A. History and Development of the Company We are a clinical-stage biotechnology company focused on advancing a pipeline of RNA editing therapeutics based on our proprietary Axiomer RNA-editing platform. Our lead program, AX-0810 for cholestatic diseases targeting NTCP, is currently being evaluated in a Phase 1 clinical trial in healthy volunteers. With funding from the Rett Syndrome Research Trust, we are also advancing AX-2402 targeting methyl CpG binding protein 2 mutations for Rett syndrome, a severe neurodevelopmental disorder. Additional pipeline programs include AX-2911 targeting PNPLA3 for metabolic dysfunction-associated steatohepatitis, AX-1412 targeting the B4GALT1 gene for CVDs, as well as a number of additional discovery-stage programs. In addition to our own pipeline programs, we have a partnership with Lilly, currently focused on up to 10 targets based on our Axiomer platform. Our ongoing discovery and screening efforts are yielding a portfolio of early-stage research programs that leverage the versatility of the Axiomer EON approach to identify and evaluate additional targets across multiple disease areas, and we continue to invest in the optimization of our platform. We were founded in 2012 by Daniel de Boer, Gerard Platenburg, the late Henri Termeer, and Dinko Valerio. Since September 18, 2014, our ordinary shares have been listed on Nasdaq. They are currently trading on Nasdaq Capital Market under the ticker symbol “PRQR”. As of December 31, 2025, we had raised € 518.0 million in gross proceeds from our public offerings of shares and private placements of equity securities. In addition, we have received grants, loans and other funding from patient organizations, private lenders and government institutions supporting our programs, including from FFB, RSRT and the Dutch government under the innovation credit program. 56 Table of Contents Our legal name is ProQR Therapeutics N.V. and we were incorporated in the Netherlands on February 21, 2012. We reorganized from a private company with limited liability to a public company with limited liability on September 23, 2014. Our company is registered with the Dutch Trade Register of the Chamber of Commerce (‘handelsregister van de Kamer van Koophandel’) under number 54600790. Our corporate seat is in Leiden, the Netherlands. The address of our headquarters and registered office is Zernikedreef 9, 2333 CK Leiden, the Netherlands, telephone number +31 88 166 7000. Our U.S. office is located at 245 Main Street, Cambridge, MA 02142, USA. The name and address of our agent for service in the United States is Sarah Kiely, 245 Main Street, Cambridge, MA 02142, USA. The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers like ProQR that file electronically with the SEC. The address of that website is www.sec.gov. We maintain a corporate website at www.ProQR.com. Information found on, or accessible through, our website is not incorporated by reference into and should not be considered a part of this Annual Report, and the reference to our website in this Annual Report is an inactive textual reference only. B. Business Overview We are a clinical-stage biotechnology company advancing a pipeline (Figure 1) of RNA editing therapeutics based on our proprietary Axiomer RNA-editing platform. Our lead program, AX-0810 for cholestatic diseases targeting na-taurocholate cotransporting polypeptide (“NTCP”), is currently being evaluated in a Phase 1 clinical trial in healthy volunteers. With funding from Rett Syndrome Research Trust (“RSRT”), we are also advancing AX-2402 targeting methyl CpG binding protein 2 (“MECP2”) mutations for Rett syndrome, a severe neurodevelopmental disorder. Additional pipeline programs include AX-2911 targeting PNPLA3 for metabolic dysfunction-associated steatohepatitis (“MASH”), AX-1412 targeting the B4GALT1 gene for cardiovascular diseases (“CVDs”), as well as a number of additional discovery-stage programs. Figure 1. ProQR development pipeline Our robust pipeline is strategically focused on diseases originating in the liver and central nervous system (“CNS”), where human genetics and translational research support the potential for therapeutic benefit through RNA editing. We prioritize indications with high unmet medical need and biomarkers and well-defined clinical endpoints. These programs are enabled by Axiomer, our proprietary RNA editing platform technology designed to harness endogenous adenosine deaminase acting on RNA (“ADAR”) enzymes to mediate precise, single nucleotide edits in RNA with high specificity and durability. Axiomer uses editing oligonucleotides (“EONs”) designed to recruit and direct ADARs to change an adenosine (A) to an inosine (I) in target RNA sequences where an inosine is translated as a guanosine (G). This approach can be used to correct a messenger RNA (“mRNA”) with a disease-causing mutation back to a normal (or wild type) mRNA, modulate protein expression, or alter a protein so that it will have a new function that helps prevent or treat disease. 57 Table of Contents Since discovering the Axiomer RNA editing platform technology in 2014, we have established a leading intellectual property estate in the ADAR editing space, defined core EON design principles, and optimized oligonucleotide chemistries for therapeutic use. Using our deep RNA expertise and strong IP position, we aim to optimize and advance Axiomer as a platform capable of supporting the development of RNA editing therapeutics across multiple disease areas. In addition to advancing our wholly-owned pipeline programs, we entered into a global licensing and research collaboration with Eli Lilly and Company (“Lilly”) in September 2021. Under this collaboration, our Axiomer platform is being used to progress new drug targets for disorders toward clinical development and commercialization. The collaboration initially focused on five targets and was expanded to ten targets in December 2022, with an option for further expansion to fifteen targets. We believe our Axiomer platform has significant potential to yield many additional therapeutic candidates. Thus, we continuously evaluate further opportunities for beneficial collaborations or strategic partnerships to efficiently advance product candidates with the goal of bringing medicines to patients. Our Strategy We are advancing RNA editing therapeutics based on our proprietary Axiomer platform to address serious diseases with significant unmet medical need. We prioritize targets supported by human genetics research and where RNA editing may offer advantages or enable treatment not achievable through other modalities. Key elements of our strategy include: ● Wholly-owned pipeline: We are using our Axiomer platform to develop novel therapies initially for targets related to liver- and CNS-originating diseases and we are advancing a portfolio of wholly owned programs across multiple therapeutic areas. This includes programs targeting NTCP for cholestatic diseases, MECP2 for Rett syndrome, PNPLA3 for MASH, and B4GALT1 for CVD. We intend to retain development and commercialization rights for programs and indications where we believe we can create long-term value independently. In parallel, we continue to identify and advance additional genetically informed targets through our discovery efforts to support long-term growth and the continued expansion of our pipeline. ● Axiomer platform innovation: We continue to invest in the optimization of Axiomer, including advances in oligonucleotide design, chemistry, delivery, and data-driven discovery and target identification capabilities, which we believe is critical to maintaining leadership in RNA editing and supports the efficient generation and advancement of product candidates. ● Partnerships: We seek to maximize the value of the Axiomer platform by selectively pursuing licensing, partnering, and other strategic relationships, such as our collaborations with Lilly, and RSRT. Given the broad therapeutic potential of Axiomer across multiple targets and disease areas, we believe strategic partnerships enable us to advance a greater number of opportunities than we could independently pursue. For programs or indications – particularly larger or more prevalent markets – where partnering may enhance capabilities, we intend to continue to selectively pursue strategic collaborations. Our Novel Axiomer RNA Editing Technology Platform Our Axiomer RNA editing technology is based on a class of antisense oligonucleotides (“AONs”) that we refer to as EONs. EONs are short, synthetic nucleic acid sequences designed to bind through base pairing to a complementary region of a target RNA transcript. Upon binding, EONs are intended to recruit endogenous, naturally occurring ADAR enzymes to the target site, as illustrated in Figure 2. ADAR enzymes catalyze the deamination of adenosine to inosine within double-stranded RNA structures, and the Axiomer platform is designed to harness this native cellular process in a controlled and site-specific manner. 58 Table of Contents Through precise EON design, our Axiomer platform is intended to enable single adenosine-to-inosine (“A-to-I”) edits at predefined positions within an RNA transcript, as shown in Figure 2. Because inosine is interpreted as guanosine by the cellular translation machinery, an A-to-I edit can result in a targeted amino acid substitution in the encoded protein, or alternatively may affect RNA splicing, stability, or translation efficiency depending on the location of the edit. By selecting the RNA target site and edit position, our platform is designed to support multiple therapeutic strategies, including correction of disease-associated variants, modulation of protein expression levels, or alteration of protein function. Figure 2: (left) RNA editing is a naturally occurring process whereby ADARs perform A to I editing. (right) ProQR’s Axiomer RNA editing technology platform uses EONs to recruit and direct endogenously expressed ADARs to edit an A to an I in the RNA, which is then translated as a G, allowing highly specific editing. The Axiomer approach is designed to operate exclusively at the RNA level and does not alter the underlying DNA sequence, thereby avoiding permanent genetic modifications. As a result, any edits introduced by EONs are transient and reversible, as edited RNA molecules are naturally degraded and replaced over time through normal cellular processes. In addition, because Axiomer leverages endogenous ADAR enzymes rather than introducing exogenous editing proteins, the platform may offer flexibility in dosing and treatment duration. The modular nature of EON design also allows the platform to be adapted to different RNA targets and disease contexts by modifying the oligonucleotide sequence, while relying on a common underlying editing mechanism. Our EONs have the potential to act through multiple different therapeutic mechanisms: ● Correct. Axiomer is designed to enable the correction of certain disease-causing mutations at the RNA level, with the goal of restoring the production of functional protein without altering the underlying DNA sequence. ● Modulate. Axiomer is also designed to allow modulation of protein activity by introducing defined RNA edits that can alter protein function, as well as by increasing or decreasing the expression of selected proteins through edits that influence how much protein is produced. ● Protect. In addition, the Axiomer platform is intended to enable the introduction of protective or functionally beneficial protein changes that may help reduce disease risk or slow disease progression. With these capabilities, we believe Axiomer is differentiated from other RNA interference therapeutics such as siRNA that are primarily focused on reducing gene expression and has the potential to address a broad set of genetic and non- 59 Table of Contents genetic diseases. Across a range of targets, we have demonstrated in vitro and in vivo platform proof-of-concept for our Axiomer RNA editing technology platform, in cell models, organoids, and animal models, including relevant higher order species. Our first Axiomer-based program, AX0810 for cholestatic diseases, is currently being evaluated in a Phase 1 clinical trial in healthy volunteers. Our Pipeline Programs AX-0810 for Cholestatic Diseases targeting NTCP Cholestatic diseases overview Cholestatic diseases are caused by a toxic buildup of bile acids in the liver due to bile duct dysfunction, which causes liver cell damage. The consequences of these disorders can be devastating and significantly impact a person's quality of life, including pruritus, dry skin, fatigue, pain, weight loss, and many others. Without treatment, the damage progresses through various stages, from fibrosis to cirrhosis, ultimately leading to liver failure and an increased risk of liver cancer. Liver transplants are often necessary for primary sclerosing cholangitis (“PSC”) and biliary atresia (“BA”), two forms of cholestatic diseases with high unmet medical needs. PSC is a rare, chronic, and progressive cholestatic liver disease that typically presents between ages 30 and 40 and disproportionately affects men. It is estimated that 80,000 people in North America and Europe have PSC, with a prevalence of 1 to 9 individuals per 100,000. The disease is characterized by persistent inflammation, fibrosis, and structuring of the bile ducts, resulting in impaired bile flow and toxic accumulation of bile acids in the liver. PSC frequently progresses to end-stage liver disease, cirrhosis, liver failure, and the need for transplantation. Patients are also at markedly increased risk for cholangiocarcinoma and other hepatobiliary malignancies. There are currently no approved disease-modifying therapies, underscoring the substantial unmet medical need and significant clinical burden. BA is a rare, pediatric condition that affects newborns, resulting from the absence or defect of bile ducts leading to obstructed bile flow. It is estimated that 20,000 individuals in North America and Europe have BA, with a prevalence of 1 in 10,000 to 15,000 births in the western world. The obstruction of bile flow leads to rapid accumulation of toxic bile acids in the liver, triggering aggressive inflammation and fibrosis that can progress to cirrhosis within the first years of life. BA is the leading indication for pediatric liver transplantation worldwide. Despite surgical intervention (Kasai portoenterostomy), many patients ultimately require liver transplantation, and long-term morbidity remains high. The early onset, rapid progression, and life-threatening nature of BA highlight the urgent need for effective therapeutic options. Limitations of the Current Treatment Landscape Currently, there are no drugs approved by the U.S. Food and Drug Administration (“FDA”) or European Commission (“EC”) specifically indicated for the treatment of PSC and BA. For patients with advanced PSC, liver transplantation is the only treatment option with evidence to extend survival. However, disease recurrence has been reported in 20 to 40% of patients who undergo liver transplantation, and the median survival without a transplant is only 21 years. For BA, surgical portoenterostomy (Kasai procedure) in the first weeks of life is the gold standard initial treatment. However, most patients who receive this surgery will ultimately progress to end-stage liver disease and still require a liver transplant early in life. NTCP: A Genetically Validated Target at the Center of Cholestatic Liver Disease NTCP (sodium taurocholate co-transporting polypeptide) is the primary transporter responsible for hepatic uptake of circulating bile acids. In cholestatic liver diseases, toxic accumulation of bile acids within hepatocytes drives inflammation, progressive fibrosis, cirrhosis, and ultimately liver failure. Targeting NTCP directly addresses this central pathogenic mechanism by reducing intracellular bile acid burden at its point of entry into the liver. Human genetics provide compelling validation for this approach. Naturally occurring NTCP variants that reduce hepatic bile acid uptake are associated with elevated serum bile acids but an absence of clinically meaningful cholestatic disease, supporting NTCP modulation as a well-tolerated and mechanistically grounded strategy. This genetic evidence significantly de-risks the target and supports a favorable therapeutic window. 