated RBP4 levels in the circulation, impaired glucose tolerance, and NAFLD. Transgenic mice overexpressing RBP4 had a higher incidence of insulin resistance, a comorbid condition for NAFLD and NASH, and preclinical reports demonstrate that modulating RBP4 levels in the circulation will improve insulin resistance and reduce liver fat accumulation. LBS-009 is a small molecule designed to compete with retinol for binding to RBP4. When bound to LBS-009, RBP4 can no longer form a large molecular weight complex with transthyretin. Consequently, the RBP4/LBS-009 complex will be removed from circulation by renal filtration. Preliminary PD studies with LBS-009 demonstrated the ability to reduce RBP4 levels in healthy rats by 85% following a single dose. Efficacy studies have been conducted in the ob/ob high-fat diet induced mouse model of metabolic disease. Treatment with LBS-009 significantly reduced RBP4 concentrations both in circulation and in adipose tissue, or fat tissue, resulting in improved insulin activity and glucose tolerance. Mice in these studies were dosed daily with LBS-009 for up to 16 weeks without any observed adverse effects. We believe that by therapeutically antagonizing RBP4 and reducing its concentration in the blood, we can mitigate local concentration of RBP4 in adipose tissue and reduce inflammation, thereby improving the metabolic phenotype. In preclinical studies, LBS-009 has shown the ability to ameliorate steatosis in transgenic mice, suggesting that antagonism of RBP4 with LBS-009 may serve as a potential pharmacotherapy for NASH. Research and Development Governance The research and development of drug products is a lengthy and expensive process. We have established research and development policies for all stages of our research and development activities, through our internal research project initiation processes and our preclinical and clinical development programs. Our research and development policies have enabled our senior management to continuously oversee and monitor our Company’s research and development activities for compliance with applicable laws, regulations, rules, guidelines and internal policies. 99 Table of Contents Our in-house discovery, research and development team focuses on identifying small-molecule compounds in our core therapeutic areas of macular degeneration and age-related metabolic diseases. The initiation of our research and development process begins with the identification and establishment of a research project. Upon conclusion of this initial process, an internal project report is produced by the research project team, which includes topics such as project background, significance, development history and research status, mechanism of action, PK, PD, clinical application, safety, drug interaction and market analysis, among other things. We have relied on and plan to continue to rely on third-party CROs to monitor and manage data for some of our ongoing preclinical studies and clinical trials. We follow the highest industry standards to select the CROs that are going to conduct the services in order to meet FDA and other regulatory requirements. Manufacturing and Supply We currently rely on high-quality contract manufacturers to help produce preclinical and clinical supplies for our product candidate. We have assembled a seasoned internal team with deep experience in the field of chemistry to drive and help monitor our CMO processes and any external scale-up manufacturing. Our internal team monitors the manufacturing activities of research and development study material at our contract manufacturers to ensure compliance with local and international cGMP and applicable regulations. The current manufacturing processes have been scaled up to support manufacturing of NDA submission batches. Our primary raw materials include active pharmaceutical ingredients, which may be sourced from multiple suppliers whose prices may be subject to volatility. We have not experienced any material volatility in raw material prices and believe our suppliers have sufficient capacity to meet our demands for raw materials. In addition, we believe that adequate alternative sources for such supplies exist. Notwithstanding the foregoing, we will continue to monitor the potential impact of geopolitical conflicts (such as the ongoing conflict in Iran and the surrounding regions) on our raw material prices and supply chain. We will continue to assess these risks and take such measures as we deem appropriate to mitigate any adverse impact on our supply chain and operations. Intellectual Property Our commercial success depends in large part on our ability to obtain and maintain intellectual property and other proprietary protection for our product candidates, technologies, inventions, trade secrets and other know-how, as well as on our ability to defend and enforce our intellectual property or proprietary rights including any patent that we have or may issue from our owned, co-owned, or in-licensed patent applications, preserve the confidentiality of our trade secrets and operate without infringing, misappropriating or otherwise violating the valid and enforceable intellectual property and proprietary rights of other parties. We protect our proprietary and intellectual property position by, among other methods, licensing or filing in the United States and foreign jurisdictions, patent applications related to our proprietary technology, inventions and improvements that are important to the development and implementation of our business. We also seek to protect our trade secrets, know-how and continuing technological innovation through contractual obligations with third parties. Patents We have developed our lead product candidate, tinlarebant (a/k/a LBS-008), based on technology that we have exclusively licensed from the Trustees of Columbia University in the City of New York, or Columbia University, pursuant to a license agreement with Columbia University, as amended, that was assigned to us from Lin Bioscience International Ltd., our largest shareholder. As of the Latest Practicable Date, the intellectual property in-licensed under our license agreement with Columbia University, including co-owned patents and patent applications, includes nine active patent families, which encompasses 24 issued U.S. patents (inclusive of allowed applications) and four pending U.S. patent applications, including original filings, continuations and divisional applications. The families also include numerous foreign counterparts, with claims granted or pending in Europe, China, Japan, South Korea, Australia and elsewhere. These licensed patent rights relate to methods of use, manufacture and compositions of matter and include issued patents with claims that recite a class of compounds directed to covering our lead compound, tinlarebant, and specifically recite tinlarebant. In terms of our key family of composition of matter patents, these include compounds of tinlarebant and LBS-009, and structurally similar derivatives, along with their methods of use in ophthalmic and metabolic indications. These issued patents covering tinlarebant and LBS-009 are expected to expire between 2034 and 2035, absent any patent term extensions. 100 Table of Contents As of the Latest Practicable Date, we own and co-own eight active patent families, which encompasses six issued U.S. patents (inclusive of allowed applications) and eight pending U.S. patent applications, including provisional filings. These patent families also contain numerous foreign counterparts, with claims pending in Europe, China, South Korea, Australia, Japan, India, Taiwan and elsewhere. These patent rights relate to methods of use, formulations, companion diagnostics, and methods for assessing visual function. Any patents issued from these patent applications are expected to expire between 2038 and 2046, absent any patent term adjustments or extensions. In-licensed Patents and Patent Applications Patent Family No. ​ ​ ​ Type of Patent ​ ​ ​ Issued Countries/ Regions and/or Application Type ​ ​ ​ Pending Countries/ Regions and/or Application Type ​ ​ ​ Expected Termination Date (mm/dd/yyyy) ​ ​ ​ Subject to “March-in Rights” (Yes/ No) 1 ​ Utility – Methods of Use ​ U.S. Europe Japan ​ N.A. ​ 11/22/2031 ​ Yes 2 ​ Utility – Methods of Use ​ U.S. ​ N.A. ​ 04/30/2033 ​ Yes 3 ​ Utility – Manufacture and Composition of Matter ​ U.S.U.S. Divisional #1U.S. Divisional #2 U.S. Continuation #1EuropeEurope DivisionalHong Kong ​ U.S. Continuation #2 ​ 03/13/2034 ​ Yes 4 ​ Utility – Manufacture and Composition of Matter ​ U.S. U.S. Continuation #1 U.S. Continuation #2 Europe ​ N.A. ​ 03/13/2034 ​ Yes 5 ​ Utility – Manufacture and Composition of Matter ​ U.S. U.S. Divisional ​ N.A. ​ 03/13/2034 ​ Yes 6 ​ Utility – Manufacture and Composition of Matter ​ U.S. U.S. Continuation ​ N.A. ​ 03/13/2034 ​ Yes 7 ​ Utility – Manufacture and Composition of Matter ​ U.S.U.S. Continuation #1U.S. Continuation #2U.S. Continuation #3U.S. Continuation #4U.S. Continuation #5U.S. Continuation #6EuropeEurope Divisional #1AustraliaIndiaMexicoJapanPhilippinesChinaChina Divisional SingaporeIndonesiaSouth KoreaHong Kong CanadaBrazil New Zealand ​ U.S. Continuation #7Europe Divisional #2Hong Kong DivisionalMalaysiaThailand ​ 04/29/2035 ​ Yes 8 ​ Utility – Methods of Use ​ U.S. ​ U.S. ContinuationEuropeHong KongChinaChina Divisional ​ 08/01/2039 ​ Yes ​ 101 Table of Contents Co-owned Patents and Patent Applications Patent Family No. ​ ​ ​ Type of Patent ​ ​ ​ Issued Countries/ Regions and/or Application Type ​ ​ ​ Pending Countries/ Regions and/or Application Type ​ ​ ​ Expected Termination Date (mm/dd/yyyy) ​ ​ ​ Subject to “March-in Rights” (Yes/ No) 9 ​ Utility – Methods of Use ​ U.S.U.S. Divisional #1U.S. Divisional #2 Taiwan ​ U.S.ContinuationEuropeHong Kong ​ 06/14/2038 ​ Yes Belite-owned Patents or Patent Applications Patent Family No. ​ ​ ​ Type of Patent ​ ​ ​ Issued Countries/ Regions and/or Application Type ​ ​ ​ Pending Countries/ Regions and/or Application Type ​ ​ ​ Expected Termination Date (mm/dd/yyyy) ​ ​ ​ Subject to “March-in Rights” (Yes/ No) 10 ​ Utility – Methods of Use ​ U.S. U.S. Continuation #1 Taiwan ​ U.S. Continuation #2 Europe Hong Kong ​ 06/14/2038 ​ No 11 ​ Utility – Formulations ​ U.S. Track One Australia ​ U.S. Europe Australia Divisional Canada China Divisional India Israel Japan Japan Divisional South Korea Singapore Taiwan Hong Kong ​ 07/06/2040 ​ No 12 ​ Utility – Companion Diagnostics ​ N.A. ​ U.S. Europe Taiwan China Australia Japan Korea ​ 05/20/2042 ​ No 13 ​ Utility – Formulation ​ N.A. ​ U.S. Europe Australia Canada China Israel Japan South Korea Singapore Taiwan Thailand ​ 11/22/2042 ​ No 14 ​ Utility – Assessing Visual Function ​ N.A. ​ U.S.EuropeHong KongChileChina JapanUnited Arab Emirates ​ 04/11/2043 ​ No 15 ​ Utility – Formulation ​ N.A. ​ U.S. Provisional ​ 04/17/2046 ​ No 16 ​ Utility – Methods of Use ​ N.A. ​ U.S. Provisional ​ 11/30/2046 ​ No ​ 102 Table of Contents The term of individual issued patents depends upon the legal term for patents in the countries in which they are obtained. In most countries in which we have filed, including the United States, the patent term is 20 years from the earliest filing date of a non-provisional patent application. The life of a patent, and the protection it affords, is therefore limited and once the patent life of our issued patents have expired, we may face competition, including from other competing technologies. The term of a patent that covers a drug or biological product may also be eligible for patent term extension when FDA approval is granted for a portion of the term effectively lost as a result of the FDA regulatory review period, subject to certain limitations and provided statutory and regulatory requirements are met. Any such patent term extension can be for no more than five years, only one patent per approved product can be extended, the extension cannot extend the total patent term beyond 14 years from approval, and only those claims covering the approved drug or biological product, a method for using it or a method for manufacturing it may be extended. We may not receive an extension if we fail to exercise due diligence during the testing phase or regulatory review process, fail to apply within applicable deadlines, fail to apply prior to expiration of relevant patents or otherwise fail to satisfy applicable requirements. Moreover, the length of the extension could be less than we request. In the future, we expect to apply for patent term extensions on certain issued patents covering our product candidates, depending upon the length of the clinical trials for each product candidate and other factors. There can be no assurance that we will benefit from any patent term extension or favorable adjustment to the term of any of our patents. As a result, our owned, co-owned and licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours. For more information, see the section entitled “Item 3 — Key Information — D. Risk Factors — Risks Related to Our Intellectual Property”. Patent License Agreement with The Trustees of Columbia University in the City of New York In September 2016, Lin BioScience, Inc., the parent company of our largest shareholder, Lin Bioscience International Ltd., entered into an agreement with Columbia University in the City of New York (“Columbia University”) (such agreement, as amended, the “Columbia License Agreement”) for an exclusive worldwide license, under specified patent rights held by Columbia University, to develop and commercialize products covered by the licensed patent rights for all fields. The Columbia License Agreement was assigned to Lin Bioscience International Ltd. and subsequently assigned to us in 2018. In October 2022, we entered into a subscription agreement with our wholly owned subsidiary, Belite Bio (HK) Limited (“Belite HK”), for assignment of our rights, title, interests and obligations under the Columbia License Agreement, in consideration for subscription of Belite HK’s ordinary shares. In November 2025, Belite HK entered into a contribution agreement with its wholly owned subsidiary Belite Bio (Swiss) AG (“Belite Swiss”), for assignment of Belite HK’s rights, title, interests and obligations under the Columbia License Agreement, as part of the consideration for the allocation to Belite Swiss’s capital contribution reserve. The foregoing assignments were aimed to optimize the tax structure of the Company and, in the event that the Company enters into any sub-licensing or collaboration in the future, to fulfill the economic substance requirements under the Cayman Islands law. This assignment does not affect our business and operations. The patent rights licensed to us under the Columbia License Agreement include issued patents with claims that recite a class of compounds directed to covering our planned lead compound, tinlarebant, and specifically recite tinlarebant. 103 Table of Contents Under the Columbia License Agreement, we paid a one-time license fee of US$2.5 million in connection with the execution thereof. We will be obligated to make minimum annual royalty payments to Columbia University of (i) US$2.5 million on each of the second, third and fourth anniversaries of the first commercial sale of a licensed product and (ii) US$5 million on each anniversary of the first commercial sale of a licensed product, commencing on the fifth anniversary of such sale. We will also be obligated to pay single-digit earned royalties to Columbia University based on net sales of each licensed product by us and our affiliates and sublicensees. The minimum royalty payments will be creditable against the earned royalties accrued during the same calendar year. The license agreement obligates us to use commercially reasonable efforts to research, discover, develop and market licensed products for commercial sale and distribution and achieve certain development and regulatory approval milestones within certain timeframes, if certain milestones are achieved. We are also obligated to periodically inform Columbia University of our progress in meeting such milestones. The failure to achieve any such milestone would constitute a breach of the Columbia License Agreement. If we pay Columbia University the required fee, we will be granted a 6-month extension. As of the Latest Practicable Date, we have complied with the development and regulatory approval milestones under the Columbia License Agreement and requested no extensions. In the event that, after completion of Phase I trials, there are unforeseen changes in clinical or regulatory development that we believe would affect the timely achievement of any milestone, we may request an extension from Columbia University for such milestone, which will not be unreasonably withheld or delayed. In the event that Columbia University does not agree to extend the deadlines to meet the milestones, and we are in breach for failure to timely meet the milestones or to make milestone or royalty payments, Columbia University may elect to convert our license to a nonexclusive license without the right to sublicense or initiate legal proceedings against third party patent infringers or terminate our license. We are also obligated to make payments to Columbia University in an aggregate amount of up to US$20 million based on achieving specified development and regulatory approval milestones and in an amount of up to US$25 million based on achieving a specified cumulative sales milestone with respect to the first licensed product. In addition, we are obligated to pay Columbia University a specified portion of revenue (other than royalties) we receive from sublicensees and a percentage of revenue in the low double-digits received from any sale of a priority review voucher by us or a sublicensee. In the event that we or a sublicensee do not sell a priority review voucher within one year of receipt, the earned royalties that we would be obligated to pay to Columbia University based on net sales of licensed products would increase by 1%. From inception through December 31, 2025, we have made payments to Columbia University of a total of US$4 million upon completion of certain clinical trial related milestones in accordance with the Columbia License Agreement, and expect to make additional payments of US$6 million in the near term when relevant development milestones are achieved. Our obligations under the Columbia License Agreement with respect to each licensed product in a particular country extends until the later of the expiration of the last-to-expire patent licensed from Columbia University covering the licensed product in such country, 20 years after the first commercial sale of the licensed product in such country or the expiration of any market exclusivity period granted by a regulatory agency. The last-to-expire patent licensed from Columbia University is anticipated to expire in 2039, absent any patent term adjustments or extensions. Columbia University has the right to terminate the agreement if we breach the agreement and fail to cure our breach within specified cure periods or in the event of specified bankruptcy, insolvency and liquidation events or if we initiate a proceeding challenging the validity or enforceability of any of the licensed patents. We have the right to terminate the agreement for our convenience at any time on 60 days’ notice to Columbia University. In the event of termination, we have granted to Columbia University a royalty free, worldwide, non-exclusive license to make, use and sell products covered by claims of patents in-licensed by us, or derived from materials or technical information thereof, pursuant to the Columbia License Agreement and in connection with which we have filed patent applications or obtained patents. Trade Secrets In addition to patents, we may rely, in some circumstances, upon unpatented trade secrets, know-how and continuing technological innovation to develop and maintain our competitive position. However, trade secrets and know-how can be difficult to protect. We seek to protect our proprietary information, in part, by executing confidentiality agreements with our scientific advisors, employees, consultants, collaborators, and other third parties, and invention assignment agreements with our consultants and employees. 