PRQR

We are exposed to a variety of financial risks: market risk (including foreign exchange risk and interest rate risk), credit risk and liquidity risk. Our overall risk management program focuses on the unpredictability of financial markets. Our cash management policy is focused on optimizing the net interest result of funds invested in deposits while accepting limited risk (short-term credit ratings must be rated A-1/P-1/F1 at a minimum by at least one of the Nationally Recognized Statistical Rating Organizations (“NRSROs”) specifically Moody’s, Standard & Poor’s or Fitch. Long-term credit rating must be rated A2 or A at a minimum by at least one NRSRO). Individual commitments exceeding a defined threshold in foreign currencies may be hedged against our functional currency, the euro, to avoid foreign currency exposure affecting the income statement in comparison to budget. Market Risk Foreign exchange risk arises from future commercial transactions and recognized assets and liabilities in foreign currencies, primarily with respect to the U.S. Dollar. We do not engage in hedging transactions; we use natural hedging by utilizing primary instruments to protect against uncertainty in future exchange rates between particular foreign currencies and the euro. We have exposure associated with the time delay between entering into a contract, budget or forecast and the realization thereof. To minimize economic exposure related to currency fluctuations, currencies on the balance sheet will be matched to the cash flows on an annual basis to ensure the availability of at least 12 months of liquidity per currency per the approved budget. The impact of fair value measurements on the financial statements is limited. At December 31, 2025 our net position of financial instruments denominated in U.S. Dollars was a net asset of € 4,067,000 (2024: net asset of € 5,898,000). Foreign currency denominated receivables and trade payables are short term in nature (generally 30 to 45 days). As a result foreign exchange rate movements on receivables and trade payables, during the years presented had an immaterial effect on the financial statements. Our interest rate risk exposure is limited due to the use of loans with fixed rates. At December 31, 2025, we had a loan with a fixed interest rate, totaling € 4,872,000 (2024: several loans totaling € 4,582,000). Credit Risk Credit risk represents the risk of financial loss caused by default of the counterparty. We have no large receivables balances with external parties, except with Lilly. Our principal financial assets are cash and cash equivalents including a money market fund which are, in line with our cash policy, placed at banks which meet our defined minimum credit ratings. Liquidity Risk Management forecasts our liquidity requirements to ensure that there is sufficient cash to meet operational needs. We believe that our existing cash and cash equivalents will enable us to fund our operating expenses and capital expenditure requirements into mid-2027. We have based this estimate on assumptions that may prove to be wrong, and we could use our capital resources sooner than we currently expect.

A. [Reserved] Not applicable. B. Capitalization and Indebtedness Not applicable. C. Reasons for the Offer and Use of Proceeds Not applicable. D. Risk Factors You should consider carefully the risks and uncertainties described below, together with all of the other information in this Annual Report, including the financial statements and the related notes included elsewhere in this Annual Report. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that adversely affect our business. If any of the following risks actually occurs, our business, financial condition, results of operations, and future prospects could be materially and adversely affected. Risks Related to Our Capital Needs and Financial Position We are a biopharmaceutical company with a history of losses. We expect to continue to incur significant losses for the foreseeable future and may never achieve or maintain profitability, which could result in a decline in the market value of our ordinary shares. We are a biopharmaceutical company with a limited operating history, engaged in the discovery and development of RNA-based therapeutics with our proprietary Axiomer RNA editing platform technology which could be used to develop new product candidates across multiple therapeutic areas. Since our inception in February 2012, we have devoted a significant portion of our resources to the development of our product candidates in inherited retinal disorders, including sepofarsen for Leber Congenital Amaurosis (“LCA”), ultevursen for Usher syndrome, and QR-1123 for autosomal dominant retinitis pigmentosa (“adRP”). Past resources have also been expended for the development of QR-504a for Fuchs endothelial corneal dystrophy, and eluforsen for cystic fibrosis, for which we have ceased making investments, and QR-313 for epidermolysis bullosa, which we have spun off. In August 2022 we announced our strategy to exclusively focus our resources on the development of our RNA editing platform. As a result, we have ended the clinical development of sepofarsen and ultevursen, which we have sold to Laboratoires Théa S.A.S. (“Théa”) in December 2023. In December 2025, we have started phase 1 clinical development of our lead product candidate AX-0810 targeting na-taurocholate cotransporting polypeptide (“NTCP”), which is being developed for treatment of cholestatic diseases. Significant resources are allocated for this clinical development program. We have had significant operating losses since our inception. Our net losses for the years ended December 31, 2025, December 31, 2024 and December 31, 2023 were, € 42,184,000, € 27,763,000 and € 27,735,000, respectively. At December 31, 2025, we had an accumulated deficit of € 467,506,000. Substantially all of our losses have resulted from expenses incurred in connection with our research and development 8 Table of Contents programs and from general and administrative costs associated with our operations. Our RNA editing platform is still in early stages of development and we are subject to the risks of failure inherent in the