60 Table of Contents AX-0810: Precision RNA Editing to Replicate a Protective Human Variant AX-0810 is an Axiomer-based EON designed to edit the NTCP transcript and replicate a naturally occurring human variant associated with reduced hepatic bile acid uptake. Rather than broadly inhibiting NTCP function, AX-0810 is designed to physiologically modulate only the bile acid transport function of NTCP by mimicking a protective genetic phenotype. By reducing bile acid accumulation in hepatocytes, AX-0810 aims to address the core biological driver of cholestatic disease progression—reducing liver injury, inflammation, and fibrotic remodeling. This positions AX-0810 as a potential first-in-class, disease-modifying therapy for severe cholestatic liver diseases, including conditions with no approved disease-modifying options. AX-0810 represents a strategic application of ProQR’s Axiomer RNA editing platform to a genetically validated liver target, using precision RNA editing to recapitulate a naturally occurring protective genetic variant. Preclinical studies in multiple species, including humanized mouse models and non-human primates as shown in Figure 3, demonstrated that EON-mediated editing of NTCP resulted in reduced bile acid uptake and favorable changes in biomarkers associated with cholestatic diseases, supporting advancement of AX-0810 into clinical development. Figure 3. EON-mediated editing exhibits consistent editing of NTCP and favorable impact on biomarkers in vivo. AX-0810 is currently being evaluated in a first-in-human Phase 1 trial in healthy volunteers, as shown in Figure 4. The placebo-controlled study is designed to evaluate safety, tolerability, and pharmacokinetics, as well as biomarkers of NTCP target engagement, including plasma bile acid levels, bile acid composition, and a bile acid challenge using Tauro-urso deoxycholic acid (“TUDCA”). 61 Table of Contents Figure 4. Schematic of first-in-human Phase 1 trial of AX-0810 The study is a randomized, placebo-controlled, multiple ascending dose trial conducted in healthy volunteers. Participants are enrolled across sequential dose cohorts, with individuals within each cohort receiving AX-0810 or placebo. Dosing is administered subcutaneously, with safety reviews conducted prior to dose escalation. Participants are followed for safety and pharmacokinetic assessments for 12 weeks following dosing. Subject to additional regulatory authorization, the study design also provides for the inclusion of a patient cohort following the healthy volunteers portion of the trial. The trial is intended to generate early human data to inform dose selection and support subsequent clinical development in patients with cholestatic diseases. Based on its mechanism of action, AX-0810 is intended to reduce bile acid-mediated hepatic stress and downstream inflammatory and fibrotic processes, with the goal of addressing symptoms and potentially delaying disease progression in patients with cholestatic diseases. Based on preliminary review of safety and pharmacokinetic data from initial participants in the first cohort of healthy volunteers receiving AX-0810 (3 mg/kg), reported in January 2026, no serious adverse events or clinically meaningful laboratory abnormalities have been observed. Preliminary pharmacokinetic data observed in these participants were generally consistent with non-clinical findings and support continued dosing in accordance with the study protocol. We expect to report data related to biomarkers of NTCP target engagement from the healthy volunteer cohorts in the first half of 2026. In parallel, we are conducting preparatory activities to include a patient cohort in this Phase 1 trial following completion of the healthy volunteer portion of the study, subject to regulatory authorization. AX-2402 for Rett Syndrome targeting MECP2 Rett Syndrome overview Rett Syndrome is a rare and severe neurodevelopmental disorder, affecting approximately 350,000 people worldwide, predominantly girls. Rett Syndrome is characterized by apparently normal psychomotor development during the first six to 18 months after birth, followed by a period of developmental stagnation, then a regression in language and motor skills, after which patients typically experience long-term relative stability. During the regression phase, affected individuals develop repetitive, stereotypic hand movements that replace purposeful hand use. Additional manifestations include gait ataxia and apraxia, seizures, tremors, episodic apnea and/or hyperpnea, gastrointestinal complications, scoliosis and other musculoskeletal abnormalities, anxiety, sleep disturbances, and bruxism. 62 Table of Contents Mutations in the MECP2 gene are the primary cause of Rett syndrome. Located on the X chromosome, MECP2 encodes the methyl-CpG-binding protein 2, which plays a critical role in regulating gene expression and maintaining normal brain development and function. Mutations in MECP2 disrupt this function, leading to widespread abnormalities in neuronal signaling and brain function. The monogenic nature of Rett syndrome provides a clear and well-characterized genetic driver of disease, supporting the development of targeted therapeutic strategies. Limitations of the Current Treatment Landscape Currently, no approved therapies have been shown to modify the underlying genetic cause of Rett syndrome. Management of the diseases remains largely supportive and multidisciplinary, including physical therapy, occupational therapy, speech therapy, nutrition management, and medications used to address specific symptoms such as seizures, breathing irregularities, and gastrointestinal issues. While Daybue®(trofinetide) has been approved in the United States for the treatment of Rett syndrome, it is not designed to address the underlying genetic drivers of the disease and supportive care remains a central component of disease management. The treatment landscape has evolved with a number of targeted therapies, including our RNA editing approach. AX-2402 for Rett Syndrome targeting MECP2 AX-2402 is being developed for individuals with Rett syndrome who have the R270X mutation in the MECP2 gene, and is based on our proprietary Axiomer RNA editing platform. The AX-2402 program utilizes EONs designed to correct the R270X nonsense mutation, with the goal of restoring functional MECP2 expression. We believe Axiomer EONs can be applied to target additional MECP2 mutations beyond R270X that collectively impact a large segment of the Rett population. Non-clinical proof-of-concept data have been generated in a mouse model of Rett syndrome harboring the MECP2 R270X mutation. In this model, treatment with AX-2402 was associated with improvements in functional assessments commonly used to evaluate disease severity, including composite behavioral scores and measures of motor impairment, such as hindlimb clasping, as shown in Figure 5. These findings support the potential of AX-2402 to address neurological dysfunction associated with MECP2 deficiency and further support its continued development. Figure 5. AX-2402 reverses disease in a severe Rett mouse model as shown with hindlimb clasping score and composite Bird score 63 Table of Contents A development candidate for AX-2402 was announced in early 2026, which is advancing to development activities with the objective of initiating a first-in-human clinical trial in the first half of 2027, subject to regulatory authorization. AX-2402 is supported in part through a research collaboration with RSRT. In December 2024, we expanded this collaboration, building on the initial $ 1.0 million research grant announced in January 2024. The expanded partnership includes an additional $ 8.2 million in funding from RSRT, for a total of $ 9.2 million, supporting the advancement of AX-2402. AX-2911 for Metabolic Dysfunction-Associated Steatohepatitis targeting PNPLA3 MASH overview MASH is a progressive and increasingly prevalent chronic liver disease driven by underlying metabolic dysfunction, including obesity, insulin resistance, type 2 diabetes, dyslipidemia, and other components of metabolic syndrome. MASH represents the inflammatory and fibrotic form of metabolic dysfunction–associated steatotic liver disease (“MASLD”) and is estimated to affect approximately 5% of the global adult population, representing well over 150 million individuals worldwide. The disease is characterized by excessive hepatic fat accumulation (steatosis), which triggers hepatocellular stress, inflammation, and progressive fibrotic remodeling. Over time, MASH can advance to advanced fibrosis, cirrhosis, liver failure, and hepatocellular carcinoma, and is emerging as a leading cause of liver-related morbidity, mortality, and liver transplantation globally. Current Treatment Landscape and Limitations Pharmacologic treatment options for MASH have recently begun to emerge. In the United States, resmetirom, a liver-directed thyroid hormone receptor-β agonist, and semaglutide, a glucagon-like peptide-1 receptor agonist, have been approved for the treatment of adults with noncirrhotic MASH with moderate to advanced fibrosis. Despite recent approvals, current MASH therapies act through systemic metabolic mechanisms and do not directly address key genetic drivers of disease such as the PNPLA3 I148M variant. Consequently, a significant subset of patients may continue to carry residual risk of disease progression and fibrosis even with treatment. A PNPLA3-targeted therapy represents a precision approach to potentially unlock incremental efficacy in this genetically defined population and meaningfully expand the therapeutic value beyond existing agents. AX-2911 for MASH targeting PNPLA3 AX-2911 is an Axiomer RNA editing oligonucleotide designed to target the PNPLA3 (patatin-like phospholipase domain containing 3) I148M variant, a well-established genetic risk factor for metabolic liver disease, including MASH. Approximately 8 million individuals in the United States and European Union are homozygous for the 148M variant. AX-2911 is designed to edit the PNPLA3 transcript at the RNA level with the goal of restoring wild-type-like protein function and addressing a key genetic driver of disease. Non-clinical functional proof-of-concept data have been generated for AX-2911, as shown in Figure 6. 64 Table of Contents Figure 6. Non-clinical functional proof-of-concept data for AX-2911 in a humanized PNPLA3 I148M mouse model of hepatic steatosis In a humanized mouse model expressing the PNPLA3 I148M variant and fed a Western diet, treatment with AX-2911 was associated with substantially reduced hepatic fat content, as assessed by macroscopic and histologic measures of steatosis. In the same experimental setting, AX-2911 demonstrated a greater reduction of hepatic fat compared to a PNPLA3-directed antisense oligonucleotide evaluated as a reference therapy. These findings support the potential of AX-2911 to address lipid accumulation associated with PNPLA3-mediated MASH and further support its continued development. A development candidate for AX-2911 was announced in early 2026. Our Earlier-Stage and Discovery Programs In addition to our more advanced pipeline programs, we are pursuing a number of earlier-stage and discovery-stage research programs based on the Axiomer RNA editing platform. These efforts are focused on identifying and prioritizing new therapeutic targets through a combination of human genetics, disease biology, and platform-driven screening approaches. We use internal discovery and screening activities to evaluate target editability, functional relevance, and translational potential, with the objective of efficiently generating and advancing new RNA editing candidates. These programs are at varying stages of preclinical evaluation and are intended to explore additional therapeutic opportunities and inform future pipeline development and partnering decisions. AX-1412 is an Axiomer-based RNA editing program targeting B4GALT1, a gene implicated through human genetic studies in cardiovascular disease risk. Certain naturally occurring B4GALT1 variants have been associated with reduced levels of LDL cholesterol and fibrinogen, supporting the rationale for exploring B4GALT1 modulation as a potential therapeutic approach. AX-1412 remains in early preclinical development, and we continue to evaluate its potential within our broader pipeline and partnership strategy. We also maintain a broader portfolio of early-stage research programs that leverage the versatility of the Axiomer EON approach to identify and evaluate additional targets across multiple disease areas identified through our ongoing discovery and screening efforts. 65 Table of Contents Our Partnerships Our core focus is to develop and ultimately commercialize a broad pipeline of RNA therapies leveraging our proprietary Axiomer RNA editing platform. The breadth of therapeutic opportunities enabled by Axiomer extends across a wide range of genetically defined diseases across multiple therapeutic areas. While we prioritize and advance certain wholly owned programs internally, we selectively enter into collaboration and licensing agreements to expand the reach of the platform, access complementary capabilities, secure non-dilutive funding to accelerate development, and advance additional opportunities beyond those we can efficiently pursue on our own. We expect strategic partnerships to remain an important component of our model as we seek to maximize the value and impact of Axiomer across a diverse set of indications. Eli Lilly and Company A global licensing and research collaboration with Lilly focuses on the discovery, development, and commercialization of potential new medicines for genetic disorders using our Axiomer RNA editing technology with a focus on CNS and peripheral nervous system (“PNS”). The partnership, formed in 2021, initially focused on up to five targets. In December 2022, the partnership was expanded to up to ten targets, with an option for an additional five targets. Under the terms of the agreements, we received $ 125.0 million upfront from Lilly and would be paid an additional $ 50.0 million if Lilly exercises the option for five additional targets. We are also eligible to receive up to approximately $ 3.75 billion in milestones, as well as royalties on potential product sales. Rett Syndrome Research Trust In January 2024, we initiated our partnership with RSRT through a $ 1.0 million research grant to support development of an Axiomer RNA editing program targeting MECP2 for Rett syndrome. In December 2024, we announced a significant expansion of this partnership, with RSRT committing an additional $ 8.2 million in funding, bringing total support to $ 9.2 million. The funding will support the advancement of AX-2402 targeting MECP2 for Rett Syndrome into clinical trials. Legacy Ophthalmology Assets In August 2022, we made the decision to exclusively focus our strategy on the advancement of our Axiomer RNA editing technology and to partner our ophthalmology programs. In December 2023, we announced that we had completed a transaction divesting the late stage ophthalmic assets, sepofarsen and ultevursen, to Théa who will continue the development of these therapies for patients with LCA10 and Usher Syndrome respectively. Under the terms of the agreement, ProQR received an initial payment of € 8.0 million and may be eligible for up to € 165.0 million in further development, regulatory, and commercial earn-out payments upon related achieved milestones, as well as double-digit royalties based on commercial sales in the U.S. and EU. In December 2024, Sepul Bio, a business unit of Théa, announced the first clinical participant was dosed in LUNA, a Phase 2b clinical study of ultevursen for Usher Syndrome (Type 2a gene). In October 2025, Sepul Bio announced the first clinical participant was dosed in HYPERION, a Phase 3 clinical study of sepofarsen for treatment of CEP290- associated Leber Congenital Amaurosis Type 10 (LCA10). 66 Table of Contents Competition The pharmaceutical industry is highly competitive and subject to rapid and significant technological change. Our potential competitors include large pharmaceutical, biotechnology, specialty pharmaceutical, and generic drug companies, academic institutions, government agencies and research institutions. Key competitive factors affecting the commercial success of our product candidates are likely to be efficacy, safety and tolerability profile, delivery, reliability, convenience of dosing, patient recruitment for clinical studies, price and reimbursement. Many of our existing or potential competitors have substantially greater financial, technical, and human resources than we do and significantly greater experience in the discovery and development of product candidates, obtaining FDA, EMA and other regulatory approvals of products and the commercialization of those products. Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a small number of our competitors. Accordingly, our competitors may be more successful than we may be in obtaining FDA or EMA approval for therapies and achieving widespread market acceptance. Our competitors’ products may be more effective, or more effectively marketed and sold, than any product we may commercialize and may render our therapies obsolete or non-competitive before we can recover development and commercialization expenses. Our competitors are working on similar technologies in the field of RNA editing, but also in the field of gene editing and gene therapy as well as other types of therapies, such as small molecules, protein replacement or antibodies. Human Capital Resources We believe in passion and commitment and have built a strong team of ProQRians from all walks of life and over 28 different nationalities, who are up to the challenge and committed to make a difference for the patients we serve. We actively create a caring atmosphere, in which we love to work and maintain productive and happy lives. At ProQR, we foster empowerment, self-development, creativity, and a sense of community. As an employer, we are a true believer in the value of a workforce in which people from all backgrounds are encouraged to develop themselves both personally and professionally. This is reflected in our leadership team and broader workforce. We believe that happy and energized people, working well together in an environment in which they thrive, will do phenomenal and awesome things. We are committed to ensure that no employee, candidate, or job applicant receives less favorable treatment on the grounds of race, age, disability, pregnancy, religion, gender identity and expression, sexual orientation, marriage or civil partnership status. At ProQR, we want to create an inclusive culture where everyone can be valued for who they are and in which individual differences and the contributions in all forms are recognized and valued. Animal Welfare It is required by regulatory authorities to demonstrate the safety and, if possible, efficacy of a new drug in animals before it can be tested in humans. The welfare of animals in our preclinical studies is of great importance to us for reasons of ethics, quality, reliability, and applicability of scientific studies. To assure high quality research, animal welfare is essential. By actively pursuing the 3R principles (Reduce, Refine and Replace), ProQR is committed to reduce the number of animals needed, minimize discomfort and pain of animals used, and use alternatives to animal research whenever possible. Animal experiments will be performed only if there are no alternatives such as performing in silico, in vitro or ex vivo studies. Study designs will be evaluated with the aim to identify opportunities to reduce the number of animals needed to achieve the objectives of the study. By conducting small pilot studies and by using innovative new technologies and modeling approaches, we further pursues the ambition to reduce, refine and replace animal studies. Approval by institutional or national animal care and use committees is required prior the execution of in vivo studies. 67 Table of Contents External collaborators contracted for the execution of our in vivo preclinical studies, also known as CROs, are selected based on their expertise, quality and accreditations for laboratory animal care and welfare. CRO facilities are audited by us prior to contracting to ensure that the housing, husbandry and welfare of animals complies with the highest international standards. Personnel responsible for housing, husbandry and the care of animals must have received adequate and relevant documented education. Manufacturing and Supply We do not own or operate GMP manufacturing facilities to produce clinical or commercial drug product. Historically manufacture of drug substance and drug product for clinical use was outsourced to approved vendors under service agreements. Manufacture of small scale non-GMP drug substance and drug product batches to support the discovery and initial preclinical phase of the Axiomer platform are manufactured in our in-house laboratories and at approved vendors under phase-appropriate service agreements. As the portfolio progressed and progresses to clinical stage development, larger scale batches and those intended for clinical use will be manufactured at approved vendors under phase-appropriate service agreements. Our vendor management strategy will ensure that we have sufficient capacity to meet the demands of the portfolio now and in the future. The contract manufacturing organizations selected to manufacture our product candidates under cGMP conditions are assessed and audited to ensure that they meet the extensive regulations in areas including technical expertise, facility and equipment management, documentation, data integrity, manufacturing processes and controls, personnel, quality control and quality assurance. Intellectual Property We strive to protect our technology platform and our product candidates through a variety of approaches, including obtaining and maintaining patent and trade secret protection for our current and future technology platforms, our product candidates as well as their methods of use and processes for their manufacture, and any other inventions or discoveries that are commercially important to our business. We seek to obtain domestic and international patent protection and endeavor to promptly file patent applications or in-license patent rights relating to new, commercially valuable inventions to expand our intellectual property portfolio. Our commercial success will depend in part upon obtaining and maintaining patent and trade secret protection for our current and future technology platforms and product candidates, as well as successfully defending our patent rights against third-party challenges. Our ability to prevent or stop third parties from making, using, selling, offering to sell or importing our product candidates will depend in part upon whether we have valid and enforceable patent rights that cover the activities of third parties. We cannot be sure that patents will be granted with respect to any of our own or our in-licensed pending patent applications or with respect to any patents applications we may own or in-license in the future, nor can we be sure that any of our own or in-licensed patents or any patents we may own or license in the future will be useful in protecting our technology. Please see “Risk Factors—Risks Related to Our Intellectual Property” for additional information on the risks associated with our intellectual property strategy and portfolio. Patent Rights We have been building and will continue to build our patent portfolio. Where possible, we pursue or plan to pursue multi-tiered patent protection for our technology platforms and our product candidates as well as their manufacture, formulation and use. In addition to the United States, we file, and plan to file, patent applications in various countries and regions where we think such filings are likely to be cost effective. 68 Table of Contents The term of individual patents depends upon the legal term of the patents in the countries in which they are obtained. In most countries in which we file or plan to file, the patent term is 20 years from the earliest date of filing of a non-provisional patent application. In the United States, a patent’s term may be lengthened by patent term adjustment, which compensates a patentee for administrative delays by the U.S. PTO in granting a patent. However, the term of a United States patent may be shortened if a patent is terminally disclaimed by its owner over another patent. In addition, depending upon the circumstances, certain United States patents may be eligible for a patent term extension which compensates a patentee for delays in granting marketing approval for a patented active ingredient or use of an active ingredient. In Europe, a similar mechanism is available, such that patents may be eligible for a supplementary protection certificate to compensate for the time lost in obtaining marketing authorization for the active ingredient. Patent Rights Relating to Our Axiomer Program ProQR’s Axiomer RNA editing technology platform uses EONs to recruit and direct endogenously expressed ADARs to edit an A to an I in the RNA, which is then translated as a G, allowing highly specific editing. Since 2014, when the first inventions were conceived at ProQR, we have been filing patent applications for intellectual property rights related to our Axiomer platform. Many of these claim EONs with specific features that allow them to guide recruitment of endogenous ADAR for the purpose of therapeutic RNA editing, without the need of ADAR overexpression or artificial ADAR recruitment systems. Further to that, we have grown a strong intellectual property position for EONs that can bring about RNA editing in RNA to yield a gain-of-function alteration or a loss-of-function alteration in a wide variety of therapeutic areas. We rely, and continue to rely, on intellectual property rights that are fully owned by us, or that have been co-filed with our research collaborators. With regard to our Axiomer program, we filed the following international patent applications from 2015 to 2025, several of which were continued in national and regional patent applications after the respective international phases. PCT/EP2015/080347 – Granted in Australia (AU 2022201266), Brazil (BR 112017011510-7), Canada (CA 2,968,336), China (ZL 201580069286.1), Europe (EP 3234134 B1; revoked), Israel (IL 252386), India (IN 452659), Japan (JP 6718872), New Zealand (NZ 732182), South Africa (ZA 2017/03464) and the U.S. (US 10,676,737; US 11,781,134). Pending in Europe (divisional application) and the U.S. (continuation application). The term of any patents resulting from these applications would be expected to extend to at least 2035. PCT/EP2017/065467 – Granted in Australia (AU 2017281497), Israel (IL 263332), Japan (JP 7074345), South Korea (KR 10-2418185), New Zealand (NZ 749989) and the U.S. (US 10,988,763; US 11,649,454; US 12,018,257; US 12,545,911). Allowed in Canada Pending in China, and Europe. The term of any patents resulting from these applications would be expected to extend to at least between 2037. PCT/EP2017/071912 – Granted in China (CN 110352244 B), Europe (EP 3507366 B1; opposition/appeal), Israel (IL 264923), India (IN 570690), Japan (JP 2019-511856), New Zealand (NZ 751483), South Korea (KR 10-2501980), South Africa (ZA 2019/01016) and the U.S. (US 10,941,402; US 11,851,656; US 12,203,072). Allowed in Australia (pending opposition) and Canada. Pending in the U.S. (continuation application). The term of any patents resulting from these applications would be expected to extend to at least between 2037. PCT/EP2018/051202 – Granted in the U.S. (US 11,274,300). Pending in Europe. The term of a patent resulting from this application would be expected to extend to at least between 2038. PCT/EP2019/062163 – Granted in Australia (AU 2019269022) and the U.S. (US 12,275,937). Pending in Canada, Europe, New Zealand, and the U.S. (continuation application). The term of any patents resulting from these applications, if issued, would be expected to extend to at least 2039. PCT/EP2020/051931 – Granted in the U.S. (US 12,398,393). Pending in Australia, Europe, and New Zealand. The term of any patents resulting from these applications, if issued, would be expected to extend to at least 2040. PCT/EP2020/053283 – Pending in Europe and the U.S. The term of any patents resulting from these applications, if issued, would be expected to extend to at least 2040. 69 Table of Contents PCT/EP2020/059369 – Granted in Japan (JP 7698881). Pending in Australia, Canada, China, Europe, Israel, New Zealand, and the U.S. The term of any patents resulting from these applications, if issued, would be expected to extend to at least 2040. PCT/EP2020/060291 – Pending in Australia, Canada, Europe, Israel, New Zealand, and the U.S. The term of any patents resulting from these applications, if issued, would be expected to extend to at least 2040. PCT/US2020/037580 – Granted in China (ZL 202080042924.1) and South Africa (ZA 2021/09497). Pending in Australia, Canada, Europe, Israel, India, Japan, New Zealand, and the U.S. We filed this application together with The Regents of the University of California as a co-applicant. In the Axiomer program we are working together with Dr. Peter Beal of the University of California, Davis, CA, USA. The term of any patents resulting from these applications, if issued, would be expected to extend to at least 2040. PCT/EP2020/087767 – Granted in Japan (JP 7765837). Pending in Australia, Canada, Europe, and the U.S. The term of any patents resulting from these applications, if issued, would be expected to extend to at least 2040. PCT/EP2021/070535 – Pending in Australia, Canada, Europe, Japan, and the U.S. The term of any patents resulting from these applications, if issued, would be expected to extend to at least 2041. PCT/EP2023/053503 – Pending in Europe and the U.S. The term of any patents resulting from this application, if issued, would be expected to extend to at least 2043. PCT/EP2023/069612 – Pending in Australia, Canada, Europe, Japan, New Zealand, and the U.S. We filed this application together with The Regents of the University of California as a co-applicant. In the Axiomer program we are working together with Dr. Peter Beal of the University of California, Davis, CA, USA. The term of any patents resulting from this application, if issued, would be expected to extend to at least 2043. PCT/EP2023/069609 – Pending in Europe and the U.S. We filed this application together with The Regents of the University of California but all rights have been assigned to us. The term of any patents resulting from this application, if issued, would be expected to extend to at least 2043. PCT/EP2023/079290 – Pending in Europe and the U.S. The term of any patents resulting from this application, if issued, would be expected to extend to at least 2043. PCT/EP2023/082797 – Pending in Argentina, Australia, Brazil, Canada, China, Europe, India, Japan, South-Korea, Mexico, Saudi-Arabia, Taiwan, and the U.S. The term of any patents resulting from this application, if issued, would be expected to extend to at least 2043. PCT/EP2023/084865 – Pending in Australia, Brazil, Canada, China, Europe, Japan, South-Korea, Mexico, New Zealand, and the U.S. The term of any patents resulting from this application, if issued, would be expected to extend to at least 2043. PCT/EP2023/083678 – Pending in China, Japan, South-Korea, and the U.S. The term of any patents resulting from this application, if issued, would be expected to extend to at least 2043. PCT/EP2024/051278 – Pending in Australia, Canada, China, Europe, Japan, South-Korea, New Zealand, and the U.S. We filed this application together with the Freie Universität Berlin (FUB) as a co-applicant. In the Axiomer program we are working together with Dr. Alexander Weng of the FUB. The term of any patents resulting from this application, if issued, would be expected to extend to at least 2044. PCT/EP2024/054190 – Pending in Europe and the U.S. The term of any patents resulting from this application, if issued, would be expected to extend to at least 2044. PCT/US2024/021210 – Pending in Argentina, Canada, China, Europe, Japan, Taiwan, and the U.S. We filed this application together with Eli Lilly & Company as co-applicant, with whom we are working together under the Lilly 70 Table of Contents licensing and research collaboration agreement, as amended in 2022. The term of any patents resulting from this application, if issued, would be expected to extend to at least 2044. PCT/EP2024/057800 – Pending in Australia, Canada, Europe, New Zealand, and the U.S. The term of any patents resulting from this application, if issued, would be expected to extend to at least 2044. PCT/EP2024/058159 – Pending in Australia, Brazil, Canada, China, Europe, Japan, South-Korea, Mexico, New Zealand, and the U.S. The term of any patents resulting from this application, if issued, would be expected to extend to at least 2044. PCT/EP2024/066520 – Pending in Argentina, Canada, China, Europe, Japan, Taiwan, and the U.S. The term of any patents resulting from this application, if issued, would be expected to extend to at least 