104 Table of Contents Trademarks and domain names As of the Latest Practicable Date, we had one registered trademark and eight pending trademark applications in the United States, one registered trademark in the European Union, one registered trademark in the United Kingdom, three registered trademarks and four pending trademark applications in China, one registered trademark and two pending trademark applications in Hong Kong, one registered trademark in Japan, one registered trademark in Canada, one registered trademark in Switzerland, three pending trademark applications in Taiwan and one pending trademark application in Australia. As of the Latest Practicable Date, we have registered over 70 domain names, including belitebio.com, and belitebio.com.tw. Competition Our industry is highly competitive, rapidly evolving and subject to significant change. Although we believe that our core competencies in the identification, research and development of innovative therapies and our management team’s regulatory and commercialization expertise provide us with distinct competitive advantages, we face significant competition from companies of all sizes around the world, including major and specialty pharmaceutical companies, generic drug companies, academic institutions, government agencies and research institutions. Many of our competitors have significantly greater resources, including greater access to capital, technical capabilities and human resources, as well as more experience in the development and regulatory approval process than we have. Mergers and acquisitions in our industry may result in even more resources being concentrated among a smaller number of our competitors. Our commercial opportunities could be reduced or eliminated if our competitors develop or market novel therapies or other products that are more effective, safer or less costly than our current or future product candidates, or obtain regulatory approval for their products more rapidly than we may obtain approval for our product candidates. Currently, there are no FDA approved treatments for STGD1 and no FDA approved orally administered treatments for GA. The competitive landscape of treatments in STGD1 and GA includes several companies going through clinical development for their product candidates. Based on information available on clinicaltrials.gov, as of the date of this Annual Report, we understand that the tinlarebant Phase 3 STGD1 clinical study is the only completed Phase 3 clinical trial for STGD1, with one other company currently conducting an ongoing Phase 3 clinical trial for STGD1. In GA, there are five other companies advancing treatments, with three companies currently in Phase 3 development, and two companies which have completed Phase 3 development and received drug approval from the FDA for intravitreally injected therapeutic agents. Regulation We are subject to a variety of U.S., European (including both laws applicable in the European Union and the U.K.) and PRC laws, rules and regulations across a number of aspects of our business. This section sets forth a summary of the most significant laws and regulations that are applicable to our current business activities within the territory of U.S., the European Union and PRC and that affect the dividends payment to our shareholders. U.S. Regulation Government Regulation and Product Approval The U.S. Food and Drug Administration, or the FDA, and other regulatory authorities in the United States at federal, state and local levels extensively regulate, among other things, the research, development, testing, manufacture, quality control, import, export, safety, effectiveness, labeling, packaging, storage, distribution, recordkeeping, approval, advertising, promotion, marketing, post-approval monitoring and post-approval reporting of and for drug products. Along with third-party contractors, we are required to navigate the various preclinical, clinical and commercial approval requirements of the governing regulatory agencies of the countries in which we wish to conduct studies or seek approval or licensure of our product candidates. The processes for obtaining regulatory approvals in the United States and in foreign jurisdictions, along with subsequent compliance with applicable laws and regulations and other regulatory authorities, require the expenditure of substantial time and financial resources. 105 Table of Contents The failure to comply with applicable statutory and regulatory requirements may subject a sponsor, applicant or marketer to administrative or judicial enforcement actions. These actions could include the suspension or termination of clinical trials by the FDA, the FDA’s refusal to approve pending applications or supplemental applications, withdrawal of an approval, “Warning Letters” (official messages from the FDA to a manufacturer or other organization providing notice that it has violated some rule in a federally regulated activity) or “Untitled Letters” (initial correspondences from the FDA that cite violations that do not meet the threshold of regulatory significance for a Warning Letter and request correction of the violation), product recalls, product seizures, total or partial suspension of production or distribution, import detention, injunctions, fines, refusals of government contracts, restitution, disgorgement of profits, or civil or criminal investigations and penalties brought by the FDA, the Department of Justice, or the DOJ, or other governmental entities. Review and Approval for Licensing Drugs The FDA regulates drugs primarily under the Federal Food, Drug, and Cosmetic Act, or the FDCA, the Public Health Service Act, and their associated implementing regulations. Our product candidates must be approved by the FDA through the new drug application, or the NDA, process before they may be legally marketed in the United States. The process required by the FDA before a drug may be marketed in the United States generally involves the following: ● completion of extensive preclinical studies, including preclinical laboratory tests, preclinical animal studies and formulation studies all performed in compliance with applicable regulations, including the current good laboratory practice, or the cGLP, regulations; ● submission to the FDA of an investigational new drug application, or an IND, which must become effective before human clinical trials may begin and must be updated annually or when significant changes are made; ● manufacture, labeling and distribution of an investigational drug in compliance with current good manufacturing practices, or cGMP; ● approval by an institutional review board, or IRB, or ethics committee at each clinical site before each clinical trial may be initiated; ● performance of adequate and well-controlled human clinical trials in accordance with the FDA’s current good clinical practices requirements, or cGCP, clinical trial registration, and other clinical trial ● related regulations, to provide substantial evidence of effectiveness and evidence of safety for the drug product’s proposed indication; ● preparation of and submission to the FDA of an NDA after completion of all pivotal clinical trials requesting marketing approval for one or more proposed indications; ● satisfactory completion of an FDA Advisory Committee review, where appropriate or if applicable, as may be requested by the FDA to assist with its review; ● satisfactory completion of one or more FDA pre-approval inspections of the manufacturing facility or facilities at which active pharmaceutical ingredient, or API, and finished drug product, or components thereof, are produced to assess compliance with cGMP and data integrity requirements to assure that the facilities, methods, and proposed chemistry, manufacturing, and controls, or CMC, are adequate to preserve the drug’s identity, safety, quality, purity, potency and efficacy; ● satisfactory completion of FDA audits of selected preclinical and/or clinical investigation sites to assure compliance with cGLP and cGCP requirements and the integrity of the preclinical and/or clinical data; ● payment of user fees under the Prescription Drug User Fee Act, or, as amended and reauthorized, the PDUFA, for the relevant year; ● obtaining FDA review and approval of the NDA prior to any commercial marketing or sale of the drug in the United States; and 106 Table of Contents ● compliance with all post-approval requirements, including but not limited to, cGMP, CMC, post-market reporting and pharmacovigilance, registration and listing, advertising and promotional requirements, the potential requirement to implement risk evaluation and mitigations strategies, or REMS, and the potential requirement to conduct post-approval studies. In addition to drug-specific requirements, combinations of differently regulated articles, such a drug and device (e.g., a drug delivery system or companion diagnostic) could also result in various additional requirements to consider, such as device and combination product requirements of the FDCA and its implementing regulations with respect to investigation, marketing, and post-market requirements. Development of data and other information sufficient to support an NDA approval requires substantial time, effort and financial resources and we cannot be certain that any approvals for our product candidates will be granted on a timely basis, if at all. From time to time, new legislation is enacted that could significantly change the statutory provisions governing the testing, approval, manufacturing and marketing of products regulated by the FDA. In addition to new legislation, FDA regulations and policies are often revised or interpreted by the agency in ways that may significantly affect our business and our product candidates. It is impossible to predict whether further legislative changes will be enacted or whether FDA regulations, guidance, policies or interpretations will be changed or what the effect of such changes, if any, may be. Preclinical Development The data required to support an NDA is generated in two distinct development stages: preclinical and clinical. For new chemical entities, or NCEs, the preclinical development stage generally involves synthesizing the active component, developing the formulation and determining the manufacturing process, evaluating purity and stability, as well as carrying out non-human toxicology, pharmacology and drug metabolism studies in the laboratory, which support subsequent clinical testing. The conduct of the preclinical studies must comply with federal regulations, including cGLPs. The sponsor must submit the results of the preclinical studies, together with manufacturing information, analytical data, any available clinical data or literature and a proposed clinical protocol, to the FDA as part of its IND. An IND is a request for authorization from the FDA to administer an investigational product to humans. The central focus of an IND submission is on the general investigational plan and the protocol(s) for human studies. An IND acts as an exemption from the FDCA that allows an unapproved drug to be shipped in interstate commerce for use in an investigational clinical trial. Such authorization must be secured prior to interstate shipment. Any subsequent protocol amendments must be submitted to the FDA as part of the IND, and the FDA must allow these amendments to the IND to go into effect prior to their execution. Frequently, sponsors are also required to conduct additional animal studies after an IND is obtained and human clinical testing begins, and is often referred to as ‘preclinical’ or ‘nonclinical’ testing, even though it occurs in parallel with the clinical phase of development. Clinical Development Human clinical trials subject to the FDA’s jurisdiction may not begin until an IND is effective. The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA raises safety concerns or questions about the proposed clinical trial within the 30-day time period. In such a case, the IND may be placed on clinical hold and the IND sponsor and the FDA must resolve any outstanding concerns or questions before the clinical trial can begin. Submission of an IND therefore may or may not result in FDA authorization to begin a clinical trial. The FDA may also place a clinical hold or partial clinical hold on such study following commencement of a clinical trial under an IND. A clinical hold is an order issued by the FDA to the sponsor to delay a proposed clinical investigation or to suspend an ongoing investigation. A partial clinical hold is a delay or suspension of only part of the clinical work requested under the IND. For example, a specific protocol or part of a protocol is not allowed to proceed, while other protocols may do so. No more than 30 days after the imposition of a clinical hold or partial clinical hold, the FDA will provide the sponsor with a written explanation of the basis for the hold. Following issuance of a clinical hold or partial clinical hold, an investigation may only resume after the FDA has notified the sponsor that the investigation may proceed. The FDA will base that determination on information provided by the sponsor correcting the deficiencies previously cited or otherwise satisfying the FDA that the investigation can proceed. Clinical studies involve the administration of the investigational product to human subjects under the supervision of qualified investigators in accordance with cGCP regulations. Clinical studies are conducted under protocols detailing, among other things, the objectives of the study, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated. A separate submission to the existing IND must be made for each successive clinical trial conducted during product development and for any subsequent protocol amendments. 107 Table of Contents A sponsor may choose, but is not required, to conduct a foreign clinical trial under an IND. When a foreign clinical trial is conducted under an IND, all FDA IND requirements must be met unless waived. When the foreign clinical trial is not conducted under an IND, the sponsor must ensure that the study complies with cGCP regulations in order to use the study as support for an IND or application for marketing approval, including review and approval by an independent ethics committee and informed consent from subjects. Furthermore, an IRB for each site proposing to conduct the clinical trial must review and approve the plan for any clinical trial before the clinical trial begins at that site, and must monitor the study until completed. Some studies also include oversight by an independent group of qualified experts organized by the clinical trial sponsor, known as a data safety monitoring board, or the DSMB. DSMBs provide authorization for whether or not a study may move forward at designated check points based on access to certain data from the study and may halt the clinical trial if a DSMB determines that there is an unacceptable safety risk for subjects or based on other grounds, such as no demonstration of efficacy. Other grounds for suspension or termination may be made based on evolving business objectives and/or competitive climate. There are also requirements governing the reporting of ongoing clinical trials and clinical trial results to public registries. In addition, if conducting a clinical study in a non-U.S. population, acceptance of clinical trial results by the FDA will depend, among other things, on whether the non-U.S. population that enrolled in the study is sufficiently similar to the indicated U.S. population that the results of the trial would fairly represent expected results in the U.S. population. The same issue can also arise in multi-national trials where non-U.S. sites are enrolling subjects that will become part of the data submitted to the FDA. Further, sections 505(z)(3) and 520(g)(9)(A) of the Food, Drug, and Cosmetic Act require sponsors to submit Diversity Action Plans, or DAP, for certain clinical studies. Diversity Action Plans are intended to increase enrollment of participants who are members of historically underrepresented populations in clinical studies to help improve the strength and generalizability of the evidence for the intended use population. Such plans must specify “the sponsor’s goals for enrollment in a clinical study,” “the sponsor’s rationale for such goals”, and include “an explanation of how the sponsor intends to meet those goals.” Waiver may be requested and granted by FDA in certain circumstances as well. FDA released updated draft guidance on compliance with Diversity Action Plan requirements in June 2024. The guidance was removed from FDA’s website in January 2025 pursuant to an Executive Order of the Trump Administration concerning diversity, equity, and inclusion. That action, along with similar actions by the Trump Administration to remove many other healthcare webpages, is currently the subject of ongoing litigation. On July 3, 2025, the U.S. District Court for the District of Columbia ruled that the Trump Administration’s actions to remove these webpages, including the draft DAP guidance, are unlawful under the Administrative Procedure Act. The court ordered the restoration of many of these webpages. In late July 2025, the FDA restored the draft DAP guidance to its website with a statement that “information on this page may be modified and/or removed in the future subject to the terms of the court’s order and implemented consistent with applicable law.” Accordingly, in light of these ongoing actions, there is considerable uncertainty surrounding the draft DAP guidance and how the FDA will consider DAPs in connection with its review of NDAs and BLAs. For purposes of drug approval, clinical trials are typically conducted in the following sequential phases that may overlap or be combined: ● Phase 1: The investigational product is initially introduced into a small number of healthy human subjects or patients with the target disease or condition. These studies are designed to test the safety, dosage tolerance, absorption, metabolism and distribution of the investigational product in humans and the side effects associated with increasing doses. These studies may also yield early evidence of effectiveness. ● Phase 2: The investigational product is administered to a limited patient population with a specified disease or condition to evaluate the preliminary efficacy, optimal dosages and dosing schedule and to identify possible adverse side effects and safety risks. ● Phase 3: The investigational product is administered to an expanded patient population generally at multiple geographically dispersed clinical trial sites to further evaluate dosage, to provide statistically significant evidence of clinical efficacy and to further test for safety. These clinical trials are intended to generate sufficient data to statistically evaluate the efficacy and safety of the product for approval, to establish the overall risk/benefit ratio of the investigational product and to provide an adequate basis for product approval by the FDA and labeling of the drug product. 108 Table of Contents In some cases, the FDA may require, or companies may voluntarily pursue, additional clinical trials after a product is approved to gain more information about the product, sometimes referred to as “Phase 4” studies. Such post-approval studies, when applicable, are conducted following initial approval, typically to develop additional data and information relating to the biological characteristics of the product and the treatment of patients in the intended therapeutic indication. Progress reports detailing the results of the clinical trials must be submitted at least annually to the FDA and more frequently if serious adverse events occur. In addition, IND safety reports must be submitted to the FDA for any of the following: suspected serious and unexpected adverse reactions; findings from epidemiological studies, pooled analysis of multiple studies, animal or in vitro testing, or other clinical trials, whether or not conducted under an IND, and whether or not conducted by the sponsor, that suggest a significant risk in humans exposed to the drug; and any clinically important increase in the rate of a serious suspected adverse reaction over such rate listed in the protocol or investigator brochure, which is a comprehensive document summarizing the body of information about an investigational product obtained during clinical and non-clinical trials. Each of Phase 1, Phase 2 and Phase 3 clinical trials may not be completed successfully within any specified period, or at all. Furthermore, the FDA or the sponsor may suspend or terminate a clinical trial at any time on various grounds, including a finding that the research patients are being exposed to an unacceptable health risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution, or an institution it represents, if the clinical trial is not being conducted in accordance with such IRB’s requirements or if the drug has been associated with unexpected serious harm to patients. Additionally, if a clinical trial is overseen by a Data Safety Monitoring Board, or DSMB, the DSMB will provide authorization for whether or not a study may move forward at designated check points based on access to certain data from the study. During clinical development, the sponsor often refines the indication and endpoints on which the drug will be based. For endpoints based on patient-reported outcomes, or PRO, and observer-reported outcomes, or ORO, the process typically is an iterative one. The FDA has issued guidance on the framework it uses to evaluate PRO instruments. Although the agency may offer advice on optimizing PRO and ORO instruments during the clinical development process, the FDA usually reserves final judgment until it reviews the drug. Concurrent with clinical trials, companies must develop additional information about the chemistry and physical characteristics of the drug and finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements. The manufacturing process must be capable of consistently producing quality batches of the product candidate, and cGMPs impose, among other things, extensive procedural, substantive and recordkeeping requirements to ensure and preserve the long-term stability and quality of the final drug product. Additionally, appropriate packaging must be selected and tested and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life. Any changes to the drug product during development, and especially after Phase 2, can raise questions with respect to impact of changes on study results, and whether results may be extrapolated to support approval of a final finished dosage form for which approval is sought. During the clinical development process, earlier phase drug results may be promising, but it cannot be assumed that subsequent phases of development will be successful. In fact, it is often the case that drugs with promising early phase data fail to ultimately show sufficient efficacy or safety to support approval in later phases of development. NDA Submission and Review Following study completion, study results and data are analyzed to assess safety and efficacy. The results of preclinical studies and clinical trials are then submitted to the FDA as part of an NDA, along with proposed labeling for the drug, information about the manufacturing process and facilities that will be used to ensure drug quality, results of analytical testing conducted on the chemistry of the drug and other relevant information. The NDA is a request for approval to market the drug and must contain adequate evidence of safety and efficacy, which is demonstrated by extensive preclinical and clinical testing. Data may come from company-sponsored clinical trials intended to test the safety and efficacy of a use of a drug, or from a number of alternative sources, including studies initiated by investigators. To support marketing approval, the data submitted must be sufficient in quality and quantity to establish the safety and efficacy of the investigational drug product to the satisfaction of the FDA. In addition, under the Pediatric Research Equity Act of 2003, as amended and reauthorized, certain NDAs or supplements thereto must contain data that is adequate to assess the safety and efficacy of the drug for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the drug is safe and effective. The FDA may, on its own initiative or at the request of the applicant, grant deferrals for submission of some or all pediatric data until after approval of the product for use in adults, or full or partial waivers from the pediatric data requirements. 