development of novel technologies and product candidates based on novel technologies. To date, the only material income we have generated has been from the receipt of government research grants and collaboration agreements. Our ability to generate revenue from product sales depends upon our ability to successfully develop candidates with our RNA editing platform, subsequently obtain regulatory approval for these candidates and successfully commercialize them and any other product candidates that we might develop, in-license or acquire in the future, enter into new collaboration agreements and generate milestone and royalty payments under existing or future collaboration agreements. Even if we are able to successfully achieve regulatory approval for our product candidates, we do not know when any of these product candidates will generate revenue for us, if at all. We have not generated, and do not expect to generate, any product revenue for the foreseeable future, and we expect to continue to incur significant operating losses for the foreseeable future due to the cost of research and development of both RNA editing platform and product candidates, preclinical studies and clinical trials and the regulatory approval process for product candidates. The amount of future losses is uncertain. Our ability to achieve profitability, if ever, will depend on, among other things, our ability to develop product candidates with our RNA editing platform, us or any current or future collaborators successfully developing product candidates, obtaining regulatory approvals to market and commercialize product candidates, manufacturing any approved products on commercially reasonable terms, establishing a sales and marketing organization or suitable third party alternatives for any approved product and raising sufficient funds to finance business activities. If we or any current or future collaborators are unable to develop and commercialize one or more of our product candidates or if sales revenue from any product candidate that receives approval is insufficient, we will not achieve profitability, which could have a material adverse effect on our business, financial condition, results of operations and prospects. Our ability to generate revenue from our product candidates also depends on a number of additional factors, including our ability to: ● successfully complete development activities, including the ongoing and planned preclinical and clinical studies for our product candidates; ● complete and submit New Drug Applications (“NDAs”) to the FDA, Marketing Authorization Applications (“MAAs”) to the EMA, and comparable applications to other regulatory authorities and obtain regulatory approval for indications for which there is a commercial market; ● set a commercially viable price for any products for which we may receive approval; ● obtain commercial quantities of our products at acceptable cost levels; ● develop a commercial organization capable of sales, marketing and distribution for any product that we might intend to sell ourselves in the markets in which we have retained commercialization rights; ● find suitable partners to help us market, sell and distribute our approved products that we do not intend to sell ourselves in one or more markets; ● achieve acceptance among patients, clinicians and advocacy groups for any product we develop; and ● obtain coverage and adequate reimbursement for our products from third parties, including government payors. In addition, because of the numerous risks and uncertainties associated with product development, including the risk that our product candidates may not advance through development, as has been the case for product candidates for which we have suspended or ceased development activities, or be shown to be not safe and effective for their intended uses, the FDA, the EMA or other regulatory agencies may require additional clinical trials or preclinical studies or impose post-approval requirements for product candidates that do advance through development. 9 Table of Contents We are unable to predict the timing or amount of increased expenses, or when or if we will be able to achieve or maintain profitability. Even if we are able to complete the processes described above, we anticipate incurring significant costs associated with commercializing our product candidates. In February, 2018, we entered into an agreement with Foundation Fighting Blindness (“FFB”), under which FFB has provided funding of $ 6.8 million to advance ultevursen into the clinic. Pursuant to the terms of the agreement, we were obligated to make certain repayments to FFB subject to development milestones. In December 2023, upon the occurrence of the sale of ultevursen to Théa, these payables were settled by means of a lump-sum payment in the amount of € 1.13 million and a percentage of earn-out payments for milestones and sales to be received by us from Théa, ranging from 5-10%. Even if we are able to generate revenues from the sale of any of our product candidates or receive royalties from any of our collaboration partners, we may not become profitable and may need to obtain additional funding to continue operations. If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce our operations, which could result in a decline in the market value of our ordinary shares. We will require additional capital to fund our operations and if we fail to obtain necessary financing, we will not be able to complete the development and commercialization of our product candidates. Our operations have consumed substantial amounts of cash since inception. We expect to continue to spend substantial amounts of cash to conduct further research and development, including with respect to our Axiomer platform, and preclinical testing and clinical trials of our product candidates, to seek regulatory approvals for our product candidates and to launch and commercialize any product candidates for which we receive regulatory approval, including potentially building our own commercial organization to serve the U.S., the EU and certain other markets. As at December 31, 2025, we had € 92,413,000 in cash and cash equivalents. Based on our current operating plans, we