2044. PCT/EP2024/074974 – PCT pending. The term of any patents resulting from this application, if issued, would be expected to extend to at least 2044. PCT/EP2024/082482 – PCT pending. The term of any patents resulting from this application, if issued, would be expected to extend to at least 2044. PCT/EP2024/087289 – PCT pending. The term of any patents resulting from this application, if issued, would be expected to extend to at least 2044. PCT/EP2025/012183 – PCT pending. Co-pending in (non-PCT states) Argentina, Lebanon, Pakistan, and Taiwan. We filed this application together with Eli Lilly & Company as co-applicant, with whom we are working together under the Lilly licensing and research collaboration agreement, as amended in 2022. The term of any patents resulting from this application, if issued, would be expected to extend to at least 2045. PCT/EP2025/058808 – PCT pending. The term of any patents resulting from this application, if issued, would be expected to extend to at least 2045. PCT/EP2025/061190 – PCT pending. The term of any patents resulting from this application, if issued, would be expected to extend to at least 2045. PCT/EP2025/059832 – PCT pending. The term of any patents resulting from this application, if issued, would be expected to extend to at least 2045. PCT/EP2025/069685 - PCT pending. The term of any patents resulting from this application, if issued, would be expected to extend to at least 2045. PCT/EP2025/070967 - PCT pending. The term of any patents resulting from this application, if issued, would be expected to extend to at least 2045. Patent Rights Relating to Our Trident Program With regard to our TRIDENT program, we filed an international patent application (PCT/US2019/024282) in 2019 directed to AONs that are applicable for nucleotide-specific pseudouridylation. A patent was granted in Israel (IL 277472), Japan (JP 7478923), South Africa (ZA 2020/05217), the U.S. (US 11,866,702), Australia (AU 2019243946), China (CN 112020557 B1), and in Europe (EP 3775210 B1). Applications are currently pending in Canada, India, New Zealand, and the U.S. (continuation application). In the TRIDENT program we are working together with Prof. Yi-Tao Yu at the University of Rochester, NY, USA. The term of any patents resulting from these applications would be expected to extend to at least 2039. In addition, two of our employees contributed to an invention with an application number PCT/US2024/025581 – pending, with the University of Rochester as applicant. 71 Table of Contents Trade Secrets In addition to patent protection, we rely on trade secrets and know-how to develop and maintain our competitive position. Trade secrets and know-how can be difficult to protect. Nevertheless, we seek to protect our trade secrets and know-how via, among other things, confidentiality and invention assignment agreements with our employees and consultants. We also seek to preserve the confidentiality of our trade secrets and know-how by implementing and maintaining security of our premises and information and limiting access to our trade secrets and know-how. License Agreements In February 2019, we entered into an agreement with the University of Rochester, New York, which gives us a world-wide, exclusive, royalty-bearing, sublicensable license in the field of AONs for use in nucleotide specific RNA editing through pseudouridylation, under certain patent rights of University of Rochester. This license agreement contains certain diligence obligations for the Company coupled to milestone payments and complements the Company’s intellectual property relating to the Trident program. The royalties payable under this license agreement are in the low single digits. Regulatory Matters Government Regulation and Product Approval Government authorities in the United States at the federal, state and local level, and in other countries, extensively regulate, among other things, the research, development, testing, manufacture, quality control, approval, labeling, packaging, storage, record-keeping, promotion, advertising, distribution, marketing, export and import of products such as those we are developing. U.S. Drug Development Process In the United States, the FDA regulates drugs under the Federal Food, Drug, and Cosmetic Act (“FDCA”), and its implementing regulations and other federal, state and local statutes and regulations. The process of obtaining regulatory approvals and compliance with appropriate federal, state, local and foreign statutes and regulations require the expenditure of substantial time and financial resources. Failure to comply with the applicable U.S. requirements at any time during the product development process, approval process, or after approval, may subject an applicant to administrative or judicial sanctions. These sanctions could include the FDA’s refusal to approve pending applications, withdrawal of an approval, a clinical hold, untitled or warning letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement or civil or criminal penalties. The process required by the FDA before a drug may be marketed in the United States generally involves the following: ● completion of preclinical laboratory tests, animal studies and formulation studies according to GLP regulations; ● manufacture of the drug product in accordance with cGMP regulations; ● submission to the FDA of an investigational new drug application, or IND, which must become effective before human clinical trials may begin; ● performance of adequate and well-controlled human clinical trials according to Good Clinical Practice, or GCP, regulations to establish the safety and efficacy of the proposed drug for its intended use; ● preparation and submission to the FDA of a new drug application, or NDA; ● payment of user fees for FDA review of an NDA; ● satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product, or components thereof, are produced to assess compliance with cGMP; 72 Table of Contents ● satisfactory completion of an FDA audit of clinical trial sites to assess compliance with GCP; and ● review and approval by the FDA of the NDA. The testing and approval process require 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. Once a pharmaceutical product candidate is identified for development, it enters the preclinical testing stage. Preclinical tests include laboratory evaluations of product chemistry, toxicity, formulation and stability, as well as animal studies. An IND sponsor must submit the results of the preclinical tests, together with manufacturing information, analytical data and any available clinical data or literature, to the FDA as part of the IND. The sponsor must also include a protocol detailing, among other things, the objectives of the initial clinical trial, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated if the initial clinical trial lends itself to an efficacy evaluation. Some preclinical testing may continue even after the IND is submitted. The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA raises concerns or questions related to a proposed clinical trial and places the trial on a clinical hold within that 30-day time period. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. Clinical holds also may be imposed by the FDA at any time before or during clinical trials due to safety concerns or non-compliance and may be imposed on all drug products within a certain class of drugs. The FDA also can impose partial clinical holds, for example, prohibiting the initiation of clinical trials of a certain duration or for a certain dose. All clinical trials must be conducted under the supervision of one or more qualified investigators in accordance with GCP regulations. These regulations include the requirement that all research subjects provide informed consent in writing before their participation in any clinical trial. Further, an IRB must review and approve the plan for any clinical trial before it commences at any institution, and the IRB must conduct continuing review and reauthorize the trial at least annually. An IRB considers, among other things, whether the risks to individuals participating in the clinical trial are minimized and are reasonable in relation to anticipated benefits. The IRB also approves the information regarding the clinical trial and the consent form that must be provided to each clinical trial subject or his or her legal representative and must monitor the clinical trial until completed. Each new clinical protocol and any amendments to the protocol must be submitted for FDA review, and to the IRBs for approval. Protocols detail, among other things, the objectives of the clinical trial, dosing procedures, subject selection and exclusion criteria, the parameters to assess efficacy and the parameters to be used to monitor subject safety. Human clinical trials are typically conducted in three sequential phases that may overlap or be combined: Phase 1. The product is initially introduced into a small number of healthy human subjects or patients and tested for safety, dosage tolerance, absorption, metabolism, distribution and excretion and, if possible, to gain early evidence on effectiveness. In the case of some products for severe or life-threatening diseases, especially when the product is suspected or known to be unavoidably toxic, the initial human testing may be conducted in patients. Phase 2. Involves clinical trials in a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage and schedule. Phase 3. Clinical trials are undertaken to further evaluate dosage, clinical efficacy and safety in an expanded patient population. These clinical trials are intended to establish the overall risk/benefit relationship of the product and provide an adequate basis for product labeling. Post-approval trials, sometimes referred to as Phase 4 clinical trials, may be conducted after initial marketing approval. These trials are used to gain additional experience from the treatment of patients in the intended therapeutic indication. In certain instances, the FDA may mandate the performance of Phase 4 clinical trials as a condition of approval of an NDA. 73 Table of Contents Progress reports detailing the results of the clinical trials must be submitted at least annually to the FDA. Written IND safety reports must be submitted to the FDA and the investigators for serious and unexpected suspected adverse events, any clinically important increase in the rate of a serious suspected adverse reaction over that listed in the protocol or investigator's brochure, or any findings from other studies or animal or in vitro testing that suggest a significant risk in humans exposed to the product drug. These safety reports must be submitted within 15 calendar days after the sponsor determines that the information qualifies for reporting, and a sponsor also must notify the FDA of any unexpected fatal or life-threatening suspected adverse reaction within seven calendar days after the sponsor’s initial receipt of the information. The FDA or the sponsor may suspend or terminate a clinical trial at any time on various grounds, including a finding that the research subjects or patients are being exposed to an unacceptable health risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the drug has been associated with unexpected serious harm to patients. Additionally, some clinical trials are overseen by an independent group of qualified experts organized by the clinical trial sponsor, known as a data safety monitoring board or committee. This group provides authorization for whether a trial may move forward at designated checkpoints based on access to certain data from the trial. Concurrent with clinical trials, companies usually complete additional animal studies and must also develop additional information about the chemistry and physical characteristics of the product 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, among other things, the manufacturer must develop methods for testing the identity, strength, quality and purity of the final 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. A drug being studied in clinical trials may be made available to individual patients in certain circumstances outside of clinical trials, known as expanded access or “compassionate use”. There is no requirement for a company to provide expanded access to its investigational product. However, if a company decides to make its investigational product available for expanded access, FDA reviews each request for expanded access and determines if treatment may proceed. Under the FDCA, a sponsor of one or more investigational products for the treatment of a serious disease or condition is required to make publicly available, such as by posting on its website, its policy on evaluating and responding to requests for individual patient access to such investigational drug. This requirement applies on the earlier of the first initiation of a Phase 2 or Phase 3 trial of the investigational drug, or as applicable, 15 days after the drug receives a designation as a breakthrough therapy, fast track product, or regenerative advanced therapy. U.S. Review and Approval Processes The results of product development, preclinical studies and clinical trials, along with descriptions of the manufacturing process, analytical tests conducted on the drug, proposed labeling and other relevant information, are submitted to the FDA as part of an NDA for a new drug, requesting approval to market the product. The submission of an NDA is subject to the payment of a substantial user fee; a waiver of such fee may be obtained under certain limited circumstances. For example, the agency will waive the application fee for the first human drug application that a small business or its affiliate submits for review. The holder of an approved NDA is also subject to an annual prescription drug product program fee. The FDA reviews all NDAs submitted to ensure that they are sufficiently complete for substantive review before it accepts them for filing. The FDA may request additional information rather than accept an NDA for filing. In this event, the NDA must be re-submitted with the additional information. The re-submitted application also is subject to review before the FDA accepts it for filing. Once the submission is accepted for filing, the FDA begins an in-depth substantive review. The FDA reviews an NDA to determine, among other things, whether a product is safe and effective for its intended use and whether its manufacturing is cGMP-compliant to assure the product’s identity, strength, quality and purity. Before approving an NDA, the FDA typically will inspect the facility or facilities where the product is or will be manufactured. The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications. The FDA may refer the NDA to an advisory committee for review, evaluation and recommendation as to whether the application should be approved and under what conditions. An advisory committee is a panel of experts, including clinicians and other scientific experts, who provide advice and recommendations when requested by the FDA. 74 Table of Contents The FDA is not bound by the recommendation of an advisory committee, but it considers such recommendations when making decisions. The approval process is lengthy and difficult, and the FDA may refuse to approve an NDA if the applicable regulatory criteria are not satisfied or may require additional clinical data or other data and information. Even if such data and information are 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. The FDA will issue a complete response letter if the agency decides not to approve the NDA in its present form. The complete response letter usually describes all of the specific deficiencies that the FDA identified in the NDA that must be satisfactorily addressed before it can be approved. The deficiencies identified may be minor, for example, requiring labeling changes, or major, for example, requiring additional clinical trials. Additionally, the complete response letter may include recommended actions that the applicant might take to place the application in a condition for approval. 