109 Table of Contents Under the PDUFA, each NDA must generally be accompanied by a significant application user fee. The FDA adjusts the PDUFA user fees on an annual basis. Fee waivers or reductions are available in certain circumstances, including a waiver of the application fee for the first application filed by a small business which has fewer than 500 employees; in assessing whether an application qualifies as a ‘first application’ and calculating the number of employees, affiliates of the small business making the NDA submission are considered. Additionally, no user fees are assessed on NDAs for products designated as orphan drugs, unless the product also includes a non-orphan indication. The FDA reviews all NDAs submitted before it accepts them for filing and may request additional information rather than accepting an NDA for filing. The FDA conducts a preliminary review of an NDA within 60 days of receipt and informs the sponsor by the 74th day after the FDA’s receipt of the submission to determine whether the application is sufficiently complete to permit substantive review. Once the submission is accepted for filing, the FDA begins an in-depth review of the NDA. Under the goals and policies agreed to by the FDA under PDUFA, the FDA has ten months from the filing date in which to complete its initial review of a standard NDA and respond to the applicant, and six months from the filing date for a “priority review” NDA. The FDA does not always meet its PDUFA goal dates for standard and priority review NDAs, and the review process is often significantly extended by FDA requests for additional information or clarification. After the NDA submission is accepted for filing, the FDA reviews the NDA to determine, among other things, whether the proposed drug is safe and effective for its intended use, and whether the drug is being manufactured in accordance with cGMP to assure and preserve the drug’s identity, strength, quality, purity and efficacy. The FDA may refer applications for novel drugs or product candidates that present difficult questions of safety or efficacy to an advisory committee. Typically, an advisory committee consists of a panel that includes clinicians and other experts who will review, evaluate and provide a recommendation as to whether the application should be approved and, if so, under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions and usually follows such recommendations. The FDA may re-analyze the clinical trial data, which could result in extensive discussions between the FDA and us during the review process. Before approving an NDA, the FDA will generally conduct a pre-approval inspection of the manufacturing facilities for the new drug to determine whether they comply with cGMPs. The FDA will not approve the drug unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the drug within required specifications. In addition, before approving an NDA, the FDA may also audit data from clinical trials to ensure compliance with cGCP requirements. After the FDA evaluates the application, manufacturing process and manufacturing facilities where the drug product and/or its API will be produced, it may issue an approval letter or a complete response letter. An approval letter authorizes commercial marketing of the drug with specific prescribing information for specific indications. A complete response letter indicates that the review cycle of the application is complete and the application is not ready for approval. A complete response letter usually describes all of the specific deficiencies in the NDA identified by the FDA. The complete response letter may require additional clinical data and/or an additional pivotal clinical trial(s), and/or other significant, expensive and time-consuming requirements related to preclinical studies or clinical trials or manufacturing. If a complete response letter is issued, the applicant may either resubmit the NDA, addressing all of the deficiencies identified in the letter, or withdraw the application. Even if such data and information is submitted, the FDA may ultimately decide that the NDA does not satisfy the criteria for approval. Data obtained from clinical trials are not always conclusive and the FDA may interpret data differently than we interpret the same data. If a drug receives marketing approval, the approval may be limited to specific diseases and dosages or the indications for use may otherwise be limited. Further, the FDA may require that certain contraindications, warnings or precautions be included in the drug labeling or may condition the approval of the NDA on other changes to the proposed labeling, development of adequate controls and specifications, or a commitment to conduct post-market testing or clinical trials and surveillance to monitor the effects of approved drugs. For example, the FDA may require Phase 4 testing which involves clinical trials designed to further assess a drug’s safety and effectiveness and may require testing and surveillance programs to monitor the safety of approved drugs that have been commercialized. The FDA may also place other conditions on approvals including the requirement for a REMS to ensure that the benefits of a drug or biological product outweigh its risks. If the FDA concludes a REMS is needed, the sponsor of the NDA must submit a proposed REMS and the FDA will not approve the NDA without a REMS that the agency has determined is acceptable. A REMS could include medication guides, physician communication plans or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools. Any of these limitations on approval or marketing could restrict the commercial promotion, distribution, prescription or dispensing of a drug. Drug approvals may be withdrawn for non-compliance with regulatory standards or if problems occur following initial marketing. 110 Table of Contents Section 505(b)(2) NDAs NDAs for most new drug products are based on two or more adequate and well-controlled clinical trials, which must provide substantial evidence of effectiveness for, and demonstrate safety of, the proposed new product for a given indication (though, in certain cases, an NDA might be based on a single adequate and well-controlled clinical trial plus confirmatory evidence). These applications are submitted under Section 505(b)(1) of the FDCA. The FDA is, however, authorized to approve an alternative type of NDA under Section 505(b)(2) of the FDCA. This type of application allows the applicant to rely, in part, on the FDA’s previous findings of safety and efficacy for a similar product, or published literature. Specifically, Section 505(b)(2) applies to NDAs for a drug for which the investigations made to show whether or not the drug is safe for use and effective in use and relied upon by the applicant for approval of the application “were not conducted by or for the applicant and for which the applicant has not obtained a right of reference or use from the person by or for whom the investigations were conducted.” Section 505(b)(2) authorizes the FDA to approve an NDA based in part on prior FDA determinations as opposed to solely on safety and effectiveness data developed by the applicant. NDAs filed under Section 505(b)(2) may provide an alternate and potentially more expeditious pathway to FDA approval for new or improved formulations or new uses of previously approved products. If the 505(b)(2) applicant can establish that reliance on the FDA’s previous approval is scientifically appropriate, the applicant may eliminate the need to conduct certain preclinical studies or clinical trials of the new product. However, the FDA may require applicants to perform additional studies or measurements to support the change(s) from the previously approved product. The FDA may then approve the new product candidate for all or some of the label indications for which the referenced product has been approved, as well as for any new indication sought by the Section 505(b)(2) applicant. Pediatric Studies With the enactment of the Food and Drug Administration Safety and Innovation Act in 2012, a sponsor who is planning to submit a marketing application (or supplement to an application) for a drug that includes a new active ingredient, new indication, new dosage form, new dosing regimen or new route of administration must also submit an initial Pediatric Study Plan, or a PSP, within sixty days of an end-of-Phase 2 meeting or as may be agreed between the sponsor and the FDA, unless the drug is for an indication for which orphan designation has been granted. In the absence of an end-of-phase 2 meeting, the sponsor should submit the initial PSP as early as practicable but before the initiation of any phase 3 studies, or any combined phase 2 and phase 3 studies, of the drug that is the subject of the initial PSP. The initial PSP must include an outline of the pediatric study or studies that the sponsor plans to conduct, including study objectives and design, age groups, relevant endpoints and statistical approach, or a justification for not including such detailed information, and any request for a deferral of pediatric assessments or a full or partial waiver of the requirement to provide data from pediatric studies along with supporting information. The FDA and the sponsor must reach agreement on the PSP. A sponsor can submit amendments to an agreed-upon initial PSP at any time if changes to the pediatric plan need to be considered based on data collected from preclinical studies, early phase clinical trials and/or other clinical development programs. Orphan Drug Designation and Exclusivity Under the Orphan Drug Act, the FDA may designate a drug product as an “orphan drug” if it is intended to treat a rare disease or condition (generally meaning that it affects fewer than 200,000 individuals in the United States, or more in cases in which there is no reasonable expectation that the cost of developing and making a drug product available in the United States for treatment of the disease or condition will be recovered from sales of the product). A company must request orphan product designation before submitting an NDA. If the request is granted, the FDA will publicly disclose the identity of the therapeutic agent and its potential use. Orphan product designation does not convey any advantage in or shorten the duration of the regulatory review and approval process, but the product will be entitled to orphan product exclusivity, which runs for seven years from the date of approval. However, if a drug or drug product designated as an orphan product ultimately receives marketing approval for an indication broader than what was designated in its orphan product application, it may not be entitled to exclusivity. 111 Table of Contents During the orphan product exclusivity period, per FDA regulations, competitors may not receive approval for the same drug for the same indication, except in limited circumstances. In particular, 21 CFR 316.31(b) states that orphan drug exclusivity “protects only the approved indication or use of a designated drug.” However, in a court decision, Catalyst Pharms., Inc. v. Becerra (Catalyst), 14 F.4th 1299 (11th Cir. 2021), concerning certain drug products for Lambert-Eaton myasthenic syndrome (LEMS), the U.S. Court of Appeals for the Eleventh Circuit concluded that the Orphan Drug Act, 21 U.S.C. 360cc(a), unambiguously foreclosed FDA’s interpretation, and that per statute orphan exclusivity would prevent approval of the same drug for the “same disease or condition,” not the “same indication.” Given that the indication for a drug product might only encompass a subset of a “disease or condition” (e.g., only certain age groups), the Catalyst decision suggested that orphan exclusivity is broader than FDA’s interpretation in regulation. On January 24, 2023, FDA announced in a notice published at 88 Federal Register 4086 that although it followed the order of the Catalyst court requiring approval of a specific drug subject to that case to be set aside (due to the Catalyst court’s interpretation of orphan drug exclusivity), FDA would “continue to apply its regulations tying the scope of orphan drug exclusivity to the uses or indications for which a drug is approved to matters beyond the scope of that order.” The apparent difference of opinion reflected by the Catalyst court and FDA’s notice creates some uncertainty regarding the scope of orphan product exclusivity. Currently, under FDA regulations, circumstances under which FDA would approve a competitor’s product during the seven-year orphan product exclusivity period include instances in which another sponsor’s application for the same drug product and indication is shown to be “clinically superior” to the previously approved drug. In this context, clinically superior means that the drug provides a significant therapeutic advantage over and above the already approved drug in terms of greater efficacy, greater safety or by providing a major contribution to patient care. Additional benefits of an orphan drug designation include a tax credit of 25% of the qualified clinical testing expenses for the relevant taxable year, and a waiver of the Prescription Drug User Fee Act, or PDUFA, application fee (which is approximately US$4.68 million for fiscal year 2026 if the application requires clinical data) unless the application also includes a non-orphan indication. Rare Pediatric Disease Designation and Priority Review Vouchers Under the FDCA, the FDA incentivizes the development of drugs that meet the definition of a “rare pediatric disease,” defined to mean a serious or life-threatening disease in which the serious or life-threatening manifestations primarily affect individuals aged from birth to 18 years and the disease affects fewer than 200,000 individuals in the United States or affects more than 200,000 in the United States and for which there is no reasonable expectation that the cost of developing and making in the United States a drug for such disease or condition will be received from sales in the United States of such drug. The sponsor of a product candidate for a rare pediatric disease may be eligible for a voucher that can be used to obtain a priority review for a subsequent human drug application after the date of approval of the rare pediatric disease drug product, referred to as a priority review voucher, or PRV. A sponsor may request rare pediatric disease designation from the FDA prior to the submission of its NDA. A rare pediatric disease designation does not guarantee that a sponsor will receive a PRV upon approval of its NDA. Moreover, a sponsor who chooses not to submit a rare pediatric disease designation request may nonetheless receive a PRV upon approval of their marketing application if they request such a voucher in their original marketing application and meet all of the eligibility criteria. If a PRV is received, it may be sold or transferred an unlimited number of times. Also, the FDA may revoke any rare pediatric disease priority review voucher if the rare pediatric disease product for which the voucher was awarded is not marketed in the United States within the 365-day period beginning on the date of the approval. Congress has extended the PRV program through September 30, 2029, with the potential for PRVs to be granted after September 30, 2029. Reauthorization of PRV programs is not guaranteed, as evidenced by Congress’s recent decision to let a different PRV program (for medical countermeasures) lapse on September 30, 2023. 112 Table of Contents Post-Approval Requirements Any products manufactured or distributed pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to monitoring, recordkeeping, registration and listing, periodic reporting, reporting of certain deviations and adverse experiences, providing the regulatory authorities with updated safety and efficacy information, drug sampling and distribution requirements, and complying with applicable promotion and advertising requirements. After approval, most changes to the approved product, such as adding new indications or other labeling claims, are subject to FDA review and approval. There also are continuing user fee requirements, under which the FDA assesses an annual program fee for each product identified in an approved NDA. FDA regulations also require that approved products be manufactured in specific approved facilities and in accordance with cGMP. We currently use contract manufacturing organizations, or CMOs, to manufacture the drugs used in our clinical trials and expect to rely on third parties for the production of commercial quantities of our products in accordance with cGMP regulations. NDA holders using CMOs, laboratories or packagers are responsible for the selection and monitoring of qualified firms, and, in certain circumstances, qualified suppliers to these firms. These manufacturers must comply with cGMP regulations that require, among other things, quality control and quality assurance as well as the corresponding maintenance of records and documentation and the obligation to investigate and correct any deviations from cGMP. Drug manufacturers and their third-party contractors are required to register their establishments with the FDA and certain state agencies. These establishments are subject to routine and periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMP and data integrity requirements, which impose certain procedural and documentation requirements to assure quality of manufacturing and product. Any interference with FDA inspection activities at our company or at CMOs can result in substantial penalties. The FDA has increasingly observed cGMP violations involving data integrity during site inspections and investigating compliance with data integrity requirements is a significant focus of its oversight. Requirements with respect to data integrity include, among other things, controls to ensure data are complete and secure; requiring that activities are documented at the time of performance; audit trail functionality; requiring authorized access and limitations; validated computer systems; and the review of records for accuracy, completeness and compliance with established standards. Post-approval changes to the manufacturing process, including changes of the site of manufacture, are strictly regulated, and, depending on the significance of the change, may require FDA approval before being implemented. FDA regulations also require investigation and correction of any deviations from cGMP and impose reporting requirements upon us and any third-party CMOs that we may decide to use. Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain compliance with cGMP, data integrity, pharmacovigilance (i.e., post-marketing safety reporting obligations) and other aspects of regulatory compliance. The FDA may withdraw a product approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market. Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information; imposition of post-approval studies or clinical trials to assess new safety risks; or imposition of distribution or other restrictions under a REMS. Other potential consequences include: ● restrictions on the marketing or manufacturing of a product, complete withdrawal of the product from the market or product recalls; ● fines, Warning Letters, Untitled Letters or holds on post-approval clinical trials; ● refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of existing product approvals; ● product seizure or detention, or refusal of the FDA to permit the import or export of products that it believes present safety problems by issuing an Import Alert; ● permanent injunctions and consent decrees, including the imposition of civil or criminal penalties; ● adverse publicity; 113 Table of Contents ● voluntary or mandatory product recall; and ● recoupment of payment and damages for noncompliant drug products based on various legal theories, including a theory that reimbursement for noncompliant products violates federal and state false claims laws (e.g., the federal False Claims Act). The FDA strictly regulates the marketing, labeling, advertising and promotion of prescription drug products placed on the market. A company can make only those claims relating to safety and efficacy, identity, strength, quality, purity and potency that are approved by the FDA and in accordance with the provisions of the approved label. Promotional claims relating to a product’s safety or effectiveness are prohibited before the drug is approved. After approval, a product generally may not be promoted for uses that are not approved by the FDA, as reflected in the product’s prescribing information. In the United States, healthcare professionals are generally permitted to prescribe drugs for such uses not described in the drug’s labeling, known as off-label uses, because the FDA does not regulate the practice of medicine. However, FDA regulations impose rigorous restrictions on manufacturers’ communications, prohibiting the promotion of off-label uses. It may be permissible, under very specific, narrow conditions, for a manufacturer to engage in non-promotional, non-misleading communication regarding off-label information, such as distributing scientific or medical journal information in accordance with the FDA’s good reprint practices or unsolicited request doctrine. If a company is found to have promoted off-label uses, it may become subject to adverse public relations and administrative and judicial enforcement by the FDA, the DOJ or the Office of the Inspector General of the Department of Health and Human Services, as well as other federal and state authorities. This could subject a company to a range of penalties that could have a significant commercial impact, including civil and criminal fines and agreements that materially restrict the manner in which a company promotes or distributes products. The federal government has levied large civil and criminal fines against companies for alleged improper promotion, and has also requested that such companies enter into consent decrees and permanent injunctions under which specified promotional conduct is changed or curtailed. Among other legal theories, penalties may be sought based on a theory that off-label promotion causes submission of claims that for an unapproved use in violation of state and federal false claims laws. Other Regulatory Matters Manufacturing, sales, promotion and other activities following drug approval are also subject to regulation by numerous regulatory authorities in addition to the FDA, including, in the United States, the Centers for Medicare & Medicaid Services, other divisions of the Department of Health and Human Services, the Drug Enforcement Administration for controlled substances, the Consumer Product Safety Commission, the Federal Trade Commission, the Occupational Safety & Health Administration, the Environmental Protection Agency and state and local governments. The activities of pharmaceutical manufacturers are subject to federal and state laws designed to prevent “fraud and abuse” in the healthcare industry. The laws generally limit financial interactions between manufacturers and health care providers or other participants in the healthcare industry, require disclosure to the government and public of such interactions, and govern various matters regarding reimbursement of healthcare products. Many of these laws and regulations contain ambiguous requirements or require administrative guidance for implementation. Pharmaceutical manufacturers are also required to provide discounts or rebates under government healthcare programs or to certain government and private purchasers in order to obtain coverage under federal healthcare programs such as Medicaid. Participation in such programs may require tracking and reporting of certain drug prices. Manufacturers are subject to fines and other penalties if such prices are not reported accurately. Additionally, the handling of any controlled substances must comply with the U.S. Controlled Substances Act and Controlled Substances Import and Export Act. Drugs must meet applicable child-resistant packaging requirements under the U.S. Poison Prevention Packaging Act. Manufacturing, sales, promotion and other activities are also potentially subject to federal and state consumer protection and unfair competition laws. The distribution of prescription drugs and biologics are subject to the Drug Supply Chain Security Act, which requires manufacturers and other stakeholders to comply with product identification, tracing, verification, detection and response, notification and licensing requirements. In addition, the Prescription Drug Marketing Act and its implementing regulations and state laws limit the distribution of prescription pharmaceutical product samples, and the Drug Supply Chain Security Act imposes requirements to ensure accountability in distribution and to identify and remove prescription drug and biological products that may be counterfeit, stolen, contaminated, or otherwise harmful from the market. 114 Table of Contents Hatch-Waxman Protections and Pediatric Exclusivity Patent Term Restoration After approval, owners of relevant drug or biological product patents may apply for up to a five-year patent extension to restore a portion of patent term lost during product development and FDA review of an NDA if approval of the application is the first permitted commercial marketing or use of a drug containing the API under the Hatch-Waxman Act. The allowable patent term extension is calculated as one-half of the product’s testing phase, which is the time between IND and NDA submission, and all of the review phase, which is the time between NDA submission and approval, up to a maximum of five years. The time can be shortened if the FDA determines that the applicant did not pursue approval with due diligence. The total patent term after the extension may not exceed more than 14 years from the date of FDA approval of the product. Only one patent claiming each approved product is eligible for restoration and the patent holder must apply for restoration within 60 days of approval. The USPTO, in consultation with the FDA, reviews and approves the application for patent term restoration. For patents that might expire during the application phase, the patent owner may request an interim patent extension. An interim patent extension increases the patent term by one year and may be renewed up to four times. For each interim patent extension granted, the post-approval patent extension is reduced by one year. The director of the USPTO must determine that approval of the product candidate covered by the patent for which a patent extension is being sought is likely. Interim patent extensions are not available for a product candidate for which an NDA has not been submitted. Patent Listing and the Orange Book In seeking approval for a drug through an NDA, applicants are required to list with the FDA each drug substance, drug product, and method-of-use patent whose claims cover the NDA drug product. Upon approval of the NDA, each of the patents listed in the application for the drug is published in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations, commonly known as the Orange Book. Drugs listed in the Orange Book can, in turn, be cited by potential competitors as reference listed drugs, or RLD, in support of approval of an abbreviated new drug application, or ANDA, or 505(b)(2) NDA which relies upon the RLD’s approval to support its own. In some cases, the basis for listing patents may be challenged by third parties, such as recent actions by the Federal Trade Commission (“FTC”) challenging the accuracy or relevance of certain listed patents to address what FTC considers to be anticompetitive Orange Book listing practices. An ANDA provides for marketing of a drug product that has the same active ingredients in the same strengths and dosage form as the listed drug and has been shown through bioequivalence testing to be therapeutically equivalent to the listed drug. Other than the requirement for bioequivalence testing, ANDA applicants are not required to conduct, or submit results of, nonclinical or clinical tests (beyond, potentially, bioequivalence studies) to prove the safety or effectiveness of their drug product. Drugs approved in this way are commonly referred to as “generic equivalents” to the listed drug, and can often be substituted by pharmacists under prescriptions written for the original listed drug under various state laws. A 505(b)(2) NDA is generally used where there are one more difference from the RLD in terms of dosage form, labeling, or other properties, but where an applicant may nonetheless rely upon FDA’s prior approval determinations with respect to the RLD to support safety and/or efficacy of the 505(b)(2) NDA drug product. An ANDA or 505(b)(2) NDA applicant is required to certify to the FDA concerning any patents listed for the RLD in the FDA’s Orange Book. Specifically, the applicant must certify that: (i) the required patent information has not been filed; (ii) the listed patent has expired; (iii) the listed patent has not expired, but will expire on a particular date and approval is sought after patent expiration; or (iv) the listed patent is invalid or will not be infringed by the new product. An ANDA applicant may also elect to submit a section viii statement, certifying that its proposed ANDA label does not contain or carve out any language regarding the patented method-of-use, rather than certify to a listed method-of-use patent. 115 Table of Contents If the applicant does not challenge the listed patents, the ANDA or 505(b)(2) NDA will not be approved until all the listed patents claiming the referenced product have expired. A certification that the new product will not infringe the already approved product’s listed patents, or that such patents are invalid, is called a Paragraph IV certification. If the ANDA or 505(b)(2) NDA applicant has provided a Paragraph IV certification to the FDA, the applicant must also send notice of the Paragraph IV certification to the NDA and patent holders once the ANDA or 505(b)(2) NDA has been accepted for filing by the FDA. The NDA and patent holders may then initiate a patent infringement lawsuit in response to the notice of the Paragraph IV certification. The filing of a patent infringement lawsuit within 45 days of the receipt of a Paragraph IV certification automatically prevents the FDA from approving the ANDA or 505(b)(2) NDA until the earlier of (i) 30 months (or, if the RLD is an NCE, and the patent infringement lawsuit is brought during the fifth year of NCE exclusivity, 7 ½ years from the date of the RLD’s approval), or such shorter or longer period as the court may order because either party to the action failed to reasonably cooperate in expediting the lawsuit; (ii) expiration of the patent; (iii) settlement of the lawsuit; or (iv) a decision in the infringement case that is favorable to the ANDA or 505(b)(2) NDA applicant. The ANDA or 505(b)(2) NDA also will not be approved until any applicable non-patent market exclusivity listed in the Orange Book for the referenced product have expired. Market Exclusivity Upon NDA approval of a NCE, which is a drug that contains no active moiety that has been approved by the FDA in any other NDA, that drug receives five years of marketing exclusivity during which time the FDA cannot receive any ANDA or 505(b)(2) NDA seeking approval that uses the NDA as its RLD. Certain changes to a drug, such as the addition of a new indication to the package insert, are associated with a three-year period of exclusivity during which the FDA cannot approval an ANDA or 505(b)(2) NDA seeking approval that uses the NDA as its RLD. An ANDA or 505(b)(2) NDA may be submitted one year before NCE exclusivity expires if a Paragraph IV certification is filed. If there is no listed patent in the Orange Book, there may not be a Paragraph IV certification, and, thus, no ANDA or 505(b)(2) may be filed before the expiration of the exclusivity period. Pediatric Exclusivity Another provision of the FDCA provides a potential opportunity for “pediatric exclusivity,” which, if granted, adds six months to existing exclusivity periods and patent terms. This six-month exclusivity, which runs from the end of other exclusivity protection or patent term, may be granted based on the voluntary completion of a pediatric study in accordance with an FDA-issued “Written Request” for such a study. In some instances, the same studies can satisfy both PREA and pediatric exclusivity requirements, and in other instances may request studies of new indications or other differences from initial NDA approval that is being sought or has been granted. FDA Expedited Programs and Special Protocol Assessments The FDA expedited programs and designations for serious conditions, like Fast Track, Breakthrough Therapy, Priority Review and Accelerated Approval, are intended to make certain drugs available as rapidly as possible. Applicants must request Fast Track designation from the FDA, which provides access to a process to facilitate the development and expedite the review of a drug intended to treat serious conditions and fill an unmet need. The request can be initiated at any time during the drug development process. The FDA will review the request and make a decision within 60 days based on whether the drug fulfills an unmet medical need in a serious condition. A drug that receives Fast Track designation is eligible for some or all of the following: (i) more frequent meetings with FDA to discuss the drug’s development plan and ensure collection of appropriate data needed to support drug approval; (ii) more frequent written correspondence from the FDA about things such as the design of the proposed clinical trial and the use of biomarkers; (iii) Accelerated Approval and Priority Review, if relevant criteria are met; and (iv) rolling review, under which the agency may initiate review of sections of a Fast Track product’s NDA before the application is complete. Rolling review is available if the applicant provides, and the FDA approves, a schedule for the submission of the remaining information and the applicant pays applicable user fees. However, the FDA’s PDUFA review period for a Fast Track application does not begin until the last section of the NDA is submitted. 116 Table of Contents Under the Breakthrough Therapy authority, a drug may be eligible for designation as a Breakthrough Therapy if the drug is intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening condition and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints. The designation includes all of the fast track program features, as well as more intensive FDA interaction and guidance beginning as early as Phase 1 and an organizational commitment to expedite the development and review of the product candidate, including involvement of senior managers. Every drug application submitted to the FDA is subject to consideration for Priority Review designation, even if the applicant does not request it. The FDA informs the applicant of a Priority Review designation within 60 days of the receipt of the original NDA. Designation of a drug as “Priority” does not alter the scientific/medical standard for approval or the quality of evidence necessary for approval. Priority Review does shorten the planned time period for review of an NDA (from six months compared with the ten-month standard review) by the FDA. Under its Accelerated Approval authority, the FDA may approve a product for a serious disease or condition that fills an unmet need, including a Fast Track product, if it is found to have an effect on a surrogate endpoint in a marker that is thought to predict a clinical benefit. The FDA may also approve a product under Accelerated Approval authority if it is found to have an effect on an intermediate endpoint in a measure of therapeutic effect that is considered reasonably likely to predict a clinical benefit. The endpoint evidence to support Accelerated Approval may be epidemiological, pathophysiological, therapeutic, and pharmacologic or based on the use of biomarkers. Accelerated Approval can be withdrawn or the labeled indication of the drug changed if studies fail to verify clinical benefit or do not demonstrate sufficient clinical benefit to justify the risk associated with the drug. Fast Track, Breakthrough Therapy and Priority Review status, as well as Accelerated Approval, may all be withdrawn by the FDA at any time if the agency finds that relevant criteria are no longer being met. The Federal Food, Drug, and Cosmetic Act directs the FDA to meet with sponsors, pursuant to a sponsor’s written request, for the purpose of reaching agreement on the design and size of clinical trials intended to form the primary basis of an efficacy claim in an NDA. If an agreement is reached, the FDA will reduce the agreement to writing and make it part of the administrative record. This agreement is called a special protocol assessment, or an SPA. While the FDA’s guidance on SPAs states that documented SPAs should be considered binding on the review division, the FDA has latitude to change its assessment if certain exceptions apply. Exceptions include public health concerns emerging that were unrecognized at the time of the protocol assessment, identification of a substantial scientific issue essential to the safety or efficacy testing that later comes to light, a sponsor’s failure to follow the protocol agreed upon, or the FDA’s reliance on data, assumptions or information that are determined to be wrong. An SPA request can be requested after a pre-Phase 3 meeting with the FDA. It allows the FDA and sponsor to agree on the study design for a Phase 3 study whose efficacy results will be the basis of an NDA. There is no guarantee that we will request or be able to receive and maintain Fast Track designation, Breakthrough Therapy designation, Priority Review designation, Accelerated Approval or a Special Protocol Assessment for any of our product candidates. Disclosure of Clinical Trial Information Sponsors of clinical trials of certain FDA-regulated products, including prescription drugs, are required to register and disclose certain clinical trial information on a public website maintained by the U.S. National Institutes of Health. Information related to the product, patient population, phase of investigation, clinical trial sites and investigator, and other aspects of the clinical trial is made public as part of the registration. Sponsors are also obligated to disclose the results of these clinical trials after completion if the product candidate is ultimately approved, and disclosure of the results of these clinical trials will be delayed until such approval. Competitors may use this publicly-available information to gain knowledge regarding the design and progress of ongoing development programs. 117 Table of Contents Effect of the New Administration on FDA The Secretary of the U.S. Department of Health and Human Services (“HHS”), Robert F. Kennedy Jr., has expressed several ideas that could indicate further reforms to healthcare, including to regulation of pharmaceuticals by the FDA (an agency subordinate to HHS). For example, Secretary Kennedy has expressed concerns regarding the FDA review process for certain products, and has indicated plans to revisit the use of PDUFA industry fees to fund FDA operations. These industry fees are currently essential to FDA employing sufficient drug review staff to help ensure predictable timelines for FDA’s review process. Secretary Kennedy’s exercise of authority over FDA, by virtue of his role as HHS head, could have a substantial impact on FDA operations and policy. Further, the Department of Government Efficiency (“DOGE”) has pursued layoffs and termination of some FDA staff with the potential for more in the future as it looks for ways to reduce the federal workforce. These and other circumstances may portend a higher likelihood of disruptions in the FDA review process and other aspects of FDA oversight which could adversely affect the development and commercialization of drug products, including those being pursued by the Company. U.S. Healthcare Regulation Pharmaceutical Coverage and Reimbursement Significant uncertainty exists as to the coverage and reimbursement status of any products for which we may obtain regulatory approval. In the United States, sales of any products for which we may receive regulatory approval for commercial sale will depend in part on the availability of coverage and reimbursement from third-party payors. Third-party payors include government authorities, managed care providers, private health insurers and other organizations. Third-party payors establish the coverage and reimbursement policies for pharmaceutical products, and the marketability of any products for which we may receive regulatory approval for commercial sale depends on those payors’ coverage policies and reimbursement rates. Third-party payors may limit coverage to specific products on an approved list, or formulary, which might not include one or more of our product candidates, if approved. Third-party payors, together with regulators and others, are increasingly challenging the prices charged for pharmaceutical products and health services, in addition to their cost-effectiveness, safety and efficacy. In addition, no uniform policy for coverage and reimbursement exists in the United States. Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own coverage and reimbursement policies, but also have their own methods and approval process apart from Medicare determinations. Therefore, coverage and reimbursement rates can vary significantly from payor to payor. Moreover, obtaining coverage and adequate reimbursement is a time-consuming and costly process. We may be required to provide scientific and clinical support for the use of any product to each third-party payor separately with no assurance that approval will be obtained, and we may need to conduct expensive pharmacoeconomic studies in order to demonstrate the cost-effectiveness of our products. We cannot be certain that our product candidates will be considered cost-effective by third-party payors. This process could delay the market acceptance of any product candidates for which we may receive approval and could have a negative effect on our future revenues and operating results. Other U.S. Healthcare Laws and Compliance Requirements Our business may be subject to healthcare fraud and abuse regulation and enforcement by both the federal government and the states in which we conduct our business, particularly once third-party reimbursement becomes available for one or more of our products. The healthcare fraud and abuse laws and regulations that may affect our ability to operate include, but are not limited to: ● The federal Anti-Kickback Statute, which prohibits, among other things, knowingly and willfully soliciting, receiving, offering or paying any remuneration (including any kickback, bribe or rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce, or in return for, either the referral of an individual, or the purchase, lease, order or recommendation of any good, facility, item or service for which payment may be made, in whole or in part, under the Medicare and Medicaid programs, or other federal healthcare programs; ● The federal civil and criminal false claims laws and civil monetary penalty laws, including the civil False Claims Act, which prohibits, among other things, knowingly presenting, or causing to be presented, claims for payment of government funds that are false or fraudulent, or knowingly making, or using or causing to be made or used, a false record or statement material to a false or fraudulent claim to avoid, decrease, or conceal an obligation to pay money to the federal government; 118 Table of Contents ● HIPAA, which, among other things, prohibits executing a scheme to defraud any healthcare benefit program, including private third-party payors, and prohibits (i) knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement or representation and (ii) making or using any false writing or document knowing the same to contain any materially false, fictitious or fraudulent statement or entry in connection with the delivery of or payment for healthcare benefits, items or services; ● HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and their respective implementing regulations, which impose requirements relating to the privacy, security and transmission of individually identifiable health information held by covered entities, including health plans, healthcare clearinghouses and certain healthcare providers, and their business associates, individuals or entities that perform certain services on behalf of a covered entity that involve the use or disclosure of individually identifiable health information. HITECH also created new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce HIPAA and seek attorneys’ fees and costs associated with pursuing federal civil actions; ● Federal laws that require pharmaceutical manufacturers to report certain calculated product prices to the government or provide certain discounts or rebates to government authorities or private entities, often as a condition of reimbursement under government healthcare programs; ● The federal Physician Payments Sunshine Act, being implemented as the Open Payments Program, which requires manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to the CMS, information related to direct or indirect payments and other transfers of value to physicians and teaching hospitals, as well as ownership and investment interests held in a company by physicians and their immediate family members. Beginning in 2022, applicable manufacturers will also be required to report information regarding payments and transfers of value provided to physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists and certified nurse-midwives; and ● U.S. state and local laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; 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 or otherwise restrict payments that may be made to healthcare providers; state laws that restrict the ability of manufacturers to offer co-pay support to patients for certain prescription drugs; state laws that require drug manufacturers to report information related to clinical trials, or information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; state laws that require drug manufacturers to report information on the pricing of certain drugs; state laws and local ordinances that require identification or licensing of sales representatives; state and local laws regarding the manufacturing and distribution of drugs; and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts. We will be required to spend substantial time and money to ensure that our business arrangements with third parties comply with applicable healthcare laws and regulations. Even then, governmental authorities may conclude that our business practices do not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations. If governmental authorities find that our operations violate any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, disgorgement, individual imprisonment, exclusion from government funded healthcare programs, such as Medicare and Medicaid, and additional reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws, and we may be required to curtail or restructure our operations. Moreover, we expect that there will continue to be federal and state laws and regulations, proposed and implemented, that could impact our operations and business. In addition, the approval and commercialization of any product candidate we develop outside the United States will also likely subject us to foreign equivalents of the healthcare laws mentioned above, among other foreign laws. The extent to which future legislation or regulations, if any, relating to health care fraud and abuse laws or enforcement, may be enacted or what effect such legislation or regulation would have on our business remains uncertain. 119 Table of Contents Healthcare Reform In the United States there have been, and continue to be, several legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval of product candidates, restrict or regulate post-approval activities, and affect the ability to profitably sell product candidates for which marketing approval is obtained. Among policy makers and payors in the United States, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access. The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, collectively the Affordable Care Act, enacted in March 2010, has substantially changed healthcare financing and delivery by both governmental and private insurers. Among other things the Affordable Care Act included the following provisions: ● an annual, nondeductible fee on any entity that manufactures or imports certain specified branded prescription drugs and biologic agents apportioned among these entities according to their market share in some government healthcare programs; ● an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program; ● the Medicare Part D discount program, is being replaced by new programs created by a new price negotiation and discount programs created by the Inflation Reduction Act of 2022 discussed below, as a condition for the manufacturers’ outpatient drugs to be covered under Medicare Part D; ● extension of manufacturers’ Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations; ● expansion of eligibility criteria for Medicaid programs; ● expansion of the entities eligible for discounts under the 340B Drug Discount Program; ● a Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research; ● a 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; and ● a licensure framework for follow-on biological products. Since its enactment, there have been numerous judicial, administrative, executive, and legislative challenges to certain aspects of the Affordable Care Act, and we expect there will be additional challenges and amendments to the Affordable Care Act in the future. Various portions of the Affordable Care Act are currently undergoing legal and constitutional challenges in the United States Supreme Court and members of Congress have introduced several pieces of legislation aimed at significantly revising or repealing the Affordable Care Act. The implementation of the Affordable Care Act is ongoing, the law appears likely to continue the downward pressure on pharmaceutical pricing, especially under the Medicare program, and may also increase our regulatory burdens and operating costs. Litigation and legislation related to the Affordable Care Act are likely to continue, with unpredictable and uncertain results. In addition, other legislative changes have been proposed and adopted since the Affordable Care Act was enacted. On August 2, 2011, the Budget Control Act of 2011 was signed into law, which, among other things, included aggregate reductions to Medicare payments to providers of 2% per fiscal year, which went into effect on April 1, 2013 and, due to subsequent legislative amendments to the statute will remain in effect through the first 11 months of 2032 unless additional Congressional action is taken. These reductions were suspended from May 1, 2020 through March 31, 2022 due to the COVID-19 pandemic, and phased-in again on April 1, 2022 (between April 1, 2022 and June 30, 2022, a 1% cut took effect, with a 2% cut in place for the remainder of 2022). The Consolidated Appropriations Act of 2023 partially mitigated more severe Medicare pay cuts previously scheduled to begin on January 1, 2023; physician payment rates were reduced by 2% in 2023, 3.4% in 2024, and 2.93% in 2025. On January 2, 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, reduced Medicare payments to several providers, including hospitals, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. 120 Table of Contents Moreover, payment methodologies may be subject to changes in healthcare legislation and regulatory initiatives. For example, CMS may develop new payment and delivery models, such as bundled payment models. In addition, recently there has been heightened governmental scrutiny over the manner in which manufacturers set prices for their commercial products, which has resulted in several Congressional inquiries and proposed and enacted state and federal legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs and reform government program reimbursement methodologies for pharmaceutical products. Notably, on August 16, 2022, President Biden signed the “Inflation Reduction Act of 2022” (IRA) into law, incorporating many key provisions of the “Build Back Better Act”. Prescription drug price reform is a focal point of this landmark legislation that incorporates many proposals advanced over the last decade to overhaul drug costs under the Medicare program. Key provisions of the law permit CMS to negotiate Part D drug prices for an increasing number of drugs over a five-year period, replace the Medicare Coverage Gap Discount Program with a new Manufacturer Refund Program for drugs not subject to negotiation, and redesign the Part D benefit to eliminate the coverage gap and realign the cost responsibility in the initial and catastrophic phases of coverage among payors, manufacturers, Government and patients (capping out-of-pocket costs at US$2,000 starting in 2025). In addition, the law penalizes drug manufacturers for price increases that outpace the rate of inflation (for products under Medicare Parts D/B). The IRA follows years of attempts by the federal government to reform and/or control drug pricing. For example, at the federal level, the previous administration’s budget proposal for fiscal year 2021 included a US$135 billion allowance to support legislative proposals seeking to reduce drug prices, increase competition, lower out-of-pocket drug costs for patients and increase patient access to lower-cost generic and biosimilar drugs. There have been legislative proposals to revise provisions of the IRA, though the Trump Administration currently appears to be defending certain provisions, including price negotiation. See Novartis Pharm. Corp. v. Sec’y U.S. Dept. of Health and Human Services. (Case No 24-2968), Brief for the Appellee (3rd Cir., Feb 19, 2025). Additionally, on May 30, 2018, the Right to Try Act was signed into law. The law, among other things, provides a federal framework for certain patients to access certain investigational new drug products that have completed a Phase 1 clinical study and that are undergoing investigation for FDA approval. Under certain circumstances, eligible patients can seek treatment without enrolling in clinical studies and without obtaining FDA permission under the FDA expanded access program. There is no obligation for a drug manufacturer to make its drug products available to eligible patients as a result of the Right to Try Act. If we obtain approval to market a product candidate in the United States, any healthcare reforms adverse to drug manufacturers, including but not limited to, any significant spending reductions affecting Medicare, Medicaid or other publicly funded or subsidized health programs, that may be implemented and/or any significant taxes or fees that may be imposed on us could have an adverse impact on our results of operations. Another potential area of further healthcare reform is the 340B Drug Pricing Program, which was created by Congress in 1992 to “stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.” Drug manufacturers are incentivized to participate in this program as any manufacturer who wants their medication covered by Medicaid must also provide a discount to 340B covered entities, which includes a variety of healthcare entities that must abide by certain eligibility criteria in order to participate. This program requires drug manufacturers to provide outpatient drugs to eligible entities at a significantly discounted price which can result in savings between 20-50% or more. Growth of the 340B program has continued to accelerate as more entities participate in the program and, thus, more patients qualify for 340B drugs. The value of the drug purchases by covered entities through the 340B program has grown exponentially year-over-year, with 2022 data indicating that discounted drugs purchased through the 340B program reached approximately US$53.7 billion annually. In the last decade drug manufacturers have opposed the 340B program publicly, as the program has experienced significant growth which corresponds to greater lost revenue potential for the manufacturers. There is a high degree of legal, legislative and public scrutiny as manufacturers have challenged some aggressive covered entity practices in litigation (with mixed success) and legislative reform proposals seek great transparency and accountability by the participating entities. Nonetheless, there is general industry consensus that the program will remain available in the long-term and there is a reasonable expectation that it will continue to have a material impact on the financial performance of manufacturers as program growth further erodes manufacturer revenue. 121 Table of Contents Beyond the potential for legislative reforms by Congress, the cost of prescription pharmaceuticals and biological products has been the subject of considerable discussion in the United States. For example, President Trump has signed multiple executive orders addressing prescription drug pricing and access, including: on April 15, 2025, outlining several actions the Secretary of the Department of HHS must take to optimize healthcare regulations that will provide access to prescription drugs at lower costs; on May 5, 2025, aiming to promote domestic production of critical medicines; and on May 12, 2025, aiming to establish a “most favored nation” drug pricing policy that would tie U.S. drug prices to the prices paid for drugs in other countries. Since the May 12, 2025 “most favored nation” executive order, the Trump administration has continued to exert pressure on drug manufacturers to implement “most favored nation” pricing, including by suggesting that the administration may impose significant tariffs on pharmaceuticals if such manufacturers do not reach agreements to implement “most favored nation” pricing. Additionally, on November 6, 2025, CMS announced a new voluntary payment initiative called the GENEROUS Model (GENErating cost Reductions for U.S. Medicaid Model) where drug manufacturers may voluntarily offer supplemental rebates to participating state Medicaid programs that are intended to provide such Medicaid programs with a “most favored nation” price for participating manufacturers’ products. Moreover, there have been several recent U.S. Congressional inquiries and proposed federal legislation designed to, among other things, bring more transparency to drug and biological product pricing, review the relationship between pricing and manufacturer patient support programs, reduce the cost of prescription drugs and biological products under Medicare and reform government program reimbursement methodologies for drug and biological products. It remains to be seen how these drug pricing initiatives will affect the broader pharmaceutical industry. 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. European Regulation Government Regulation and Product Approval In order to market any product outside of the United States, a company must also comply with numerous and varying regulatory requirements of other countries and jurisdictions regarding quality, safety and efficacy and governing, among other things, clinical trials, marketing authorization, commercial sales and distribution of products. Whether or not it obtains FDA approval for a product, an applicant will need to obtain the necessary approvals by the comparable foreign regulatory authorities before it can commence clinical trials or marketing of the product in those countries or jurisdictions. The process governing approval of biological medicinal products in the European Union and the United Kingdom generally follows the same principles as in the United States. Such products are subject to extensive pre- and post-market regulation by regulatory authorities at both the European Union and national levels. Clinical Trial Approval Similar to the United States, the various phases of non-clinical and clinical research in the European Union and the United Kingdom are subject to significant regulatory controls. Pursuant to the Clinical Trials Regulation EU 536/2014 (“CTR”), a system for the approval and conduct of clinical trials in the European Union has been implemented. Under this new system, an applicant must submit one online application via a single online platform known as the Clinical Trials Information System (“CTIS”) for approval to run a clinical trial in several European Union member states. This system was optional for new clinical trials applied for between January 31, 2022 and January 31, 2023, and is compulsory for all new clinical trials submitted after January 31, 2023. Furthermore, the applicant may only start a clinical trial at a specific site after the competent ethics committee has issued a favorable opinion. The clinical trial application must be accompanied by an investigational medicinal product dossier with supporting information prescribed by the CTR and further detailed in applicable guidance documents. The CTIS database has a public website which includes various details of each clinical trial conducted in the EU under the new system, including the application for authorization to conduct a clinical trial and any review by a regulatory or ethics body. The CTR requires all information stored in the database to be publicly available, unless exempted under the CTR to protect: (a) personal data; (b) commercially confidential information, in particular the marketing authorization status of the medicine, unless there is an overriding public interest; (c) confidential communication between Member States in the preparation of their assessment; or (d) supervision of clinical trials by Member States. 