believe that such existing cash and cash equivalents will be sufficient to fund our anticipated level of operations into mid-2027. However, our future capital requirements and the period for which our existing resources will support our operations may vary significantly from what we expect. Our monthly spending levels will vary based on new and ongoing development and corporate activities. Because the length of time and activities associated with successful development of our RNA editing platform and product candidates is highly uncertain, we are unable to estimate the actual funds we will require for development and any approved marketing and commercialization activities relating to product candidates. Further, changing circumstances, some of which may be beyond our control, could cause us to consume capital significantly faster than we currently anticipate, and we may need to seek additional funds sooner than planned. Our future funding requirements, both near and long-term, will depend on many factors, including, but not limited to: ● the preclinical and clinical development plans we establish for our product candidates; ● the number and characteristics of product candidates that we develop or may in-license; ● the extent to which we in-license or acquire rights to other products, product candidates or technologies; ● the number and characteristics of programs that we may pursue in our innovation unit, including the development of RNA editing platform; ● the achievement of milestones that trigger payments under our existing or future collaboration agreements; ● our ability to establish collaboration arrangements for the development of our product candidates on favorable terms, if at all; ● the outcome, timing and cost of meeting regulatory requirements established by the FDA, the EMA and other comparable foreign regulatory authorities; ● the cost of filing, prosecuting, defending and enforcing our patent claims and other intellectual property rights; 10 Table of Contents ● the cost of defending any intellectual property disputes, including patent infringement actions brought by third parties against us or our product candidates; ● the effect of competing technological and market developments; ● the cost and timing of completion of commercial-scale outsourced manufacturing activities; and ● the cost of establishing sales, marketing and distribution capabilities for any product candidates for which we may receive regulatory approval in regions where we choose to commercialize our products on our own. We cannot be certain that additional funding will be available on acceptable terms, or at all. For instance, the trading prices for our ordinary shares and for other biopharmaceutical companies have been highly volatile. As a result, we may face difficulties raising capital through sales of our equity or debt securities or such sales may be on unfavorable terms. Similarly, adverse market or macroeconomic conditions or market volatility resulting from global economic developments, geopolitical developments, high inflation, rising interest rates, international tariffs, trade protection measures, economic sanctions, potential for significant changes in U.S. policies or regulatory environment, future public health epidemics or other factors, could materially and adversely affect our ability to consummate an equity or debt financing on favorable terms, or at all. If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may have to significantly delay, scale back or discontinue the development or commercialization of one or more of our products or product candidates or one or more of our other research and development initiatives such as our RNA editing platform. In order to raise additional capital, we may seek a combination of private and public equity offerings, debt financings, strategic partnerships and alliances and licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, existing ownership interests may be diluted and the terms of such financings may include liquidation or other preferences that adversely affect the rights of existing shareholders. We also could be required to seek collaborators for one or more of our current or future product candidates at an earlier stage than otherwise would be desirable or on terms that are less favorable than might otherwise be acceptable or relinquish or license on unfavorable terms our rights to technologies or product candidates that we otherwise would seek to develop or commercialize ourselves. While we were founded in 2012, we announced our plans to refocus our business on our RNA editing platform in 2022, and it may be difficult to assess the future viability of our business and our strategy. We were founded in February 2012 and began operations in May 2012, since which time we have primarily focused our efforts on development activities for our product candidates, including acquiring and developing product and technology rights and entering into collaborations. We have revised our strategy from time to time, including most recently in August 2022 when we announced our plan to focus exclusively on our RNA editing platform, therewith withdrawing from the ophthalmology space. Consequently, any predictions about our future success, performance or viability may not be as accurate as they could be if we had a longer operating history, more experience with research and development initiatives and clinical development or approved products on the market. We or third parties upon whom we depend may be adversely affected by natural disasters, geopolitical developments and/or global health pandemics, and our business, financial condition and results of operations could be adversely affected. The occurrence of unforeseen or catastrophic events, including extreme weather events and other natural disasters, man-made disasters, or the emergence of epidemics or pandemics, acts of war, or geopolitical events, such as the ongoing conflict between Russia and Ukraine, depending on their scale, may cause different degrees of damage to the national and local economies, such as recessions, rising interest rates, inflation, fuel prices fluctuations, foreign currency fluctuations, international tariffs, boycotts, curtailment