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 or request an opportunity for a hearing. If a product receives regulatory approval, the approval may be significantly limited to specific patients and dosages or the indications for use may otherwise be limited, which could restrict the commercial value of the product. Further, the FDA may require that certain contraindications, warnings or precautions be included in the product labeling. In addition, the FDA may require post-approval studies, including Phase 4 clinical trials, to further assess a drug’s safety and effectiveness after NDA approval and may require testing and surveillance programs to monitor the safety of approved products that have been commercialized. The FDA may require a Risk Evaluation and Mitigation Strategy, or REMS, program as a condition of approval, which could entail requirements for long-term patient follow-up, a medication guide, physician communication plans or additional elements to ensure safe use, such as restricted distribution methods, patient registries and other risk minimization tools. Fast Track Designation and Accelerated Approval The FDA has a Fast Track program that is intended to expedite or facilitate the process for reviewing new drugs that meet certain criteria. Specifically, new drugs are eligible for Fast Track designation if they are intended to treat a serious or life-threatening disease or condition for which there is an unmet medical need and demonstrate the potential to address unmet medical needs for the condition. Fast Track designation applies to the combination of the product and the specific indication for which it is being studied. The sponsor of a new drug may request the FDA to designate the drug as a Fast Track product concurrently with, or at any time after, submission of an IND, and the FDA must determine if the drug candidate qualifies for fast track designation within 60 days of receipt of the sponsor’s request. In addition to other benefits, such as the ability to engage in more frequent interactions with the FDA, the FDA may initiate review of sections of a Fast Track drug’s NDA before the application is complete. This rolling review is available if the applicant provides, and the FDA approves, a schedule for the submission of each portion of the NDA and the applicant pays applicable user fees. However, the FDA’s time period goal for reviewing an application does not begin until the last section of the NDA is submitted. Additionally, the Fast Track designation may be withdrawn by the FDA if the FDA believes that the designation is no longer supported by data emerging in the clinical trial process. Under FDA’s accelerated approval regulations, the FDA may approve a drug for a serious or life-threatening illness that provides meaningful therapeutic benefit to patients over existing treatments based upon a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments. In clinical trials, a surrogate endpoint is a marker, such as a measurement of laboratory or clinical signs of a disease or condition that is thought to predict clinical benefit, but is not itself a measure of clinical benefit. Surrogate endpoints can often be measured more easily or more rapidly than clinical endpoints. A drug candidate approved on this basis is subject to rigorous post-marketing compliance requirements, including the completion of one or more post-approval confirmatory clinical trials to confirm the effect on the clinical endpoint. Further, under the FDORA, the FDA may require, as appropriate, that such trials be underway prior to approval or within a specific time period after the date of approval for a product granted accelerated approval. Under FDORA, the FDA has increased authority for expedited procedures to withdraw approval of a drug or indication approved under accelerated approval for failure to conduct 75 Table of Contents required post-approval studies with diligence or to confirm a clinical benefit in confirmatory studies. Promotional materials for drug candidates approved under accelerated regulations are subject to prior review by the FDA. Breakthrough Therapy Designation A drug product can be designated as a breakthrough therapy if it is intended to treat a serious or life-threatening disease or condition and preliminary clinical evidence indicates that it may demonstrate substantial improvement over available therapies on one or more clinically significant endpoints. A sponsor may request that a drug product be designated as a breakthrough therapy concurrently with, or at any time after, the submission of an IND, and the FDA must determine if the drug candidate qualifies for breakthrough therapy designation within 60 days of receipt of the sponsor’s request. If so designated, the FDA shall act to expedite the development and review of the product’s marketing application, including by meeting with the sponsor throughout the product’s development, providing timely advice to the sponsor to ensure that the development program to gather preclinical and clinical data is as efficient as practicable, involving senior managers and experienced review staff in a cross-disciplinary review, assigning a cross-disciplinary project lead for the FDA review team to facilitate an efficient review of the development program and to serve as a scientific liaison between the review team and the sponsor, and taking steps to ensure that the design of the clinical trials is as efficient as practicable. Platform Technology Designation Under FDORA, a platform technology incorporated within or utilized by a drug or biological product is eligible for designation as a designated platform technology if (1) the platform technology is incorporated in, or utilized by, a drug approved under an NDA or BLA; (2) preliminary evidence submitted by the sponsor of the approved or licensed drug, or a sponsor that has been granted a right of reference to data submitted in the application for such drug, demonstrates that the platform technology has the potential to be incorporated in, or utilized by, more than one drug without an adverse effect on quality, manufacturing, or safety; and (3) data or information submitted by the applicable person indicates that incorporation or utilization of the platform technology has a reasonable likelihood to bring significant efficiencies to the drug development or manufacturing process and to the review process. A sponsor may request the FDA to designate a platform technology as a designated platform technology concurrently with, or at any time after, submission of an IND for a drug that incorporates or utilizes the platform technology that is the subject of the request. If so designated, the FDA may expedite the development and review of any subsequent original NDA or BLA for a drug that uses or incorporates the platform technology. Designated platform technology status does not ensure that a drug will be developed more quickly or receive FDA approval. In addition, the FDA may revoke a designation if the FDA determines that a designated platform technology no longer meets the criteria for such designation. Priority Review The FDA may grant an NDA a priority review designation, which sets the target date for FDA action on the application for a new molecular entity at six months after the FDA accepts the application for filing. Priority review is granted where there is evidence that the proposed product would be a significant improvement in the safety or effectiveness of the treatment, diagnosis, or prevention of a serious condition compared to available therapies. If criteria are not met for priority review, the application is subject to the standard FDA review period of ten months after FDA accepts the application for filing. Priority review designation does not change the scientific/medical standard for approval or the quality of evidence necessary to support approval. Rare Pediatric Disease Priority Review Voucher The FDA may grant rare pediatric disease designation for indications in the treatment or prevention of a rare disease or condition that affects fewer than 200,000 individuals in the United States and that is a serious or life-threatening disease that primarily affects individuals aged from birth to 18 years, including age groups often called neonates, infants, children and adolescents. Under the FDCA, a sponsor who receives approval of an NDA for a product that is for the prevention or treatment of a rare pediatric disease and meets certain additional criteria, may qualify for a rare pediatric disease priority review voucher (“PRV”). A PRV can be redeemed to receive priority review under an expedited timeframe for a subsequent marketing application for a different product. A PRV may also be sold or transferred from the initial sponsor to another sponsor and may be further transferred any number of times before it is used. Under the current statutory sunset 76 Table of Contents provisions, FDA may not award rare pediatric disease PRVs after September 30, 2029. It is possible the authority for FDA to award rare pediatric disease PRVs will be further extended by Congress, however. Post-Approval Requirements Any products for which we receive FDA approval are subject to continuing regulation by the FDA, including, among other things, record-keeping requirements, reporting of adverse experiences with the product, providing the FDA with updated safety and efficacy information, product sampling and distribution requirements, complying with certain electronic records and signature requirements and complying with FDA promotion and advertising requirements. The FDA strictly regulates labeling, advertising, promotion and other types of information on products that are placed on the market. Products may be promoted only for the approved indications and in accordance with the provisions of the approved label. Further, manufacturers must continue to comply with cGMP requirements, which are extensive and require considerable time, resources and ongoing investment to ensure compliance. In addition, changes to the manufacturing process generally require prior FDA approval before being implemented and other types of changes to the approved product, such as adding new indications and additional labeling claims, are also subject to further FDA review and approval. Manufacturers and other entities involved in the manufacturing and distribution of approved products are required to register their establishments with the FDA and certain state agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMP and other laws. The cGMP requirements apply to all stages of the manufacturing process, including the production, processing, sterilization, packaging, labeling, storage and shipment of the product. Manufacturers must establish validated systems to ensure that products meet specifications and regulatory standards, and test each product batch or lot prior to its release. Manufacturers and other parties involved in the drug supply chain for prescription drugs and biologics must also comply with product tracking and tracing requirements and for notifying the FDA of counterfeit, diverted, stole and intentionally adulterated products or products that are otherwise unfit for distribution in the United States. The FDA may withdraw a product approval if compliance with regulatory requirements is not maintained or if problems occur after the product reaches the market. Later discovery of previously unknown problems with a product may result in restrictions on the product or even complete withdrawal of the product from the market. Further, the failure to maintain compliance with regulatory requirements may result in administrative or judicial actions, such as fines, untitled or warning letters, holds on clinical trials, product seizures, product detention or refusal to permit the import or export of products, refusal to approve pending applications or supplements, restrictions on marketing or manufacturing, injunctions or civil or criminal penalties. From time to time, legislation is drafted, introduced and passed in Congress that could significantly change the statutory provisions governing the approval, manufacturing and marketing of products regulated by the FDA. In addition to new legislation, FDA regulations, guidance, and policies are often revised or reinterpreted by the agency in ways that may significantly affect our business and our product candidates. It is impossible to predict whether further legislative or FDA regulation or policy changes will be enacted or implemented and what the impact of such changes, if any, may be. Patent Term Restoration and Marketing Exclusivity Depending upon the timing, duration and specifics of FDA approval of the use of our product candidates, some of our U.S. patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, commonly referred to as the Hatch-Waxman Amendments. The Hatch-Waxman Amendments permit a patent restoration term of up to five years as compensation for patent term lost during product development and the FDA regulatory review process. However, patent term restoration cannot extend the remaining term of a patent beyond a total of 14 years from the product’s approval date. The patent term restoration period is generally one-half the time between the effective date of an IND and the submission date of an NDA plus the time between the submission date of an NDA and the approval of that application, except that the review period is reduced by any time during which the applicant failed to exercise due diligence. Only one patent applicable to an approved drug is eligible for the extension and the application for the extension must be submitted prior to the expiration of the patent. The U.S. Patent and Trademark Office, in consultation with the FDA, reviews and approves the application for any patent term extension or restoration. In the future, we intend to apply for restorations of patent term for some of our currently owned or licensed patents to add patent life beyond their 77 Table of Contents current expiration dates, depending on the expected length of the clinical trials and other factors involved in the filing of the relevant NDA; however, there can be no assurance that any such extension will be granted to us. Market exclusivity provisions under the FDCA can also delay the submission or the approval of certain applications. The FDCA provides a five-year period of non-patent marketing exclusivity within the United States to the first applicant to gain approval of an NDA for a new chemical entity. A drug is a new chemical entity if the FDA has not previously approved any other new drug containing the same active moiety, which is the molecule or ion responsible for the action of the drug substance. During the exclusivity period, the FDA may not accept for review an abbreviated new drug application (“ANDA”), or a 505(b)(2) NDA submitted by another company for another version of such drug where the applicant does not own or have a legal right of reference to all the data required for approval. However, an application may be submitted after four years if it contains a certification of patent invalidity or non-infringement. The FDCA also provides three years of marketing exclusivity for an NDA, 505(b)(2) NDA or supplement to an existing NDA if new clinical investigations, other than bioavailability studies, that were conducted or sponsored by the applicant are deemed by the FDA to be essential to the approval of the application, for example, new indications, dosages or strengths of an existing drug. This three-year exclusivity covers only the conditions of use associated with the new clinical investigations and does not prohibit the FDA from approving ANDAs for drugs containing the original active agent. Five-year and three-year exclusivity will not delay the submission or approval of a full NDA. However, an applicant submitting a full NDA would be required to conduct or obtain a right of reference to all of the preclinical studies and adequate and well-controlled clinical trials necessary to demonstrate safety and effectiveness. Pediatric exclusivity is another type of exclusivity in the United States. Pediatric exclusivity, if granted, provides an additional six months to an existing regulatory exclusivity or patent term. This six-month exclusivity, which runs from the end of other regulatory exclusivity protection or patent term, may be granted based on the voluntary completion of a pediatric clinical trial that fairly responds to an FDA-issued “Written Request” for such a clinical trial. Orphan Drugs Under the Orphan Drug Act, the FDA may grant orphan drug designation to drugs intended to treat a rare disease or condition—a disease or condition that affects fewer than 200,000 individuals in the United States, or more than 200,000 individuals in the United States and for which there is no reasonable expectation that the cost of developing and making a drug in the United States for this type of disease or condition will be recovered from sales of the product. Orphan drug designation must be requested before submitting an NDA. After the FDA grants orphan drug designation, the generic identity of the drug and its potential orphan use are disclosed publicly by the FDA. Orphan drug designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process. The first NDA applicant to receive FDA approval for a particular active ingredient to treat a particular disease or condition with FDA orphan drug designation is entitled to a seven-year exclusive marketing period in the United States for that product, for that indication. During the seven-year exclusivity period, the FDA may not approve any other applications to market the same drug for the same disease or condition, except in limited circumstances, such as if the second applicant demonstrates the clinical superiority of its product to the product with orphan drug exclusivity through a demonstration of superior safety, superior efficacy, or a major contribution to patient care. Orphan drug exclusivity does not prevent FDA from approving a different drug for the same disease or condition, or the same drug for a different disease or condition. Among the other benefits of orphan drug designation are tax credits for certain research and a waiver of the NDA application user fee. Pediatric Information Under the Pediatric Research Equity Act of 2003, as amended, NDAs or supplements to NDAs must contain data adequate to assess the safety and effectiveness 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 FDCA requires that a sponsor who is planning to submit a marketing application for a drug product that includes a new active ingredient, new indication, new dosage form, new dosing regimen or new route of administration submit an initial Pediatric Study Plan (“PSP”), within sixty days of an end-of-Phase 2 meeting or as may be agreed between the sponsor and the FDA. 