122 Table of Contents Under the CTR, the sponsor of a clinical trial must publish (a) summary results of the clinical trial within 1 year after the end of the trial (including a phase I trial); and (b) clinical study reports of the data generated in the course of the clinical trial within 30 days after the grant of the relevant marketing authorization. Special rules apply outside the CRT for pediatric studies. In particular, holders of marketing authorizations valid in the European Union which are sponsors of clinical trials involving pediatric populations must submit to the competent authorities the results of said trials within six months of completion of the studies concerned. Clinical trials approved under the old legislative framework, the Clinical Trials Directive 2001/20/EC and the Directive 2005/28/EC on GCP, both as implemented through national legislation of the European Union member states, will continue to be governed by the old legislative framework until January 31, 2025. After January 31, 2025, the CTR will automatically begin to apply to those clinical trials. PRIME Designation in the European Union In March 2016, the EMA launched an initiative to facilitate development of product candidates in indications, often rare, for which few or no therapies currently exist. The PRIority Medicines, or PRIME, scheme is intended to encourage the development of medication in areas of unmet medical need and provides accelerated assessment of products representing substantial innovation reviewed under the centralized procedure. Products from small- and medium-sized enterprises can apply for earlier entry into the PRIME scheme on the basis of compelling non-clinical data and tolerability data from initial clinical trials. Many benefits accrue to sponsors of product candidates with PRIME designation, including but not limited to, early and proactive regulatory dialogue with the EMA, frequent discussions on clinical trial designs and other development program elements, and accelerated marketing authorization application assessment once a dossier has been submitted. Importantly, a dedicated EMA contact and rapporteur from the Committee for Human Medicinal Products, or CHMP, are appointed early in the PRIME scheme facilitating increased understanding of the product at the EMA’s Committee level. A kick-off meeting initiates these relationships and includes a team of multidisciplinary experts at the EMA to provide guidance on the overall development and regulatory strategies. Marketing Authorization To obtain marketing authorization of a biological medicinal product under the European Union regulatory system, an applicant must submit a marketing authorization application, or MAA, either under a centralized procedure administered by the EMA or one of the procedures administered by competent authorities in the European Union member states: the decentralized procedure, national procedure, or mutual recognition procedure. A marketing authorization may be granted only to an applicant established in the European Union. The centralized procedure provides for the grant of a single marketing authorization by the European Commission that is valid for all European Union member states as well as in the European Economic Area countries Iceland, Liechtenstein and Norway. Pursuant to Regulation (EC) No. 726/2004, the centralized procedure is compulsory for specific products, including for medicines produced by certain biotechnological processes, products designated as orphan medicinal products, advanced therapy products and products with a new active substance indicated for the treatment of certain diseases, including products for the treatment of viral diseases and cancer. For those products for which the use of the centralized procedure is not mandatory, applicants may elect to use the centralized procedure where either the product contains a new active substance not yet authorized in the European Union, or where the applicant can show that the product constitutes a significant therapeutic, scientific or technical innovation or for which a centralized process is in the interest of patients at a European Union level. Under the centralized procedure, the CHMP is responsible for conducting an initial assessment of whether a product meets the required quality, safety and efficacy requirements, and whether a product has a positive benefit/risk profile. Under the centralized procedure in the European Union, the maximum timeframe for the evaluation of an MAA is 210 days from receipt of a valid MAA, excluding clock stops when additional information or written or oral explanation is to be provided by the applicant in response to questions of the CHMP. Clock stops may extend the timeframe of evaluation of an MAA considerably beyond 210 days. Where the CHMP gives a positive opinion, it provides the opinion together with supporting documentation to the European Commission, who make the final decision to grant a marketing authorization, which is issued within 67 days of receipt of the EMA’s recommendation. Accelerated evaluation may be granted by the CHMP in exceptional cases, when a medicinal product is of major interest from the point of view of public health and, in particular, from the viewpoint of therapeutic innovation. If the CHMP accepts such a request, the timeframe of 210 days for assessment will be reduced to 150 days (excluding clock stops), but it is possible that the CHMP may revert to the standard time limit for the centralized procedure if it determines that the application is no longer appropriate to conduct an accelerated assessment. 123 Table of Contents For products not falling within the mandatory scope of the centralized procedure, national marketing authorizations may be obtained, which are issued by the competent authorities of the European Union member states and only cover their respective territory. Where a product has already been authorized for marketing in an European Union member state, this national marketing authorization can be recognized in another European Union member state through the mutual recognition procedure. If the product has not received a national marketing authorization in any member state at the time of application, it can be approved simultaneously in various European Union member states through the decentralized procedure. As with the centralized procedure, the competent authorities of the European Union member states assess the risk-benefit balance of the product on the basis of scientific criteria concerning its quality, safety and efficacy before granting the marketing authorization. Pediatric Studies Prior to obtaining a marketing authorization in the European Union, companies developing a new medicinal product must agree upon a Pediatric Investigation Plan, or PIP, with the EMA’s Pediatric Committee, or PDCO, and must conduct pediatric clinical trials in accordance with that PIP, unless a waiver applies, (e.g., because the relevant disease or condition occurs only in adults). The PIP sets out the timing and measures proposed to generate data to support a pediatric indication of the drug for which marketing authorization is being sought. The MAA for the product must include the results of pediatric clinical trials conducted in accordance with the PIP, unless a waiver applies, or a deferral has been granted by the PDCO of the obligation to implement some or all of the measures of the PIP, in which case the pediatric clinical trials must be completed at an agreed later date. Products that are granted a marketing authorization with the results of pediatric clinical trials conducted in accordance with the PIP are eligible for a six month extension of the protection under a supplementary protection certificate (if any is in effect at the time of approval) even where the trial results do not support a pediatric indication, as long as the results are included in the summary of product characteristics and, if appropriate, in the package leaflet of the medicinal product. In the case of orphan medicinal products, a two-year extension of the orphan market exclusivity may be available. This pediatric reward is subject to specific conditions and is not automatically available when data in compliance with the PIP are developed and submitted. Data and Marketing Exclusivity The European Union also provides opportunities for data and market exclusivity. Upon receiving marketing authorization in the European Union, an innovative medicinal product will generally receive eight years of data exclusivity and an additional two years of market exclusivity. Data exclusivity prevents the regulatory authorities from accepting MAAs from generic, hybrid abridged or biosimilar applicants seeking to rely on the innovator’s preclinical and clinical trial data contained in the dossier of the reference product when applying for a generic, hybrid abridged or biosimilar marketing authorization in the European Union for a period of eight years from the date on which the reference product was first authorized in the European Union. During an additional two-year period of market exclusivity, a generic or biosimilar MAA can be submitted, and the innovator’s data may be referenced and relied on, but no generic or biosimilar product can be marketed until the expiration of the additional two-year market exclusivity period. The overall ten-year period will be extended to a maximum of eleven years if, during the first eight years of those ten years, the marketing authorization holder obtains an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to authorization, is held to bring a significant clinical benefit in comparison with existing therapies. Even if a compound is considered to be a new chemical entity so that the innovator gains the prescribed period of data exclusivity, another company may market another version of the product if such company obtained marketing authorization based on an MAA with a complete independent data package including preclinical tests and clinical trials. Patent Term Extensions in the European Union and Other Jurisdictions The European Union also provides for patent term extension through Supplementary Protection Certificates, or SPCs. The rules and requirements for obtaining a SPC are similar to those in the United States. An SPC may extend the term of a patent for up to five years after its originally scheduled expiration. In certain circumstances, these periods may be extended for six additional months if a pediatric reward is obtained, which is described in detail below. Although SPCs are available throughout the European Union, sponsors must apply on a country-by-country basis. Similar patent term extension rights exist in certain other foreign jurisdictions outside the European Union. 124 Table of Contents Periods of Authorization and Renewals A marketing authorization is valid for five years, in principle, and it may be renewed after five years on the basis of a reevaluation of the risk-benefit balance by the EMA or by the competent authority of the authorizing member state. To that end, the marketing authorization holder must provide the EMA or the competent authority in a Member State with a consolidated version of the file in respect of quality, safety and efficacy, including all variations introduced since the marketing authorization was granted, at least six months before the marketing authorization ceases to be valid. Once renewed, the marketing authorization is valid for an unlimited period, unless the European Commission or the competent authority decides, on justified grounds relating to pharmacovigilance, to proceed with one additional five-year renewal period. Any authorization that is not followed by the placement of the medicine on the European Union market (in the case of the centralized procedure) or on the market of the authorizing member state within three years after authorization ceases to be valid. Regulatory Requirements After Market Authorization Following approval, the holder of the marketing authorization is required to comply with a range of requirements applicable to the manufacturing, marketing, promotion and sale of the medicinal product. These include compliance with the European Union’s stringent pharmacovigilance or safety reporting rules, pursuant to which post-authorization studies and additional monitoring obligations can be imposed. In addition, the manufacturing of authorized products, for which a separate manufacturer’s license is mandatory, must also be conducted in strict compliance with the EMA’s cGMP requirements and comparable requirements of other regulatory bodies in the European Union, which mandate the methods, facilities and controls used in manufacturing, processing and packing of medicines to assure their safety and identity. Finally, the marketing and promotion of authorized products, including industry-sponsored continuing medical education and advertising directed toward the prescribers of medicinal products and/or the general public, are strictly regulated in the European Union. It is prohibited to advertise prescription-only medicinal products to patients in the EU. Orphan Designation and Exclusivity An orphan designation provides a number of benefits, including fee reductions, regulatory assistance and the possibility to apply for a centralized European Union marketing authorization. Marketing authorization for an orphan medicine leads to a ten-year period of market exclusivity. During this market exclusivity period, it is not permissible for the EMA, the European Commission or any member state to accept an application for, or grant a marketing authorization for, the same or a “similar medicinal product”, unless a derogation applies. A “similar medicinal product” is defined as a medicinal product containing a similar active substance or substances as contained in an authorized orphan medicinal product, and which is intended for the same therapeutic indication. The market exclusivity period for the authorized therapeutic indication may, however, be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria for orphan designation because, for example, the product is sufficiently profitable not to justify market exclusivity. The criteria for designating an orphan medicine in the European Union are similar in principle to those in the United States. Regulation (EC) No 141/2000 and Regulation (EC) No. 847/2000 provide that a product can be designated as an orphan medicine by the European Commission if its sponsor can establish: that the product is intended for the diagnosis, prevention or treatment of (1) a life threatening or chronically debilitating condition affecting not more than 5 in 10,000 persons in the European Union when the application is made, or (2) a life-threatening, seriously debilitating or serious and chronic condition in the European Union and that without incentives it is unlikely that the marketing of the medicine in the European Union would generate sufficient return to justify the necessary investment. For either of these conditions, the applicant must demonstrate that there exists no satisfactory method of diagnosis, prevention or treatment of the condition in question that has been authorized in the European Union or, if such method exists, the medicine will be of significant benefit to those affected by that condition. Orphan medicines are eligible for financial incentives such as reduction of fees or fee waivers made available by the European Union and its member states to support research into, and the development and availability of, orphan medicines. The application for orphan designation must be submitted before the application for marketing authorization. The applicant will be eligible to a total or partial fee reduction for the MAA if the orphan designation has been granted to that applicant. Orphan designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process. 125 Table of Contents Pediatric Exclusivity If an applicant obtains a marketing authorization in all European Union member states, or a marketing authorization granted in the centralized procedure by the European Commission, and the study results for the pediatric population carried out as agreed in a PIP are included in the product information, even when they do not support a pediatric indication, the medicine is then eligible for an additional six-month period of qualifying patent protection through extension of the term of the SPC. If the medicinal product is an orphan medicinal product, the ten years of orphan market exclusivity will be extended by an additional period of two years. Brexit and the Regulatory Framework in the United Kingdom The UK formally left the European Union on January 31, 2020. There was a transitional period, during which European Union laws continued to apply in the UK, which ended on December 31, 2020. The UK and European Union signed an EU-UK Trade and Cooperation Agreement, which became provisionally applicable on January 1, 2021 and which was later ratified by both the UK and the European Union and entered into force on May 1, 2021. This agreement was subsequently amended by the Windsor Framework, which took effect on 1 January 2025 as regards medicines. These agreements provide details on how some aspects of the UK and European Union’s relationship regarding medicinal products will operate, particularly in relation to Good Manufacturing Practice; however, there are still many uncertainties. Since the regulatory framework for medicinal products in the UK covering quality, safety and efficacy of medicinal products, clinical trials, marketing authorization, commercial sales and distribution of medicinal products is derived from European Union directives and regulations, the current regulatory framework in the UK is broadly identical to the framework in the European Union, with some small differences. The EU Clinical Trials Regulation (described in detail above), which took effect on January 31, 2022, does not apply in the United Kingdom. However, post-Brexit, the UK Government is free to adopt laws that could diverge from the laws in the European Union. This could materially impact the future regulatory regime which applies to products and the approval of product candidates in Great Britain. It remains to be seen how Brexit will impact regulatory requirements for product candidates and products in the UK in the long-term. However, as of January 1, 2024, the Medicines and Healthcare products Regulatory Agency (“MHRA”), the UK medicines and medical devices regulator, has implemented a new framework for approval of applications for UK marketing authorizations whereby marketing authorization approvals from EMA and certain other regulators will be taken into account when considering such UK applications. Currently, there is no pre-marketing authorization orphan designation in Great Britain. Instead, the MHRA reviews applications for orphan designation in parallel to the corresponding MAA. The criteria are essentially the same, but have been tailored for the Great Britain market, i.e., the prevalence of the condition in Great Britain (rather than the EU) must not be more than five in 10,000. Should an orphan designation be granted, the period of market exclusivity will be set from the date of first approval of the product in Great Britain. Pricing and Reimbursement Environment Even if a medicinal product obtains a marketing authorization in the European Union or the United Kingdom, there can be no assurance that reimbursement for such product will be secured on a timely basis or at all. Pricing and reimbursement of medicines is a matter reserved to individual countries. Each country is free to restrict the range of medicinal products for which their national health insurance systems provide reimbursement, and to control the prices and reimbursement levels of medicinal products for human use. Each country may approve a specific price or level of reimbursement for the medicinal product, or alternatively adopt a system of direct or indirect controls on the profitability of the company responsible for placing the medicinal product on the market, including volume-based arrangements, rebates, caps and reference pricing mechanisms. 126 Table of Contents PRC Regulation PRC Drug Regulation The Drug Administration Law of the PRC, or the Drug Administration Law, promulgated by the Standing Committee of the NPC and the Implementing Measures of the Drug Administration Law, or the Implementing Measures of the Drug Administration law, promulgated by the State Council, have jointly established the legal framework for the administration of pharmaceutical products in China, including the research, development and manufacturing of new drugs. The Drug Administration Law applies to entities and individuals engaged in the development, production, trade, application, supervision and administration of pharmaceutical products, and regulates and provides a framework for the administration of pharmaceutical manufacturers, pharmaceutical trading companies and medicinal preparations of medical institutions, and the development, research, manufacturing, distribution, packaging, pricing and advertisements of pharmaceutical products. The Implementing Measures of the Drug Administration Law, on the other hand, provides detailed implementation regulations for the Drug Administration Law. The recent amendment to the Drug Administration Law, which became effective in December 2019, brought a series of changes to the drug supervision and administration system, including, but not limited to, the clarification of the drug marketing authorization holder system, pursuant to which each marketing authorization holder shall assume responsibilities for non-clinical trials, clinical trials, manufacturing and marketing, post-marketing studies, monitoring, reporting and handling of any adverse reactions of its drugs. The amendment also stipulates that the State supports the innovation of drugs with clinical value and specific or special effects on human diseases, encourages the development of drugs with new therapeutic mechanisms and that have multi-targeted, systematic regulatory and intervention functions on the human body and promotes the technological advancement of drugs. The NMPA has since promulgated two key implementing regulations for the amended Drug Administration Law: (i) the amended Administrative Measure for Drug Registration and (ii) the amended Measures on the Supervision and Administration of the Manufacture of Drugs. Both took effect on July 1, 2020. The NMPA also promulgated the Chemical Drug Registration Classification and Application Data Requirements in June 2020 as detailed implementing rules on drug classification. We are required to follow the above-mentioned regulations in respect of our non-clinical research, clinical trials and production of new drugs. Regulatory Authorities and Recent Government Reorganization Pharmaceutical products and medical devices and equipment in China are monitored and supervised on a national scale by the NMPA (formerly known as China Food and Drug Administration, or the CFDA), while the local provincial medical products administrative authorities are responsible for the supervision and administration of drugs within their respective administrative regions. Pursuant to the Decision of the First Session of the Thirteenth National People’s Congress on the State Council Institutional Reform Proposal made by the NPC in March 2018, the NMPA is no longer an independent agency and its duties shall be performed by the newly established State Administration for Market Regulation, or the SAMR, into which the various agencies responsible for, among other areas, consumer protection, advertising, anticorruption, pricing, fair competition and intellectual property, have been merged. The NMPA is still however the chief drug regulatory agency and implements the same laws, regulations, rules, and guidelines as the CFDA, and the NMPA regulates almost all of the key stages of the life cycle of pharmaceutical products, including non-clinical trials, clinical trials, marketing approvals, manufacturing, advertising and promotion, distribution, and pharmacovigilance (i.e., post-marketing safety reporting obligations). The Center for Drug Evaluation, or the CDE, which remains under the NMPA, conducts the technical evaluation of each drug and biologic application for safety and efficacy. Formed on March 2018, the National Health Commission, or the NHC, (formerly known as the Ministry of Health, or the MOH, and the National Health and Family Planning Commission, or the NHFPC), is China’s chief healthcare regulator. It is primarily responsible for overseeing the operation of medical institutions, which also serve as clinical trial sites, and regulating the licensure of hospitals and medical personnel. 