of trade and other business restrictions, and could cause a disruption in our operations and have a material adverse effect on our financial condition and results of operations. Man-made disasters, pandemics, and other events connected with the regions in which we operate could have similar effects. If a natural disaster, health pandemic, or other event beyond our control occurred that prevented us from using all or a significant portion of our office and/or lab spaces, damaged critical infrastructure, such as our manufacturing facilities or our manufacturing facilities of our third-party contract manufacturers, or that otherwise disrupted operations or supplies, it may be difficult for us to continue our business for a substantial period of time. 11 Table of Contents Increased attention to, and evolving expectations for, environmental, social, and governance (“ESG”) initiatives could increase our costs, harm our reputation, or otherwise adversely impact our business. Companies across industries are facing increasing scrutiny from a variety of stakeholders related to their ESG and sustainability practices, including the recent “anti-ESG” sentiment in the United States. Investor advocacy groups, certain institutional investors, investment funds, and other influential investors have increasingly focused on ESG practices and have placed increasing importance on the non-financial impacts of their investments. Expectations regarding voluntary ESG initiatives and disclosures may result in increased costs (including but not limited to increased costs related to compliance, stakeholder engagement, contracting and insurance), enhanced compliance or disclosure obligations, or other adverse impacts to our business, financial condition, or results of operations. While we may at times engage in voluntary initiatives (such as voluntary disclosures, certifications, or goals, among others) to improve the ESG profile of the Company, such initiatives may be costly and may not have the desired effect and may not meet the expectations of all stakeholders, particularly since various stakeholders may take opposing views on the topic of ESG. Moreover, we may not be able to successfully complete such voluntary initiatives due to factors that are within or outside of our control. Even if this is not the case, our actions may subsequently be determined to be insufficient by various stakeholders, and we may be subject to investor or regulator engagement on ESG efforts, even if such initiatives are currently voluntary. Certain market participants, including major institutional investors and capital providers, use third-party benchmarks and scores to assess companies’ ESG profiles in making investment or voting decisions. Unfavorable ESG ratings could lead to increased negative investor sentiment towards us, which could negatively impact our share price as well as our access to and cost of capital. In addition, in recent years “anti-ESG” sentiment has gained momentum across the United States, with several states and Congress having proposed or enacted “anti-ESG” policies, legislation, or initiatives or issued related legal opinions, and the President having recently issued an executive order opposing diversity equity and inclusion (DEI) initiatives in the private sector. Such anti-ESG and anti-DEI-related policies, legislation, initiatives, litigation, legal opinions, and scrutiny could result in us facing additional compliance obligations, becoming the subject of investigations and enforcement actions, or sustaining reputational harm. Therefore, to the extent we take actions that are seen as positive to some investors, other investors may take issue with such actions or face regulatory pressure to refrain from investing in, or divest from, our business. To the extent ESG matters negatively impact our reputation, it may also impede our ability to compete as effectively to attract and retain employees, which may adversely impact our operations. In addition, we expect there will likely be increasing levels of regulation, disclosure-related and otherwise, with respect to ESG matters. For example, the SEC has published propose rules that would require companies to provide significantly expanded climate-related disclosures in their periodic reporting. The new climate disclosure rules were the subject of multiple legal challenges, and the SEC voluntarily stayed the climate disclosure rules pending the completion of judicial review. Therefore, it is unknown whether the new rules will go into effect and if they do, whether there will be significant changes. If the new rules go into effect and are not substantially different than the rules adopted by the SEC, we may be required to incur significant additional costs to comply, including the implementation of significant additional internal controls processes and procedures regarding matters that have not been subject to such controls in the past, and impose increased oversight obligations on our management and board of directors. Even if the SEC rules are not adopted, states or ex-U.S. jurisdictions in which we currently or may in the future operate may also have or adopt ESG or climate-related disclosure rules requiring similar or broader disclosure obligations. These and other changes in stakeholder expectations will likely lead to increased costs as well as scrutiny that could heighten all of the risks identified in this risk factor. Additionally, our business partners may be subject to similar expectations, which may augment or create additional risks, including risks that may not be known to us. 12 Table of Contents Risks Related to the Development and Regulatory Approval of our Product Candidates Our business depends in part on the success of our programs and product candidates, which are currently in different stages of preclinical and clinical development. We cannot be certain that we will be able to successfully complete the clinical development of, obtain regulatory approval for, or successfully commercialize our product candidates. Our business depends in part on our ability to develop, secure regulatory approval for and commercialize one or more product candidates, including any product candidates