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 may, on its own initiative 78 Table of Contents or at the request of the applicant, grant deferrals for submission of data or full or partial waivers. 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. Disclosure of Clinical Trial Information Sponsors of certain clinical trials of FDA-regulated products, including drugs, are required to register and disclose certain clinical trial information, which is publicly available at www.clinicaltrials.gov. Information related to the product, patient population, phase of investigation, trial sites and investigators, and other aspects of the clinical trial is then made public as part of the registration. Sponsors are also obligated to disclose the results of their clinical trials after completion. Disclosure of the results of these trials can be delayed until the new product or new indication being studied has been approved. Competitors may use this publicly available information to gain knowledge regarding the progress of development programs. Pharmaceutical Coverage, Pricing and Reimbursement Significant uncertainty exists as to the coverage and reimbursement status of any drug 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. The process for determining whether a payor will provide coverage for a drug product may be separate from the process for setting the reimbursement rate that the payor will pay for the drug product. Third-party payors may limit coverage to specific drug products on an approved list, or formulary, which might not include all of the FDA-approved drugs for a particular indication. Moreover, a payor’s decision to provide coverage for a drug product does not imply that an adequate reimbursement rate will be approved. Adequate third-party reimbursement may not be available to enable us to maintain price levels sufficient to realize an appropriate return on our investment in product development. Third-party payors are increasingly challenging the price and examining the medical need and cost-effectiveness of medical products and services, in addition to their safety and efficacy. In order to obtain coverage and reimbursement for any product that might be approved for sale, we may need to conduct expensive pharmaco-economic studies in order to demonstrate the medical need and cost-effectiveness of any products, in addition to the costs required to obtain regulatory approvals. Our product candidates may not be considered medically necessary or cost-effective. If third-party payors do not consider a product to be cost-effective compared to other available therapies, they may not cover the product after approval as a benefit under their plans or, if they do, the level of payment may not be sufficient to allow a company to sell its products at a profit. The U.S. government and state legislatures have shown significant interest in implementing cost containment programs to limit the growth of government-paid health care costs, including price controls, restrictions on reimbursement and requirements for substitution of generic products for branded prescription drugs. For example, ACA, contains provisions that may reduce the profitability of drug products, including, for example, increased rebates for drugs reimbursed by Medicaid programs, extension of Medicaid rebates to Medicaid managed care plans, mandatory discounts for certain Medicare Part D beneficiaries and annual fees based on pharmaceutical companies’ share of sales to federal health care programs. Adoption of government controls and measures, and tightening of restrictive policies in jurisdictions with existing controls and measures, could limit payments for pharmaceuticals. The marketability of any products for which we receive regulatory approval for commercial sale may suffer if the government and third-party payors fail to provide adequate coverage and reimbursement. In addition, an increasing emphasis on cost containment measures in the United States has increased and we expect will continue to increase the pressure on pharmaceutical pricing. Coverage policies and third-party reimbursement rates may change at any time. Even if favorable coverage and reimbursement status is attained for one or more products for which we receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future. 79 Table of Contents Other Healthcare Laws and Compliance Requirements If we obtain regulatory approval of our products, we will be subject to various federal and state laws targeting fraud and abuse in the healthcare industry. These laws may impact, among other things, our proposed sales, marketing and education programs. In addition, we may be subject to patient privacy regulation by both the federal government and the states in which we conduct our business in the U.S. and applicable privacy legislation outside of the U.S., such as the GDPR in the EU and the UK. The laws that may affect our ability to operate include: ● the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order, or recommendation of, an item or service reimbursable under a federal healthcare program, such as the Medicare and Medicaid programs. A person or entity can be found guilty of violating the statute without actual knowledge of the statute or specific intent to violate it. The term remuneration has been interpreted broadly to include anything of value. Further, courts have found that if “one purpose” of remuneration is to induce referrals, the federal Anti-Kickback statute is violated. Violations are subject to significant civil and criminal fines and penalties for each violation, plus up to three times the remuneration involved, imprisonment, and exclusion from government healthcare programs. In addition, a claim submitted for payment to any federal healthcare program that includes items or services that were made as a result of a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal FCA. The Anti-Kickback Statute has been interpreted to apply to arrangements between biopharmaceutical manufacturers on the one hand and prescribers, purchasers, and formulary managers, among others, on the other. There are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution, and on November 20, 2020, the Office of Inspector General, or OIG, finalized further modifications to the federal Anti-Kickback Statute; ● federal civil and criminal false claims laws and civil monetary penalty laws, including the FCA and civil monetary penalty laws which impose criminal and civil penalties, including through civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, including the Medicare and Medicaid programs, claims for payment that are false or fraudulent or making a false statement or record to avoid, decrease or conceal an obligation to pay money to the federal government. A claim that includes items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim under the FCA. Manufacturers can be held liable under the FCA even when they do not submit claims directly to government payors if they are deemed to “cause” the submission of false or fraudulent claims. The FCA also permits a private individual acting as a “whistleblower” to bring qui tam actions on behalf of the federal government alleging violations of the FCA and to share in any monetary recovery or settlement. When an entity is determined to have violated the FCA, the government may impose civil fines and penalties for each false claim, plus treble damages, and exclude the entity from participation in Medicare, Medicaid and other federal healthcare programs; ● the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which imposes federal criminal and civil liability for executing a scheme to defraud any healthcare benefit program and also created federal criminal laws that prohibit knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statements or using or making any false or fraudulent document in connection with the delivery of or payment for healthcare benefits, items or services. Similar to the federal Anti-Kickback Statute, a person or entity can be found guilty of violating HIPAA fraud provisions without actual knowledge of the statute or specific intent to violate it; ● the federal transparency laws, including the provision of the ACA referred to as the federal Physician Payment Sunshine Act, that requires applicable manufacturers of covered drugs to disclose payments and other transfers of value provided to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician providers (such as physician assistants and nurse practitioners), and teaching hospitals and physician ownership and investment interests; 80 Table of Contents ● HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, and its implementing regulations, which imposes certain requirements relating to the privacy, security and transmission of individually identifiable health information on certain covered healthcare providers, health plans, and healthcare clearinghouses, known as covered entities, as well as their respective business associates; ● Federal government price reporting laws, which require us to calculate and report complex pricing metrics in an accurate and timely manner to government programs; ● Federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; ● state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers, 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 may not have the same effect, thus complicating compliance efforts; and ● the General Data Protection Regulation (EU) 2016/679 in the EU, which has been also been incorporated into UK’s laws, which includes among other obligations and requirements on: (i) when and how an organization can collect and rely upon consent obtained from an individual to process their personal data; (ii) the provision of information to individuals relating to the processing of their personal data; (iii) how to notify personal data breaches to competent data protection authorities and/or individuals; and (iv) may include additional requirements in relation to the processing of certain categories of data (i.e. “sensitive information” or special category data), which includes health data, data revealing racial or ethnic origin, and genetic data. Healthcare reform In the United States and some foreign jurisdictions, there have been, and continue to be, several legislative and regulatory changes and proposed changes regarding the healthcare system that could impact our ability to sell our products profitably. In the United States, the Medicare Modernization Act established the Medicare Part D program and provided authority for limiting the number of drugs that will be covered in any therapeutic class thereunder. The Medicare Modernization Act, including its cost reduction initiatives, could decrease the coverage and reimbursement rate that we or a collaborator receive for any of our approved products. Furthermore, private payors often follow Medicare coverage policies and payment limitations in setting their own reimbursement rates. Therefore, any reduction in reimbursement that results from the Medicare Modernization Act may result in a similar reduction in payments from private payors. In March 2010, the ACA was enacted, which substantially changed the way health care is financed by both governmental and private insurers, and significantly impacted the U.S. biopharmaceutical industry. The ACA imposes a significant annual fee on companies that manufacture or import branded prescription drug products. It also contains provisions intended to broaden access to health insurance, reduce or constrain the growth of health care spending, enhance remedies against healthcare fraud and abuse, establish transparency requirements for the healthcare and health insurance industries, and impose additional health policy reforms, any of which could negatively impact our business. Among other things, it subjects biological products to potential competition by lower-cost biosimilars, expands the types of entities eligible for the 340B drug discount program, revised the methodology for calculating Medicaid rebates for certain physician-administered and infused products; increased the minimum Medicaid rebates owed by most manufacturers under the Medicaid Drug Rebate Program and extended the rebate program to individuals enrolled in Medicaid managed care organizations, established annual fees and taxes on manufacturers of certain branded prescription drugs, and created a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 70% point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D. The ACA’s provisions likely continue the downward pressure on pharmaceutical and medical device pricing, especially under the Medicare program, and may also increase our regulatory burdens and operating costs. 81 Table of Contents Since its enactment, there have been judicial, Congressional and executive challenges to certain aspects of the ACA, including efforts to repeal or replace the ACA. For example, on June 17, 2021, the U.S. Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA. In addition, other legislative and regulatory changes have been proposed and adopted in the United States since the ACA was enacted. For example: ● The U.S. Budget Control Act of 2011, among other things, included aggregate reductions of Medicare payments to providers of 2% per fiscal year. The reductions remain in effect through 2031. ● The U.S. American Taxpayer Relief Act of 2012 among other things, further reduced Medicare payments to several types of providers. ● The American Rescue Plan Act of 2021 eliminated the statutory Medicaid drug rebate cap, previously set at 100% of a drug’s average manufacturer price, for single source and innovator multiple source drugs, effective January 1, 2024. ● Due to the Statutory Pay-As-You-Go Act of 2010, estimated budget deficit increases resulting from the American Rescue Plan Act of 2021, and subsequent legislation, Medicare payments to providers will be further reduced starting in 2025 absent further legislation. ● Additionally, on November 30, 2020, HHS published a regulation removing safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under Part D, either directly or through pharmacy benefit managers, unless the price reduction is required by law. The rule also creates a new safe harbor for price reductions reflected at the point-of-sale, as well as a safe harbor for certain fixed fee arrangements between pharmacy benefit managers and manufacturers. Pursuant to court order, the removal and addition of the aforementioned safe harbors were delayed, and the IRA delayed implementation of the rule until January 1, 2032. ● The IRA also included several provisions that will impact our business to varying degrees, including provisions that, starting in 2025, reduced the out-of-pocket cap for Medicare Part D beneficiaries to $ 2,000; impose new manufacturer financial liability on certain drugs in Medicare Part D, allow the U.S. government to negotiate Medicare Part B and Part D price caps for certain high-cost drugs and biologics without generic or biosimilar competition, require companies to pay rebates to Medicare for certain drug prices that increase faster than inflation, and delay the rebate rule that would limit the fees that pharmacy benefit managers can charge. The implementation of the IRA is currently subject to ongoing litigation challenging the constitutionality of the Medicare drug price negotiation program. The effects of the IRA on our business and the healthcare industry in general are not yet known. ● The One Big Beautiful Bill Act of 2025 also imposed significant reductions in Medicaid funding and enrollment requirements, which are expected to reduce Medicaid enrollment and covered services, which may further reduce demand for our products, if approved. These laws and regulations may result in additional reductions in Medicare and other healthcare funding and otherwise affect the prices we may obtain for any of our product candidates for which we may obtain regulatory approval or the frequency with which any such product candidate is prescribed or used. Additionally, there has been increasing legislative and enforcement interest in the United States with respect to drug pricing practices. There has been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several U.S. Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under Medicare, and review the relationship between pricing and manufacturer patient programs. In addition, recent executive and agency actions have advanced various MFN-type pricing concepts that could materially affect the prices we may obtain for any products, if approved. The Trump administration has pursued a two-fold strategy aimed at lowering 82 Table of Contents U.S. drug prices through MFN-linked pricing mechanisms. First, the President has publicly threatened to impose significant tariffs or penalties on manufacturers that do not reduce U.S. drug prices to levels comparable to those in other economically developed countries, and multiple manufacturers have reportedly entered into confidential pricing agreements with HHS in response. Second, CMS has begun exploring new payment and coverage models that incorporate MFN concepts, including the 2025 GENEROUS model, which would offer standardized Medicaid coverage to manufacturers that voluntarily agree to lower prices consistent with MFN benchmarks. Even if these initiatives are later narrowed, delayed, or invalidated through litigation or subsequent administrative actions, the threat or use of MFN-type pricing mechanisms may exert downward pressure on the prices we are able to charge. The administration has also announced plans to launch a federal direct-purchase and patient-access platform, sometimes described as “TrumpRx.gov,” which is expected to rely on MFN-style reference pricing for certain high-spend drugs; if implemented, this could further limit the prices we obtain for our products. The costs of prescription pharmaceuticals have also been the subject of considerable discussion in the United States. To date, there have been several recent U.S. congressional inquiries, as well as proposed and enacted federal and state legislation designed to, among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, reduce the costs of drugs under Medicare and reform government program reimbursement methodologies for drug products. The Trump Administration has issued executive orders and supported proposed regulatory initiatives in 2025 that could have a significant impact on the prices that we, or any collaborators, may receive for any approved products. On May 12, 2025, President Trump signed an executive order directing the Secretary of HHS to set and communicate MFN price targets to manufacturers and propose a rulemaking plan to impose MFN pricing if ‘significant progress’ is not made, and also directing the federal government to support regulatory paths to allow direct-to-patient sales for companies that meet these targets. The executive order further states that the Administration will take additional action (for example, examining whether marketing approvals should be modified or rescinded or considering individual drug importation waiver authorities) should manufacturers fail to offer American consumers the MFN lowest price. In July 2025, President Trump sent letters to certain pharmaceutical companies demanding that these companies extend MFN pricing to Medicaid and newly launched drugs as well as move to direct-to-consumer models priced at MFN pricing and soliciting binding commitments by September 29, 2025. Since this time, multiple drug manufacturers have announced plans to, for certain of their drugs, lower prices to reflect similar pricing around the world, and to sell these reduced-price drugs on a direct-to-consumer purchasing platform developed by the federal government; however, it is not known what results will occur to the extent the recipients of these letters do not reduce their U.S. prices. On December 19, 2025, CMS released two proposed rules that would incorporate MFN pricing principles into federal reimbursement for prescription drugs. The first proposal, the GLOBE for Medicare Part B, would require manufacturers of specified single source drugs and sole source biologics to pay incremental rebates based on international benchmark prices, with participation triggered for products meeting CMS’s spending and eligibility criteria. The second proposal, the GUARD model for Medicare Part D, would similarly mandate manufacturer rebates for qualifying sole source drugs where the Medicare net price exceeds an MFN benchmark derived from international reference pricing methodologies. As proposed, GLOBE would begin a five year performance period on October 1, 2026 and GUARD would begin its performance period in 2027. These proposals will likely be subject to legal challenges that could delay their implementation or modify their impact on manufacturer pricing and revenue. Additionally, in November 2025, CMS introduced the GENEROUS Model, a voluntary MFN framework for manufacturers participating in the Medicaid Drug Rebate Program. Although it is voluntary, the GENEROUS Model could also impact the drug pricing landscape for manufacturers. We expect that these and other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteria and in additional downward pressure on the price that we, or our collaborators, would receive for any approved drug, which could have an adverse effect on customers for our product candidates. Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors. 83 Table of Contents Regulation in the European Union Product development, the regulatory approval process, and safety monitoring of medicinal products and their manufacturers in the EU proceed in much the same manner as they do in the United States. Therefore, many of the issues discussed above apply similarly in the context of the EU. In addition, medicinal products are subject to the extensive price and reimbursement regulations of the various EU Member States. Clinical Trials Approval As is the case in the United States, the various phases of preclinical and clinical research in the EU are subject to significant regulatory controls. In April 2014, the EU adopted the Clinical Trials Regulation (EU) No 536/2014 (Regulation), which replaced the previous Clinical Trials Directive 2001/20/EC (Directive) on January 31, 2022. The Regulation overhauls the former system of approvals for clinical trials in the EU. Specifically, the Regulation, which is directly applicable in all EU Member States (meaning that no national implementing legislation in each EU Member State is required), aims at simplifying and streamlining the approval of clinical trials in the EU. For instance, the Regulation provides for a streamlined application procedure using a single entry point (the Clinical Trials Information System) and strictly defined deadlines for the assessment of clinical trial applications. Following the end of the Brexit transition period, the Medicines and Healthcare products Regulatory Agency (“MHRA”), the UK medicines regulator, continues to authorize clinical trials in the UK. The UK regulatory framework in relation to clinical trials is governed by the Medicines for Human Use (Clinical Trials) Regulations 2004, as amended, which is derived from the Clinical Trials Directive, as implemented into UK national law through secondary legislation. In April 2025, the UK introduced the Medicines for Human Use (Clinical Trials) (Amendment) Regulations 2025. These changes, which will take full effect from April 2026, aim to create a streamlined, risk-proportionate system that accelerates approvals while maintaining robust safety standards. PRIME Designation PRIME is a voluntary scheme launched by the EMA to enhance support for the development of medicines that target an unmet medical need. The scheme focuses on medicines that may offer a major therapeutic advantage over existing treatments, or benefit patients without treatment options. These medicines are considered priority medicines by the EMA. The scheme is open to medicines under development and for which the applicant intends to apply for a marketing authorization through the centralized procedure. This scheme is based on enhanced interaction and early dialogue with developers of promising medicines, to optimize development plans and speed up evaluation and enable accelerated assessment of medicines applications. Medicines under the PRIME scheme may be eligible for accelerated assessment at the time of application for a marketing authorization. Where, during the course of development, a medicine no longer meets the eligibility criteria, support under the PRIME scheme may be withdrawn. Acceptance into the PRIME scheme is based on the applicant’s ability to demonstrate that the medicine has potential to benefit patients with unmet medical needs based on early clinical data. Applicants from the academic sector and micro-, small- and medium-sized enterprises can apply earlier on the basis of compelling non-clinical data and tolerability data from initial clinical trials. Once a candidate medicine has been selected for PRIME, the EMA will: ● appoint a rapporteur from the Committee for Medicinal Products for Human Use (“CHMP”) or from the Committee for Advanced Therapies (“CAT”) for an advanced therapy medical product, to provide continuous support and help to build knowledge ahead of a MAA; ● organize a kick-off meeting with the CHMP/CAT rapporteur and a multidisciplinary group of experts, so that they provide guidance on the overall development plan and regulatory strategy; 84 Table of Contents ● assign a dedicated EMA contact point for ongoing interaction; ● provide scientific advice at key development milestones, involving additional stakeholders such as health-technology-assessment bodies, to facilitate quicker access for patients to the new medicine; and ● confirm potential for accelerated assessment at the time of an application for marketing authorization. Marketing Approval Marketing approvals under the EU regulatory system may be obtained through a centralized or national procedure. The centralized procedure results in the grant of a single marketing authorization that is valid in all—currently 27—EU Member States and in the additional countries of the EEA (Iceland, Liechtenstein and Norway). The UK ceased to be a Member State of the EU on January 31, 2020. Further information on the marketing authorization regime in the UK is included in the Marketing Approval in the United Kingdom – Post-Brexit Regime section below. Pursuant to Regulation (EC) No. 726/2004, as amended, the centralized procedure is mandatory for certain types of products, including products designated as orphan medicinal products pursuant to Regulation (EC) No. 141/2000, medicines produced by biotechnological processes, advanced-therapy medicinal products (gene-therapy, somatic cell-therapy or tissue-engineered medicines), and medicinal products containing a new active substance indicated for the treatment of HIV, AIDS, cancer, neurodegenerative disorders, diabetes, auto-immune and other immune dysfunctions and viral diseases. The CHMP also has the discretion to permit other products to use the centralized procedure if they contain a new active substance, or for products that constitute a significant therapeutic, scientific or technical innovation or which are in the interest of public health in the EU. In the MAA, the applicant has to properly and sufficiently demonstrate the quality, safety and efficacy of the product. Under the centralized procedure, the CHMP, possibly in conjunction with other committees, is responsible for drawing up the opinion of the EMA on any matter concerning the admissibility of the files submitted in accordance with the centralized procedure, such as an opinion on the granting, variation, suspension or revocation of a marketing authorization, and pharmacovigilance. The CHMP and other committees are also responsible for providing guidance and have published numerous guidelines that may apply to our product candidates. These guidelines provide additional guidance on the factors that the EMA will consider in relation to the development and evaluation of products and may include, among other things, the preclinical studies required in specific cases; and the manufacturing and control information that should be submitted in an MAA; and post-approval measures required to monitor patients and evaluate the long term efficacy and potential adverse reactions. Although these guidelines are not legally binding, we believe that our compliance with them is likely necessary to gain approval for any of our product candidates. The maximum timeframe for the evaluation of an MAA by the CHMP under the centralized procedure is 210 days after receipt of a valid application, excluding clock stops, where additional information or written or oral explanation is to be provided by the applicant in response to the questions asked by the CHMP. Clock stops may extend the timeframe of evaluation of an MAA considerably beyond 210 days. When an application is submitted for a marketing authorization in respect of a product which is expected to be of major public interest, particularly from the viewpoint of therapeutic innovation, the applicant may request an accelerated assessment procedure. If the CHMP accepts such request, the timeframe of 210 days for assessment will be reduced to 150 days (excluding clock stops) but it is possible that the CHMP can revert to the standard time-limit for the centralized procedure if it considers that the application is no longer appropriate to conduct an accelerated assessment. If the CHMP concludes that the quality, safety and efficacy of the product is sufficiently proven, it adopts a positive opinion. This is sent to the European Commission which drafts a decision. After consulting with the EU Member States, the European Commission adopts a decision and grants a marketing authorization, which is valid for the whole of the EU. The marketing authorization may be subject to certain conditions, which may include, without limitation, the performance of post-authorization safety and/or efficacy studies. 85 Table of Contents EU legislation also provides for a system of regulatory data and market exclusivity. According to Article 14(11) of Regulation (EC) No. 726/2004, as amended, and Article 10(1) of Directive 2001/83/EC, as amended, upon receiving marketing authorization, innovative medicinal products approved on the basis of a complete and independent data package benefit from eight years of data exclusivity and an additional two years of market exclusivity. Data exclusivity prevents applicants for authorization of generics or biosimilars of these innovative products from referencing the innovator’s preclinical and clinical trial data contained in the dossier of the reference product when applying for a generic or biosimilar marketing authorization in the EU, during a period of eight years from the date on which the reference product was first authorized in the EU. During the additional two-year period of market exclusivity, a generic or biosimilar MAA can be submitted and authorized, and the innovator’s data may be referenced, but no generic or biosimilar medicinal product can be placed on the EU market until the expiration of the market exclusivity. 