127 Table of Contents Non-Clinical Research In 2003, the NMPA promulgated the Administrative Measures for Good Laboratories Practice of Non-clinical Laboratory, which was revised on in July 2017, to improve the quality of non-clinical research, and began conducting the Good Laboratories Practice certification program. Pursuant to the Circular on Administrative Measures for Certification of GLP for Non-clinical Laboratory issued by the NMPA in April 2007, the NMPA is responsible for the certification of non-clinical research institutions nationwide and local provincial medical products administrative authorities are in charge of the daily supervision of non-clinical research institutions. The NMPA decides whether an institution is qualified for undertaking pharmaceutical non-clinical research by evaluating such institution’s organizational administration, its research personnel, its equipment and facilities, and its operation and management of non-clinical pharmaceutical projects. A GLP Certification will be issued by the NMPA if all the relevant requirements are satisfied, and such certification will be published on the NMPA’s website. In January 2023, the NMPA promulgated the amended the Administrative Measures for Certification of GLP for Non-clinical Laboratory, the Amended Administrative Measures, which became effective on July 1, 2023. Pursuant to the Amended Administrative Measures, A GLP Certification will be valid for five years and the GLP institution shall submit a renewal application before the expiration of GLP Certificate. Preclinical Development The NMPA requires supporting preclinical data for the registration applications for imported and domestic drugs. Preclinical work, including pharmacology and toxicology studies, must satisfy the requirements of the Administrative Measures for Good Laboratories Practice of Non-clinical Laboratory. No approval is required from the NMPA to conduct preclinical studies. Clinical Trials and Marketing Approval of New Drugs Registration Categories Pursuant to the Administrative Measures for Drug Registration in January 2020 and effective on July 1, 2020, which provides the standards and requirements for clinical trials and drug registration applications. Drug marketing registration applications are divided into three categories, namely traditional Chinese drugs, chemical drugs and biological products, and each type is further divided into several sub-types. For example, the registration applications of chemical drugs are further categorized by innovative chemical drugs, improved new chemical drugs, and generic chemical drugs, among others. As provided in the Administrative Measures for Drug Registration, the Drug Administration Law and Implementing Measures of the Drug Administration Law, upon completion of non-clinical research, clinical trials shall be conducted for the application of new drug registration, upon approval from NMPA or authorized institutions. Prior to engaging with the NMPA on research and development approval, an applicant shall determine the registration category for its product candidate (subject to ultimate confirmation by the NMPA), which will determine the requirements for its clinical trial and marketing application. There are five categories for chemical drugs: Category 1, or innovative drugs, refers to drugs with NCEs that have not been marketed anywhere in the world; Category 2, or improved new drugs, refers to drugs with a new indication, dosage form, route of administration, combination or certain formulation changes not previously approved anywhere in the world; Categories 3 and 4 refer to generic drugs that reference an innovator drug (or certain well-known generic drugs) marketed either abroad or in China, respectively; and Category 5 refers to innovative or generic drugs that have already been marketed abroad but are not yet approved in China (i.e., various imported drugs). 128 Table of Contents Priority Review Program under Current Reform Frame The NMPA has adopted several expedited review and approval mechanisms since 2009 and created additional expedited programs in recent years that are intended to encourage innovation. Applications for these expedited programs can be submitted after the clinical trial application is admitted for review by the CDE. The newly amended Administrative Measures for Drug Registration, which became effective on July 1, 2020, set up several acceleration procedures for drug marketing registration including procedures for breakthrough therapy designation drugs, procedures for conditional approval, procedures for priority review and approval at the marketing authorization application stage and procedures for special approval in public health emergencies. In order to implement the amended Administrative Measures for Drug Registration, on July 7, 2020, the NMPA promulgated the specific working procedures for the evaluation of breakthrough therapy designation drugs, conditional approvals and priority review and approval at the marketing authorization application stage which replaced the previous priority evaluation and approval program. According to such working procedures, a priority review market authorization pathway may be available to the following drugs with distinctive clinical benefits: (i) drugs in short supply for urgent clinical need, innovative drugs and modified new drugs for the prevention and treatment of serious infectious diseases, rare diseases and other diseases; (ii) pediatric drugs of new varieties, dosage forms and specifications that meet the physiological characteristics of children; (iii) vaccines urgently needed for disease prevention and control and innovative vaccines; (iv) drugs included in the procedures for breakthrough therapy designation drugs; (v) drugs fulfilling the requirements for conditional approval; and (vi) other drugs for priority review and approval stipulated by the NMPA. We believe that our current clinical stage product candidate could be classified as a drug under categories (i) and (ii) of the working procedures described above. Clinical Trial Approval All clinical trials conducted in China for the purpose of seeking marketing approval must be approved and conducted at a pharmaceutical clinical trial institution which shall be under filing administration. In addition, the NMPA has adopted a notification system for clinical trials of new drugs. Pursuant to the Opinions on Deepening the Reform of the Evaluation and Approval Systems and Encouraging Innovation on Drugs and Medical Devices, or the Innovation Opinion, the Announcement on Adjusting the Evaluation and Approval Procedure of Drug Clinical Trial and the newly amended Drug Administration Law, clinical trials may be commenced as long as the applicant has not received any objections from the CDE within 60 business days of application filing. International Multi-center Clinical Trials Regulations In January 2015, the NMPA promulgated the Notice on Issuing the International Multi-Center Clinical Trial Guidelines (Trial) to provide guidance on the regulation of the application, implementation and administration of international multi-center clinical trials in China. Pursuant to the Notice on Issuing the International Multi-Center Clinical Trial Guidelines (Trial), international multi-center clinical trial applicants may simultaneously perform clinical trials in different centers using the same clinical trial protocol. Where the applicant plans to make use of the data derived from the international multi-center clinical trials for its application to the NMPA for approval of an NDA, such international multi-center clinical trials shall satisfy, in addition to the requirements set forth in the Drug Administration Law and its implementation measures, the Administrative Measures for Drug Registration and other relevant laws and regulations, the following requirements: ● The applicant shall first conduct an overall evaluation on the global clinical trial data and further make trend analysis of the Asian and Chinese clinical trial data. In the analysis of Chinese clinical trial data, the applicant shall consider the representativeness of the research subjects, i.e., the participating patients; ● The applicant shall analyze whether the amount of Chinese research subjects is sufficient to assess and adjudicate the safety and effectiveness of the drug under clinical trial, and satisfy the statistical and relevant legal requirements; and ● The onshore and offshore international multi-center clinical trial research centers shall be subject to on-site inspections by competent PRC governmental agencies. 129 Table of Contents International multi-center clinical trials shall follow international prevailing the Good Clinical Trial Practice, or GCTP, principles and ethics requirements. Applications shall ensure the truthfulness, reliability and trustworthiness of clinical trials results; the researchers shall have the qualification and capability to perform relevant clinical trials; and an ethics committee shall continuously review the trials and protect the subjects’ interests, benefits and safety. Before the performance of the international multi-center clinical trial, applicants shall obtain clinical trial approvals or complete filings pursuant to requirements under the local regulations where clinical trials are conducted, and register and disclose the information of all major researchers and clinical trial organizations on the NMPA drug clinical trial information platform. Pursuant to the Innovation Opinion, clinical trial data obtained from foreign centers may be used to apply for marketing application in China as long as such data meet the relevant requirements for the registration of drugs and medical devices in China. When using international multi-center clinical trial data to support marketing application in China, applicants shall provide the clinical trial data on racial difference, if any. Trial Exemptions and Acceptance of Foreign Data The NMPA may reduce its requirements for clinical trials and data, depending on the drug and the existing data. The NMPA has granted waivers for all or part of trials and has stated that it will accept data generated abroad (even if not as part of a global study), including early phase data, that meets its requirements. In July 2018, the NMPA issued the Technical Guidance Principles on Accepting Foreign Drug Clinical Trial Data, or the Guidance Principles, as one of the implementing rules for the Innovation Opinion. According to the Guidance Principles, the data of foreign clinical trials must meet certain authenticity, completeness, accuracy and traceability requirements, and such data must be obtained in consistency with the relevant requirements under the GCTP of the International Conference on Harmonization of Technical Requirements for Registration of Pharmaceuticals for Human Use. Additionally, clinical trial sponsors must be attentive to potentially meaningful ethnic differences in the subject population. The NMPA permits drugs approved outside of China to be approved in China on a conditional basis without pre-approval clinical trials being conducted in China. Specifically, in 2018, the NMPA issued the Procedures for Reviewing and Approval of Clinical Urgently Needed Overseas New Drugs, permitting drugs that have been approved within the last ten years in the United States, the European Union or Japan and that prevent or treat orphan diseases or prevent or treat serious life-threatening illnesses for which there is either no effective therapy in China or for which the foreign-approved drug would have clear clinical advantages. Applicants are required to establish a risk mitigation plan and may be required to complete trials in China after the drug has been marketed. The CDE has developed a list of qualifying drugs that meet the foregoing criteria. Drug Clinical Trial Registration Pursuant to the Announcement on Drug Clinical Trial Information Platform released by the NMPA in September 2013, for all clinical trials approved by the NMPA and conducted in China, clinical trial registration must be completed and trial information must be published through the drug clinical trial information platform. In July 2020, the CDE released the Drug Clinical Trial Registration and Information Disclosure Practices (Trial). Under these measures, an applicant who has obtained the approval from the NMPA for a clinical trial and intends to conduct the clinical trial in China must complete trial pre-registration before starting the clinical trial and must also continue to update follow-up information according to the progress of clinical trial. If no subject has signed an informed consent within three years from the date of approval from the NMPA for the clinical trial, the approval will be automatically invalidated and the registration will not be granted. Human Genetic Resources Approval In 1998, the Ministry of Science and Technology and the MOH jointly established the rules for protecting and utilizing human genetic resources in China. In July 2015, the Ministry of Science and Technology issued the Service Guide for Administrative Licensing Items concerning Examination and Approval of Sampling, Collecting, Trading, Exporting Human Genetic Resources, or Taking Such Resources out of the PRC, which provides that foreign-invested drug marketing authorization applicants (i.e., sponsors) that sample and collect human genetic resources in clinical trials shall be required to make certain filings with the China Human Genetic Resources Management Office, or the HGRMO, through its online system. In October 2017, the Ministry of Science and Technology issued the Circular on Optimizing the Administrative Examination and Approval of Human Genetic Resources, which simplified the approval for sampling and collecting human genetic resources for the purpose of commercializing a drug in the PRC. 130 Table of Contents In May 2019, the State Council of PRC issued the National Regulations on the Management of Human Genetic Resources, which formalized the approval requirements pertinent to research collaborations between Chinese and foreign-owned entities. Pursuant to this new rule, a new notification system (as opposed to the advance approval approach originally in place) has been established for clinical trials using China’s human genetic resources at clinical institutions without involving the export of human genetic resources outside of China. Under the new system, a notification filing, specifying, among other things, the type, quantity and usage of the human genetic resource, with the HGRMO is required before conducting such clinical trials. The collection and use of China’s human genetic resources in international collaboration on basic scientific research involving the export of such human genetic resources are still subject to the approval of the HGRMO. In March 2022, the Ministry of Science and Technology promulgated the Draft Implementation Rules for the Administrative Regulations on Human Genetic Resources for public comment. The aforementioned draft refined the Administrative Regulations on Human Genetic Resources of the PRC, including but not limited to refining the definition of “human genetic resources information”, improving the identification standard of “foreign entities”, adjusting the scope of application of collection licensing, adjusting and improving the approval procedures for international cooperative scientific research and administrative supervision rules. On June 1, 2023, the Ministry of Science and Technology issued the Implementation Rules for the Administrative Regulations on Human Genetic Resources, which came into effect on July 1, 2023, and build on and introduce certain changes to the March 2022 Draft Implementation Rules. Clinical Trial Process and Good Clinical Practices Typically, drug clinical trials in China have four phases. Phase 1 refers to the initial clinical pharmacology and human safety evaluation studies. Phase 2 refers to the preliminary evaluation of a product candidate’s therapeutic efficacy and safety for target indication(s) in patients. Phase 3 (often the pivotal study) refers to clinical trials that further verify the product candidate’s therapeutic efficacy and safety on patients with target indication(s) and ultimately provide sufficient evidence for the review of a drug marketing application. Phase 4 refers to a new drug’s post-marketing study, which may be required by NMPA at its sole discretion, to assess therapeutic effectiveness and adverse reactions when the drug is widely used, to evaluate overall benefit-risk relationships of the drug when used among the general population or specific groups and to adjust the administration dose, etc. Pursuant to the NMPA, a clinical trial institution can be engaged by a sponsor to conduct a drug clinical trial after such institution has been duly recorded with the online platform designated by the NMPA. The newly amended Drug Administrative Law and the Regulations on the Administration of Drug Clinical Trial Institution jointly promulgated by the NMPA and the NHC specify the requirements for clinical trial institutions and recording procedures. Pursuant to these regulations, a clinical trial institution should comply with the requirements of cGCP and be capable of undertaking pharmaceutical clinical trials. It should evaluate or engage a third party to evaluate its clinical trial proficiency, facilities and expertise. According to the Implementing Measures of the Drug Administration Law, a sponsor should only engage a duly recorded clinical trial institution to carry out a drug clinical trial. The conduct of clinical trials must adhere to the cGCP and the protocols approved by the ethics committees of each study site. All applicants of pending drug registration submissions must conduct self-inspection and verification of their clinical trial data. In April 2020, the NMPA and the NHC released the amended Good Clinical Practice for Pharmaceutical Product, or the Amended GCP, which took effect on July 1, 2020. Compared to the cGCP, the Amended GCP provides comprehensive and substantive requirements on the design and conduct of clinical trials in China. In particular, the Amended GCP enhances the protection for study subjects and tightens the control over bio-samples collected under clinical trials. In addition, the Amended GCP requires that trial drugs shall be manufactured in compliance with pertinent requirements on good manufacturing of drugs for clinical trial and used in line with relevant trial protocols. The NMPA issued the consultation paper of Good Manufacturing Practice for Drugs Used in Clinical Trials in July 2018. 