resulting from our initial pipeline programs using our Axiomer technology, including our lead program AX-0810 for cholestatic diseases targeting NTCP. However, the development of drug candidates is lengthy, uncertain and expensive, and there can be no assurance that we will achieve such goals. For example, in the past, we have focused our efforts on the development of product candidates in our ophthalmology portfolio and, previously, for cystic fibrosis, none of which we are planning to continue developing at this time. In February 2022, we announced that top-line results from our Phase 2/3 pivotal trial of sepofarsen did not meet its primary endpoint. In August 2022, we announced our strategy to shift our focus and resources exclusively to the development of our RNA editing platform, ending the clinical development of sepofarsen and ultevursen and ultimately ending all activity related to the broader ophthalmology portfolio. In December 2023, we have sold the assets sepofarsen and ultevursen to Théa, which Théa is developing further. The clinical trials and manufacturing and marketing of our future product candidates will be subject to extensive and rigorous review and regulation by numerous government authorities in the U.S., the EU and other jurisdictions where we intend to test and, if approved, market our product candidates. Before obtaining regulatory approvals for the commercial sale of any product candidate, we must demonstrate through preclinical testing and clinical trials that the product candidate is safe and effective for use in each target indication, and potentially in specific patient populations, including the pediatric population. This process can take many years and may include post-marketing studies and surveillance, which would require the expenditure of substantial resources beyond our existing funds. Of the large number of drugs in development for approval in the U.S. and the EU, only a small percentage successfully complete the FDA or EMA regulatory approval processes, as applicable, and are commercialized. Accordingly, even if we are able to obtain the requisite financing to continue to fund our research, development and clinical programs, we cannot be certain that any of our product candidates will be successfully developed or commercialized. In addition, the advancement of sepofarsen or ultevursen or QR-1011 by Théa or a third party, commencement of new clinical programs of our product candidates in the future, and/or the successful clinical development, regulatory approval and commercialization of any of these product candidates would require additional or new preclinical and clinical testing and substantial additional or new clinical development and regulatory approval efforts before we are permitted to commence their commercialization, if ever. It would be several years before a pivotal trial could be completed for any of such other product candidates, if ever. In October 2025, we announced that the Dutch authorities had approved our clinical trial authorization application for a Phase 1 study of AX-0810 in healthy volunteers. In December 2025 we dosed the first healthy volunteer in this study. We may not be able to file INDs or IND amendments or similar applications to commence clinical trials of our product candidates on the timelines we expect, and even if we are able to, the FDA or similar foreign regulatory authority may not permit us to proceed. We may not be able to file INDs or similar applications for our product candidates on the timelines we expect. For example, we may experience manufacturing delays or other delays with IND-enabling studies. Moreover, we cannot be sure that submission of an IND or similar application will result in the FDA or similar foreign regulatory authority allowing clinical trials to begin, or that, once begun, issues will not arise that result in the suspension or termination of clinical trials. Additionally, even if such regulatory authorities agree with the design and implementation of the clinical trials set forth in an IND or similar application, we cannot guarantee that such regulatory authorities will not change their requirements in the future. These considerations apply to new clinical trials we may submit as amendments to existing INDs or to a new IND or similar application. Any failure to file INDs or similar applications on the timelines we expect or to obtain authorization to begin our trials may prevent us from completing our clinical trials or commercializing our products on a timely basis, if at all. 13 Table of Contents The regulatory approval processes of the FDA, the EMA and comparable foreign regulatory authorities are lengthy, time-consuming and inherently unpredictable, and if we are ultimately unable to obtain regulatory approval for our product candidates, our business will be substantially harmed. We are not permitted to market our product candidates in the U.S. or the EU until we receive an NDA approval from the FDA or an MAA approval from the European Commission, respectively, or in any other foreign countries until we receive the requisite approval from such countries. Prior to submitting an NDA to the FDA or an MAA to the EMA for approval of any product candidate, we will need to complete preclinical and toxicology studies, as well as proof-of-concept studies and Phase 1, Phase 2 and Phase 3 clinical trials for such candidate. While we intend to submit marketing applications for our product candidates that successfully complete clinical development, there can be no assurance that we will be able to do so in a timely manner or at all. Successfully initiating and completing clinical programs and obtaining approval of an NDA or an MAA is a complex, lengthy, expensive and uncertain process, and the FDA, the EMA or other comparable foreign regulatory authorities may delay, limit or deny approval of our product candidates for many reasons, including, among others: ● we may not be able to demonstrate that our product candidates are safe and effective in treating patients; ● the results of our clinical trials may not meet the level of statistical or clinical significance required; ● regulatory authorities may disagree with the