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 (“MAH”), obtains an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to their authorization, are held to bring a significant clinical benefit in comparison with existing therapies. There is no guarantee that a product will be considered by the EMA to be an innovative medicinal product, and products may not qualify for data exclusivity. Even if a compound is considered to be an innovative medicinal product, so that the innovator is able to gain the period of data exclusivity, another company nevertheless could also market another version of the product if such company obtained a marketing authorization based on an MAA with a complete and independent data package of pharmaceutical tests, preclinical tests and clinical trials. Additional rules apply to medicinal products for pediatric use under Regulation (EC) No. 1901/2006. Potential incentives include a six-month extension of any supplementary protection certificate granted pursuant to Regulation (EC) No. 469/2009, however not in cases in which the relevant product is designated as an orphan medicinal product pursuant to Regulation (EC) No. 141/2000, as amended. Instead, medicinal products designated as orphan medicinal products that qualify for additional protections under Regulation (EC) No. 1901/2006 may receive an extension of the ten-year market exclusivity period granted under Regulation (EC) No. 141/2000 to twelve years subject to the conditions applicable to orphan medicinal products. Marketing Approval in the United Kingdom – Post-Brexit Regime Now that the UK has left the EU, the MHRA is the UK’s stand-alone medicines and medical devices regulator, taking any decisions and carrying out any functions which were previously carried out at the EU-level by the EMA. The UK is no longer covered by the EU’s procedures for the grant of marketing authorizations and a separate marketing authorization is required to market products in the UK. On January 1, 2024, a new international recognition framework was put in place, under which the MHRA may have regard to decisions on the approval of marketing authorizations made by the EMA and certain other regulators when considering an application for a UK marketing authorization. The MHRA also has the power to have regard to marketing authorizations approved in EU Member States through decentralized or mutual recognition (but not purely national procedures) procedures, with a view to granting marketing authorizations in the UK. On February 27, 2023, the UK government and the European Commission announced a political agreement in principle to replace the Northern Ireland Protocol with a new set of arrangements, known as the “Windsor Framework”. The medicines aspects of the Windsor Framework have applied since January 1, 2025. This new framework fundamentally changes the previous system under the Northern Ireland Protocol, including with respect to the regulation of medicinal products in the UK. In particular, the MHRA is responsible for approving all medicinal products destined for the UK market (Great Britain and Northern Ireland) and the EMA no longer has any role in approving medicinal products destined for Northern Ireland under the EU’s centralized procedure. A single UK-wide marketing authorization will be granted by the MHRA for all novel medicinal products to be sold in the UK, enabling products to be sold in a single pack and under a single authorization throughout the UK. In addition, the new arrangements require all medicines placed on the UK market to be labelled “UK only”, indicating they are not for sale in the EU. 86 Table of Contents Orphan Designation Regulation In the EU, Regulation (EC) No. 141/2000, as amended, states that a product will be designated as an orphan medicinal product if its sponsor can establish: ● that it is intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition; ● either (i) such condition affects no more than five in ten thousand persons in the EU when the application is made, or (ii) that it is unlikely that the product, without the benefits derived from orphan status, would generate sufficient return in the EU to justify the necessary investment in its development; and ● that there exists no satisfactory method of diagnosis, prevention or treatment of the condition in question that has been authorized in the EU or, if such method exists, the product would be of a significant benefit to those affected by that condition compared to products available for the condition. Regulation (EC) No. 847/2000 sets out further provisions for implementation of the criteria for designation of product as an orphan medicinal product. An application for the designation of a product as an orphan medicinal product must be submitted at any stage of development of the product before filing of an MAA. Orphan designation entitles a party to financial incentives such as reduction of fees or fee waivers and ten years of market exclusivity is granted following the grant of a marketing authorization. During this market exclusivity period, neither the EMA nor the European Commission nor any of the competent authorities in the EU Members States can accept an application or grant a marketing authorization for a “similar medicinal product”. 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. This ten year period may however be reduced to six years if, at the end of the fifth year, it is established, with respect to the product concerned, that the criteria for orphan designation are no longer met, for example when it is shown on the basis of available evidence that the product is sufficiently profitable not to justify maintenance of market exclusivity. Notwithstanding the foregoing, a marketing authorization may be granted, for the same therapeutic indication, to a similar medicinal product if: ● the holder of the marketing authorization for the original orphan medicinal product has given its consent to the second applicant; ● the holder of the marketing authorization for the original orphan medicinal product is unable to supply sufficient quantities of the product; or ● the second applicant can establish in the application that the second product, although similar to the orphan medicinal product already authorized, is safer, more effective or otherwise clinically superior. Regulation (EC) No. 847/2000 lays down definitions of the concept of ‘clinical superiority’. Orphan designation does not shorten the duration of the regulatory review and approval process. A separate process for orphan designation applies in the UK. Currently, the requirements for orphan designation in UK largely mirror those in the EU (save that they apply to the UK market only – e.g. if the prevalence of the condition is no more than five in ten thousand persons in UK). The main difference to the EU system is that there is no pre-marketing authorization orphan designation in the UK. Instead, the MHRA will make a decision on orphan status at the time it decides whether to approve the MAA. As in the EU, medicinal products with orphan status in the UK will benefit from up to ten years of market exclusivity from the date of first approval of the product in the UK. 87 Table of Contents Manufacturing and Manufacturers’ License Pursuant to Directive (EU) 2017/1572 (which governs GMP for authorized medicinal products under Directive 2001/83/EC) and Commission Delegated Regulation (EU) 2017/1569 (which governs GMP for investigational and auxiliary medicinal products under Regulation (EU) 536/2014), as transposed into the national laws of the EU Member States, the manufacturing of investigational medicinal products and approved medicinal products is subject to a separate manufacturer’s license and must be conducted in strict compliance with GMP requirements, which mandate the methods, facilities, and controls used in manufacturing, processing, and packing of products to assure their safety and identity. Manufacturers must have at least one qualified person permanently and continuously at their disposal in the EU. The qualified person is ultimately responsible for certifying that each batch of finished product released onto the market has been manufactured in accordance with GMP and the specifications set out in the marketing authorization or investigational medicinal product dossier. GMP requirements are enforced through mandatory registration of facilities and inspections of those facilities. Failure to comply with these requirements could interrupt supply and result in delays, unanticipated costs and lost revenues, and subject the applicant to potential legal or regulatory action, including but not limited to warning letters, suspension of manufacturing, seizure of product, injunctive action or possible civil and criminal penalties. The provisions of Directive (EU) 2017/1572 and Commission Delegated Regulation (EU) 2017/1569, as transposed in the UK, have generally been preserved in the UK following the end of the Brexit Transition Period (subject to applicable amendments to ensure their effective operation in the post-Brexit context). The UK-EU Trade and Cooperation Agreement also contains provisions relating to the mutual recognition of GMP inspections and documentation. Advertising In the EU and the UK, the promotion of prescription medicines is subject to intense regulation and control, including EU and national legislation as well as self-regulatory codes (‘industry codes’). Advertising legislation inter alia includes a prohibition on direct-to-consumer advertising of prescription only medicines. All prescription medicines advertising must be consistent with the product’s approved summary of product characteristics, and must be factual, accurate, balanced and not misleading. Advertising of prescription medicines pre-approval or off-label is not allowed. Some jurisdictions require that all promotional materials for prescription medicines be subjected to either prior internal or external regulatory review and approval. Other Regulatory Requirements A holder of a marketing authorization for a medicinal product in the EU or UK is legally obliged to fulfill a number of obligations by virtue of its status as an MAH. The MAH can delegate the performance of related tasks to third parties, such as distributors or marketing partners, provided that this delegation is appropriately documented and the MAH maintains legal responsibility and liability. The obligations of an MAH include: ● Manufacturing and batch release. MAHs should guarantee that all manufacturing operations comply with relevant laws and regulations, applicable good manufacturing practices, with the product specifications and manufacturing conditions set out in the marketing authorization and that each batch of product is subject to appropriate release formalities. ● Pharmacovigilance. MAHs are obliged to establish and maintain a pharmacovigilance system, including a qualified person responsible for oversight, submit safety reports to the regulators and comply with the good pharmacovigilance practice guidelines adopted by the EMA and MHRA. ● Advertising and promotion. MAHs remain responsible for all advertising and promotion of its products, including promotional activities by other companies or individuals on their behalf and in some cases must conduct internal or regulatory pre-approval of promotional materials. Regulation in this area also covers interactions with healthcare practitioners and/or patient groups, and in some jurisdictions obligations to disclose such interactions exist. 88 Table of Contents ● Medical affairs/scientific service. MAHs are required to disseminate scientific and medical information on its medicinal products to healthcare professionals, regulators and patients. ● Legal representation and distributor issues. MAHs are responsible for regulatory actions or inactions of their distributors and agents. ● Preparation, filing and maintenance of the application and subsequent marketing authorization. MAHs must maintain appropriate records, comply with the marketing authorization’s terms and conditions, fulfill reporting obligations to regulators, submit renewal applications and pay all appropriate fees to the authorities. Likewise, in the UK, a holder of a marketing authorization is subject to a number of ongoing obligations. We may hold any future marketing authorizations granted for our product candidates in our own name, or appoint an affiliate or a collaboration partner to hold marketing authorizations on our behalf. Any failure by an MAH to comply with these obligations may result in regulatory action against an MAH and ultimately threaten our ability to commercialize our products. Reimbursement In the EU, the pricing and reimbursement mechanisms by private and public health insurers vary largely by country and even within countries. The public systems reimbursement for standard products is determined by guidelines established by the legislator or responsible national authority. The approach taken varies by EU Member State. Some jurisdictions operate positive and negative list systems under which products may only be marketed once a reimbursement price has been agreed. Other EU Member States allow companies to fix their own prices for medicines, but monitor and control company profits and may limit or restrict reimbursement. The downward pressure on healthcare costs in general, particularly prescription products, has become very intense. As a result, increasingly high barriers are being erected to the entry of new products and some EU countries require the completion of studies that compare the cost-effectiveness of a particular product candidate to currently available therapies in order to obtain reimbursement or pricing approval. Special pricing and reimbursement rules may apply to orphan medicinal products. Inclusion of orphan medicinal products in reimbursement systems tend to focus on the medical usefulness, need, quality and economic benefits to patients and the healthcare system as for any medicine. Acceptance of any medicinal product for reimbursement may come with cost, use and often volume restrictions, which again can vary by country. In addition, results based rules of reimbursement may apply. The UK also has its own pricing and reimbursement rules. The aforementioned EU rules are generally applicable in the EEA. Reform of the Regulatory Framework in the European Union The European Commission introduced legislative proposals in April 2023 that, if implemented, will replace the current regulatory framework in the EU for all medicines (including those for rare diseases and for children). In April 2024, the European Parliament adopted its position on the legislative proposals and, in June 2025, the Council of the European Union adopted its position. A common position on the text has been agreed upon on December 11, 2025, in the context of subsequent inter-institutional trilogue negotiations. The proposed revisions remain to be adopted, and are not expected to become applicable before 2028. 89 Table of Contents C. Organizational structure At December 31, 2025, ProQR Therapeutics N.V. is the ultimate parent company of the following entities: ● ProQR Therapeutics Holding B.V. (the Netherlands, 100%); ● ProQR Therapeutics I B.V. (the Netherlands, 100%); ● ProQR Therapeutics II B.V. (the Netherlands, 100%); ● ProQR Therapeutics III B.V. (the Netherlands, 100%); ● ProQR Therapeutics IV B.V. (the Netherlands, 100%); ● ProQR Therapeutics V B.V. (the Netherlands, 100%); ● ProQR Therapeutics VI B.V. (the Netherlands, 100%); ● ProQR Therapeutics VII B.V. (the Netherlands, 100%); ● ProQR Therapeutics VIII B.V. (the Netherlands, 100%); ● ProQR Therapeutics IX B.V. (the Netherlands, 100%); and ● ProQR Therapeutics I Inc. (United States, 100%). ProQR Therapeutics N.V. is also the statutory director of Stichting Bewaarneming Aandelen ProQR (“ESOP Foundation”) and has full control over this entity. D. Property, Plants and Equipment The Company leases office and laboratory facilities of 4,818 square meters at Zernikedreef in Leiden, the Netherlands, where our headquarters and our laboratories are located. The current lease agreement for these facilities terminates on June 30, 2031 and may be renewed for subsequent 5-year terms. The Company also leases a shared office space in the United States, at CIC Cambridge, located at 245 Main Street, Cambridge, MA 02142. We believe that our existing facilities are adequate to meet current needs and that suitable alternative spaces will be available in the future on commercially reasonable terms.