131 Table of Contents Communication with the CDE Pursuant to the Administrative Measures for Communication on the Research, Development and Technical Evaluation of Drugs promulgated by the NMPA on December 10, 2020, the applicants may propose to conduct communication meetings with the CDE during the research and development periods and in the registration applications of the innovative drugs. The communication meetings can be classified into three types. Type I meetings are convened to address key safety issues in clinical trials of drugs and key technical issues in the research and development of breakthrough therapeutic drugs. Type II meetings are held during the key research and development periods of drugs, mainly including meetings before the clinical trial application, meetings upon the completion of Phase 2 trials and before the commencement of Phase 3 trials, meetings before submitting a drug marketing application, and meetings for risk evaluation and control. Type III meetings refer to meetings that are not classified as Type I or Type II. According to the new Administrative Measures for Communication on the Research, Development and Technical Evaluation of Drugs, the applicant who apply for conditional approval and/or the priority review and approval procedures shall communicate with the CDE and obtain confirmation before submitting the marketing application to NMPA. In addition, except for (i) clinical trial of new drugs with clear technical guidelines, mature research experience, and guaranteed quality of the application materials, or (ii) international multi-center clinical trials that are simultaneously developed internationally and have been approved to conduct clinical trials in countries and/or regions with sound regulatory systems, the applicant in principle shall apply for communication with the CDE before clinical trial application for new drugs. Furthermore, where the application for clinical trials of new drug has been approved, upon the completion of Phase 1 and 2 clinical trials and prior to Phase 3 clinical trial, or before submitting a drug marketing application, the applicant may submit the application for Communication Session to the CDE. Drug Marketing Registration Application Pursuant to the newly amended Administrative Measures for Drug Registration, the applicant may submit an application for drug marketing registration to the CDE upon completion of relevant research on pharmacy, pharmacology, toxicology and drug clinical trials, determination of the quality standards of the drug, validation of commercial-scale production processes and preparation for acceptance of verification and inspection conducted by a professional technical institution designated as competent by the NMPA. The CDE will organize pharmaceutical, medical and other technicians to conduct comprehensive review of the safety, efficacy and quality controllability, among others, of the drug according to the application materials submitted by the applicant, the results of the verification and inspection conducted by a professional technical institution, etc. If the comprehensive review conclusion is affirmative, the drug shall be approved for marketing and a drug registration certificate will be issued containing the information of the drug approval number, the marketing authorization holders and the manufacturer. Drug technology transfer regulations In August 2009, the NMPA promulgated the Administrative Regulations for Technology Transfer Registration of Drugs to standardize the registration process of drug technology transfers, which include application for, and evaluation, examination, approval and monitoring of, drug technology transfers. Drug technology transfers refer to the transfer of drug production technology by the owner to a drug manufacturer and the application for drug registration by the transferee according to the provisions in the new regulations. Drug technology transfers include new drug technology transfers and drug production technology transfers. Manufacturing and Distribution According to the newly amended Drug Administration Law, the Implementing Measures of the Drug Administration Law and the Measures on the Supervision and Administration of the Manufacture of Drugs, facilities that manufacture drugs in China must receive a drug manufacturing license from the local drug regulatory authority. Each drug manufacturing license issued to a pharmaceutical manufacturing enterprise is effective for a period of five years. Any enterprise holding a drug manufacturing license is subject to review by the relevant regulatory authorities on an annual basis. According to such regulations and measures, to the extent a marketing authorization holder manufactures its drugs internally and not through CMOs, such marketing authorization holder must apply for a drug manufacturing license with the provincial counterpart of the NMPA, subject itself to inspections and other regulatory oversight by the agency. Similarly, to conduct sales, importation, shipping and storage, or collectively, the distribution activities, a company must obtain a Drug Distribution License from the local drug regulatory authority, subject to renewal every five years. A separate certification of compliance with the NMPA’s drug good supply practice is also required. 132 Table of Contents China has implemented a “Two-Invoice System” to control the distribution of prescription drugs. The “Two-Invoice System” generally requires that no more than two invoices be issued throughout the distribution chain: one from the manufacturer to a distributor and another from the distributor to the end-user hospital. This excludes the sale of products invoiced from the manufacturer to its wholly-owned or controlled distributors, or for imported drugs, to its exclusive distributor, or from a distributor to its wholly-owned or controlled subsidiary (or between its wholly-owned or controlled subsidiaries). However, the system still significantly limits the options for companies to use multiple distributors to reach a larger geographic area in China. Compliance with the Two-Invoice System is a prerequisite for pharmaceutical companies to participate in the procurement processes of public hospitals, which currently provide most of China’s healthcare services. Manufacturers and distributors that fail to implement the Two-Invoice System may lose their qualifications to participate in the bidding process. Non-compliant manufacturers may also be blacklisted from engaging in drug sales to public hospitals in a locality. Administrative Observation Periods for New Drugs According to the Implementing Measures of the Drug Administration Law, the NMPA may, for the purposes of protecting public health, set an administrative observation period of not more than five years for a new drug produced by a drug manufacturer. During the administrative observation period, no approval shall be given to any other manufacturer to produce or import the said drug. Non-Inferiority Standard In China, a drug may receive regulatory approval without showing superiority in its primary endpoint. Rather, a drug may be approved for use if it shows non-inferiority in its primary endpoint and superiority in one of its secondary endpoints. Packaging of Pharmaceutical Products Pursuant to the Administration of Quality of Drug Clinical Practice, the applicant shall be responsible for proper packaging and labeling of drugs for clinical trials, and in double-blinded clinical trials, the test drug shall be consistent with the control drug or placebo in appearance, odor, packaging, labeling and certain other features. According to the Measures for the Administration of Pharmaceutical Packaging promulgated in February 1988, pharmaceutical packaging must comply with national and professional standards. If there is no national or professional standard available, an applicant may formulate and implement its own standards after obtaining the approval of the provincial administration or bureau of standards. The applicant must reapply if it needs to change its own packaging standards. Drugs that have not developed and received approval for packaging standards must not be sold or marketed in the PRC (except for drugs for the military). Advertising of Pharmaceutical Products Pursuant to the Interim Administrative Measures for the Review of Advertisements for Drugs, Medical Devices, Health Food and Formula Food for Special Medical Purposes promulgated in December 2019, an enterprise seeking to advertise its pharmaceutical products must apply for an advertisement approval number. The advertisement approval number is issued by the relevant local administrative authority. The validity term of the advertisement approval number for drugs shall be consistent with the shortest validity term of the production registration certificate, filing certificate or production license. If no valid term is prescribed in the production registration certificate, filing certificate or production license, the valid term of the advertisement approval number shall be two years. The content of an approved advertisement may not be altered without prior approval. Insert Sheet and Labels of Pharmaceutical Products According to the Measures for the Administration of the Insert Sheets and Labels of Drugs, the insert sheets and labels of drugs should be reviewed and approved by the NMPA. A drug insert sheet should include the scientific data, conclusions and information concerning drug safety and efficacy in order to direct the safe and rational use of drugs. The inner label of a drug should bear such information as the drug’s name, indication or function, strength, dose and usage, production date, batch number, expiry date and drug manufacturer, and the outer label of a drug should indicate such information as the drug’s name, ingredients, description, indication or function, strength, dose and usage and adverse reaction. 133 Table of Contents Regulatory Intellectual Property Protections In January 2020, the United States and China signed the Economic and Trade Agreement Between the United States of America and the PRC (the “Trade Agreement”). Among other things, China agreed to provide for effective protection and enforcement of pharmaceutical-related intellectual property rights, including patents and undisclosed test or other data submitted as a condition of marketing approval, as further described below. These provisions of the Trade Agreement will need to be implemented in China. In October 2020, the Standing Committee of the NPC promulgated the amended PRC Patent Law, which became effective in June 2021. The newly amended PRC Patent Law sets up the framework and adds the provisions for patent linkage and patent term extension. However, the provisions for patent term extension and an early resolution mechanism are unclear and/or remain subject to the approval of implementing regulations that are still in draft form or have not yet been proposed, leading to uncertainty about their scope and implementation. Japan Regulation Manufacturers and sellers of drugs, quasi-drugs, cosmetics, medical devices and regenerative medical products (collectively the “Designated Products”) in Japan are subject to the supervision of the Minister of Health, Labor and Welfare, or MHLW, primarily under the Act on Securing Quality, Efficacy and Safety of Products Including Pharmaceuticals and Medical Devices of Japan, or the Pharmaceutical Act. Under the Pharmaceutical Act, a person is required to obtain from MHLW the relevant licenses in order to conduct the business of manufacturing, marketing or selling Designated Products. Applications for the market authorization of new products are made through the Pharmaceuticals and Medical Devices Agency, or the PMDA, to MHLW or – in the case of certain pharmaceuticals and all medical devices (other than medical devices with a GHTF classification of class IV) – to the relevant prefectural government or a particular registered certification body. The data of results of clinical trials and other pertinent data must be attached to an application for market authorization. If the drugs, medical devices or regenerative medical products under application are of types designated by ministerial ordinance of the MHLW, the attached data mentioned above must be obtained in compliance with the standards established by MHLW, such as the Good Laboratory Practice (the “GLP”) and the Good Clinical Practice (the “GCP”). Once an application for market authorization is submitted, a review team is formed, which consists of specialized officials of the PMDA, including chemistry/manufacturing, non-clinical, clinical, and biostatistics. Team evaluation results are passed to the PMDA’s external experts, who then report back to the PMDA. After a further team evaluation, a report is provided to MHLW; MHLW makes a final determination for market authorization after obtaining an opinion from the Pharmaceutical Affairs and Food Sanitation Council, or PAFSC. Before granting market authorization, PMDA conducts a review to determine whether or not the product in the application is suitable as a drug to be distributed by a person who has obtained a marketing business license for the type of drug concerned, and to confirm that the product has been manufactured in a plant compliant with Good Manufacturing Practice. With respect to prescription drugs, once the MHLW has approved the application for market authorization, the company can make the new drug available for physicians to prescribe. After that, the MHLW lists its NHI price within 60 days (or 90 days at the latest) after the market authorization is granted, and physicians can obtain reimbursement. For some medications, the MHLW requires additional post‑marketing studies (Phase IV) to further evaluate safety and/or to gather information concerning the quality, efficacy, and safety of the product under specified conditions. The MHLW also requires the drug’s sponsor to submit periodic safety update reports. Within three months from the specified re‑examination period, which is designated at the time of the approval of the application for the new product, the company must submit a re‑examination application to enable the drug’s quality, efficacy, and safety to be reassessed against approved labeling by the PMDA. The Pharmaceutical Act also provides for special regulations applicable to drugs, quasi-drugs, cosmetics and medical devices made of biological raw materials. These regulations impose various obligations on manufacturers and other persons in relation to manufacturing facilities, explanation to patients, labeling on products, record-keeping and reporting to MHLW. Under the Pharmaceutical Act, MHLW may take various measures to supervise manufacturing and marketing license holders of Designated Products. MHLW has authority to order manufacturing and marketing license holders to temporarily suspend the marketing, leasing or providing of the Designated Products to prevent risks, or increases in risks, to the public health. Also, MHLW may revoke a license or approval granted to a manufacturing and marketing license holders, or order a temporary business suspension or change in marketing director under certain limited circumstances such as violation of laws relating to drugs. 134 Table of Contents Orphan Drug Designation Drugs and medical devices can be designated as orphan drugs or medical devices under the Pharmaceutical Act if they are intended for use in less than 50,000 patients in Japan and for which there is a high medical need. They are designated by the MHLW based on the opinion of the PAFSC. The MHLW may designate drugs and medical devices satisfying the following criteria as orphan drugs/medical devices; (i) the number of patients who may use the drug or medical device should be less than 50,000 in Japan, (ii) the drugs or medical devices should be indicated for the treatment of serious diseases and for which there are high medical needs, and (iii) there should be a theoretical rationale for the use of the product for the target disease, and the development plan should be appropriate. For designated orphan drugs and medical devices, following measures to support the research and development activities are taken; (a) subsidy payment, (b) guidance and consultation, (c) preferential tax treatment, (d) priority review, and (e) extension of re-examination period. Accelerated Approval System In 2015, MHLW implemented the “SAKIGAKE” designation system, aiming at early practical application for innovative pharmaceutical products by providing a series of benefits in both pre-application and review stages of the approval process. In order to qualify for the SAKIGAKE designation system, the drugs in question must satisfy the following criteria; (i) the drug in question is innovative, (ii) the drug in question targets serious diseases, (iii) the drug in question has prominent effectiveness, and (iv) the applicant intends to develop and apply for approval firstly in Japan ahead of the rest of the world. Under the SAKIGAKE designation system, the following measures have been taken in order to accelerate practical application for innovative pharmaceutical products; (a) prioritized consultation, (b) pre-application consultation (i.e., de facto review before application), (c) prioritized review, (d) assignment of a review partner (i.e., PMDA manager as a concierge), and (e) extension of re-examination period. The SAKIGAKE designation has been put into the statutory form in the Pharmaceutical Act by the amendment thereof in 2019 under the name of “pioneering drugs designation system” (senkuteki iyakuhin shitei seido). International Regulation In addition to regulations in the United States, the European Union, Japan and the PRC, we will be subject to a variety of other regulations governing clinical trials and commercial sales and distribution of our products to the extent we choose to develop or sell any products outside of the United States, Europe, Japan or the PRC. The approval and reimbursement process varies from country to country and the time may be longer or shorter than that required to obtain FDA, EMA, PMDA or NMPA approval. The requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement vary greatly from country to country. In all cases the clinical trials must be conducted in accordance with cGCP requirements and the applicable regulatory requirements and the ethical principles having their origin in the Declaration of Helsinki. Anti-Corruption Laws The FCPA, the U.S. domestic bribery statute contained in 18 U.S.C. §201, the U.S. Travel Act, the USA PATRIOT Act, and possibly other state and national anti-bribery and anti-money laundering laws in countries in which we conduct activities, prohibit any U.S. individual or business from paying, offering or authorizing payment or offering of anything of value, directly or indirectly, to any foreign official, political party or candidate for the purpose of influencing any act or decision of the foreign entity in order to assist the individual or business in obtaining or retaining business. This could become relevant in the conduct of international clinical trials where the sites for such studies may be a government-owned hospital. The FCPA also obligates companies whose securities are listed in the United States to comply with accounting provisions requiring the company to maintain books and records that accurately and fairly reflect all transactions of the corporation, including international subsidiaries, and to devise and maintain an adequate system of internal accounting controls for international operations. Activities that violate the FCPA, even if they occur wholly outside the United States, can result in criminal and civil fines, imprisonment, disgorgement, oversight and debarment from government contracts. Pursuant to a February 10, 2025 Executive Order, the Trump Administration ordered a temporary pause on FCPA-related enforcement action and issuance of revised FCPA guidance and policies focused on promoting American economic competitiveness and efficient use of Federal law enforcement resources. However, this Executive Order does not directly affect the U.S. Securities and Exchange Commission’s separate civil enforcement authority under the FCPA’s accounting provisions, nor does it eliminate potential risk of future enforcement under the FCPA (the statutes of limitation for FCPA violations are five years for the anti-bribery provisions and six years for the accounting provisions). 135 Table of Contents In the European Union, interactions between pharmaceutical companies and physicians are governed by strict laws, regulations, industry self-regulation codes of conduct and physicians’ codes of professional conduct both at the European Union level and in the individual European Union member states. The provision of benefits or advantages to physicians to induce or encourage the prescription, recommendation, endorsement, purchase, supply, order or use of medicinal products is prohibited in the European Union. The provision of benefits or advantages to physicians is also governed by the national anti-bribery laws of the European Union member states. Violation of these laws could result in substantial fines and imprisonment. Payments made to physicians in certain European Union member states also must be publicly disclosed. Moreover, agreements with physicians must often be the subject of prior notification and approval by the physician’s employer, his/her regulatory professional organization, and/or the competent authorities of the individual European Union member states. These requirements are provided in the national laws, industry codes, or professional codes of conduct, applicable in the individual European Union member states. Failure to comply with these requirements could result in reputational risk, public reprimands, administrative penalties, fines or imprisonment. C.Organizational Structure The chart below sets forth our corporate structure and identifies our significant subsidiaries and their significant subsidiaries, as of the Latest Practicable Date: D.Property, Plant and Equipment Details of our facilities are provided below: ● office space of approximately 1,562 square feet in San Diego, California under a lease that will expire on June 30, 2026; ● office space of approximately 3,181 square feet in Taiwan under a lease that will expire on July 31, 2027; ● office space of approximately 12,646 square feet in Taiwan under a lease that will expire on Feb. 28, 2031 ● office space of approximately 86 square feet in Shanghai, China under a lease that is automatically renewed every three months; and ● office space of approximately 1,033 square feet in Sydney, Australia under a lease that will expire on August 14, 2028. 136 Table of Contents We believe our current facilities are sufficient to meet our near-term needs, and we do not foresee any difficulty in extending the lease terms of our facilities upon their respective expiration dates. See Note 17—Segment to our consolidated financial statements for the disclosure of our long-lived assets by geographic area.