number, design, size, conduct or implementation of our clinical trials; ● regulatory authorities may require that we conduct additional clinical trials, including pivotal trials; ● regulatory authorities or other applicable foreign regulatory agencies may not approve the formulation, labeling or specifications of our product candidates; ● the CROs that we retain to conduct our clinical trials may take actions outside of our control that materially adversely impact our clinical trials; ● regulatory authorities may find the data from preclinical studies and clinical trials insufficient to demonstrate that the clinical and other benefits of our products outweigh their safety risks; ● regulatory authorities may disagree with our interpretation of data from our preclinical studies and clinical trials; ● regulatory authorities may not accept data generated at our clinical trial sites; ● regulatory authorities may recommend against approval of our NDAs or MAAs may require, as a condition of approval, additional preclinical studies or clinical trials, limitations on approved labeling or distribution and use restrictions; ● the FDA may require development of a Risk Evaluation and Mitigation Strategy as a condition of approval or post-approval, and the EMA may grant only conditional approval or impose specific obligations as a condition for marketing authorization, or may require us to conduct post-authorization safety studies; ● regulatory authorities may not approve the manufacturing processes or facilities of third-party manufacturers with which we contract; or ● regulatory authorities may change their approval policies or adopt new regulations. Any of these factors, many of which are beyond our control, could jeopardize our ability to obtain regulatory approval for and successfully market our product candidates. Any such setback in our pursuit of regulatory approval would have a material adverse effect on our business and prospects. 14 Table of Contents We may never realize a return on our investment of resources and cash from our drug discovery collaborations. In addition to developing our own pipeline of product candidates, we also conduct drug discovery activities for or with collaborators who are also engaged in drug discovery and development, which could include pre-commercial biotechnology companies and large pharmaceutical companies. Under these collaborations, we might provide the benefit of our drug discovery platform and platform experts who identify molecules that have activity against one or more specified targets, among other resources. In consideration, we have received, and might receive in the future, (i) equity investments; (ii) upfront fees; and/or (iii) the right to receive option fees, cash milestone payments upon the achievement of specified development, regulatory, or commercial sales milestones for the drug discovery targets, and potential royalties. Our ability to receive fees and payments and realize returns from our drug discovery collaborations in a timely manner, or at all, is subject to a number of risks, including but not limited to the following: ● our collaborators may incur unanticipated costs or experience delays in completing, or may be unable to complete, the development and commercialization of any drug candidates; ● collaborators have significant discretion in determining the amount and timing of efforts and resources that they will apply to our collaborations and may not perform their obligations as expected; ● collaborators may decide not to pursue development or commercialization of drug candidates for various reasons, including results of clinical trials or other studies, changes in the collaborator’s strategic focus or available funding, their desire to develop products that compete directly or indirectly with our drug candidates, or external factors (such as an acquisition or industry slowdown) that divert resources or create competing priorities; ● existing collaborators and potential future collaborators may begin to perceive us to be a competitor more generally, particularly as we advance our internal drug discovery programs, and therefore may be unwilling to continue existing collaborations, or enter into new collaborations, with us; ● a collaborator may fail to comply with applicable regulatory requirements regarding the development, manufacture, distribution, or marketing of a drug candidate or product; ● a collaborator with marketing and distribution rights to one or more products may not commit sufficient resources to the marketing and distribution of such product or products; ● disagreements with collaborators, including disagreements over intellectual property or proprietary rights, contract interpretation, or the preferred course of development, might cause delays or terminations of the research, development, or commercialization of drug candidates, or might result in litigation or arbitration; ● collaborators may not properly obtain, maintain, enforce, defend, or protect our or their intellectual property or proprietary rights, or they may use our proprietary information in such a way as to potentially lead to disputes or legal proceedings that could jeopardize or invalidate our or their intellectual property or proprietary rights; ● collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates; ● collaborators may infringe, misappropriate, or otherwise violate the intellectual property or proprietary rights of third parties, which may expose us to litigation and potential liability; and ● drug discovery collaborations may be terminated prior to our receipt of any significant value. 15 Table of Contents Failures or delays in the commencement or completion of our preclinical studies or planned or future clinical trials of our future product candidates could result in increased costs to us and could delay, prevent or limit our ability to generate revenue and continue our business. Successful completion of preclinical studies and clinical trials is a prerequisite to submitting an NDA to the FDA or an MAA to the EMA and, consequently, the ultimate approval and commercial marketing of our product candidates. Clinical trials are expensive, difficult to design and implement, can take many years to complete and are uncertain as to outcome. A product candidate can unexpectedly fail at any stage of clinical development. The historical failure rate for product candidates is high due to scientific feasibility, safety, efficacy, changing standards of medical care and other variables. We do not know whether our future clinical trials will begin or be completed on schedule, if at all, as the commencement and completion of clinical trials can be delayed or prevented for a number of reasons, including, among others: ● delays in reaching or failing to reach agreement on acceptable terms with prospective CROs and trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; ● inadequate quantity or quality of a product candidate or other materials necessary to conduct clinical trials; ● difficulties obtaining Institutional Review Board (“IRB”) or ethics committee approval to conduct a clinical trial at a prospective site or sites, or where applicable, institutional biosafety committee (“IBC”) approval; ● challenges in recruiting and enrolling patients to participate in clinical trials, including the size and nature of the patient population, the proximity of patients to clinical sites, eligibility criteria for the clinical trial, the nature of the clinical trial protocol, the availability of approved effective treatments for the relevant disease and competition from other clinical trial programs for similar indications; ● severe or unexpected drug-related side effects experienced by patients in our clinical trials or by individuals using drugs similar to our product candidates; ● reports from preclinical or clinical testing of other RNA therapies that raise safety or efficacy concerns; ● difficulties retaining patients who have enrolled in a clinical trial but may be prone to withdraw due to lack of efficacy, side effects, personal reasons or loss of interest; or ● force majeure events. Clinical trials may also be delayed or terminated as a result of ambiguous or negative interim results. In addition, a clinical trial may be suspended or terminated by us, the FDA, the EMA, the IRBs at the sites where the IRBs are overseeing a clinical trial, upon recommendation of a data safety monitoring board (“DSMB”) overseeing the clinical trial at issue, or by other regulatory authorities due to a number of factors, including, among others: ● failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols; ● inspection of the clinical trial operations or trial sites by the FDA, the EMA or other regulatory authorities that reveals deficiencies or violations that require us to undertake corrective action, including the imposition of a clinical hold; ● unforeseen safety issues, including any that could be identified in our ongoing toxicology studies, adverse side effects or lack of effectiveness; ● changes in government regulations, administrative actions, or policy; ● problems with clinical supply materials; and 16 Table of Contents ● lack of adequate funding to continue the clinical trial. Positive results from early-stage clinical trials and preclinical testing of our product candidates are not necessarily predictive of the results of later clinical trials for these product candidates. If we cannot achieve positive results in our later stage clinical trials for our product candidates, we may be unable to successfully develop, obtain regulatory approval for and commercialize them. We may from time to time publish results from preclinical studies and clinical trials of our product candidates. Positive results from early-stage clinical trials and preclinical testing of our product candidates in vitro and in vivo may not necessarily be predictive of the results from later-stage clinical trials. Many companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in later-stage clinical trials after achieving positive results in preclinical and early-stage clinical trials, and we cannot be certain that we will not face similar setbacks. These setbacks have been caused by, among other things, preclinical findings that emerged while clinical trials were already underway or safety or efficacy observations made in clinical trials, including adverse events. Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that believed their product candidates performed satisfactorily in preclinical studies and clinical trials nonetheless failed to obtain FDA or European Commission approval. If we fail to produce positive results in our clinical trials for any product candidates, the development timeline and regulatory approval and commercialization prospects for those product candidates, and, correspondingly, our business and financial prospects would be materially adversely affected. Our phase 1 clinical trial for AX-0810 is being conducted in healthy volunteers. Results observed in healthy volunteers do not automatically translate to patients with cholestatic diseases. Therefore, there is a risk that safety and target engagement observed in healthy volunteers will not be observed in subsequent studies in patients. Additionally, some of our clinical trials have utilized and may in the future utilize an “open-label” trial design. An open-label clinical trial is one where both the patient and investigator know whether the patient is receiving the investigational product candidate or either an existing approved drug or placebo. Most typically, open-label clinical trials test only the investigational product candidate and sometimes may do so at different dose levels. Open-label clinical trials are subject to various limitations that may exaggerate any therapeutic effect as patients in open-label clinical trials are aware when they are receiving treatment. Open-label clinical trials may be subject to a patient bias where patients perceive their symptoms to have improved merely due to their awareness of receiving an experimental treatment. Moreover, patients selected for early clinical studies often include the most severe sufferers and their symptoms may have been bound to improve notwithstanding the new treatment. In addition, open-label clinical trials may be subject to an investigator bias where those assessing and reviewing the physiological outcomes of the clinical trials are aware of which patients have received treatment and may interpret the information of the treated group more favorably given this knowledge. The results from an open-label trial may not be predictive of future clinical trial results with any of our product candidates when studied in a controlled environment with a placebo or active control. Changes in regulatory requirements or guidance from the FDA, EMA or other applicable regulatory authorities, or unanticipated events during our preclinical or clinical development activities may occur, which may result in changes to requirements, which could result in increased costs to us and could delay our development timeline. Changes in regulatory requirements, or guidance from the FDA, EMA, or other applicable regulatory authorities, imposition of additional preclinical or clinical study requirements by applicable regulatory authorities or unanticipated events during our preclinical or clinical development may compel us to amend study protocols or conduct additional studies or trials, or otherwise lead to delays in our preclinical and clinical studies and overall development strategy, all of which could result in increased costs for the development of our product candidates. We may experience delays if we are required by the FDA, EMA, or other applicable regulatory authorities, or if we voluntarily decide to, redesign or restructure a clinical trial once initiated. Amendments to our clinical trial protocols may require resubmission to the applicable regulatory authorities and IRBs or ethics committees for review and approval, which may adversely impact the cost, timing and/or successful completion of a clinical trial. We may be delayed in our clinical development if we are unable to obtain alignment with the FDA, EMA, or other applicable regulatory authorities on an acceptable clinical trial design or statistical analysis plan for any of our clinical trials. Additionally, the FDA, EMA, or other applicable regulatory authorities may require us to conduct additional clinical trials, including pivotal trials, to support a marketing application. If we experience delays completing, or if we terminate, any of our clinical trials, or if we are required to conduct additional clinical trials, 17 Table of Contents the commercial prospects for our product candidates may be harmed and our ability to generate product revenue will be delayed. Our RNA technologies are unproven in the disease indications for which they are being developed and tested and may not lead to the development of, or result in, marketable products. We are developing an RNA editing platform and a pipeline of product candidates using our proprietary Axiomer RNA editing technology for genetic disorders with unmet need. We believe that editing at the RNA level to, for example, restore the production of functional protein is a unique approach that offers advantages versus small molecule, gene therapy and other therapeutic approaches. However, the scientific research that forms the basis of our efforts to develop product candidates is preliminary, ongoing, and yet to be clinically validated. The mechanism of action of our compounds could be different from what we today hypothesize. Also, we may discover that the molecules that we develop do not possess certain properties required for a drug to be effective, such as the ability to remain stable in the human body for the period of time required for the drug to reach the target tissue or the ability to cross the cell wall and enter into cells within the target tissue for effective delivery. We may spend substantial funds attempting to introduce these properties and may never succeed in doing so. For example, while we have discovered and are developing our novel RNA editing platform and will focus our resources exclusively on this RNA editing platform, there can be no assurance that we will be able to leverage our technology to create viable product candidates to advance into the clinic, or develop those candidates to submit for regulatory approval. In addition, product candidates based on RNA technologies may demonstrate different chemical and pharmacological properties in humans than they do in laboratory studies or animals. Even if our product candidates have successful results in animal studies, they may not demonstrate the same chemical and pharmacological properties in humans and may interact with human biological systems or other existing treatments in unforeseen, ineffective or harmful ways. Our RNA technologies may provoke an unwanted immune response, or immunogenicity, which may neutralize the therapeutic effects of our product candidates and could result in harmful outcomes for patients. As a result, we may never succeed in developing a marketable product, and in turn we may not become profitable and the value of our ordinary shares would decline. While there are a number of approved therapies based on the oligonucleotide modality, there are no approved therapies based on the editing technology underlying our novel editing mechanism which uses Adenosine Deaminase Acting on RNA (“ADAR”). This may increase the complexity, uncertainty and length of the development and regulatory approval process for our product candidates. Neither we nor any future collaborator may receive approval to market and commercialize any product candidate. Even if we or a collaborator were to obtain regulatory approval, the approval may be for disease indications or patient populations that are not as broad as we intended or may require labeling that includes significant use or distribution restrictions or safety warnings. We or a collaborator may be required to perform additional or unanticipated clinical trials to obtain approval or be subject to post-marketing testing requirements to maintain regulatory approval. If our RNA technology proves to be ineffective, unsafe or commercially unviable, our entire platform and pipeline would have little, if any, value, which would have a material adverse effect on our business, financial condition, results of operations and prospects. Failure to obtain regulatory approval in jurisdictions outside the United States and the European Union would prevent our product candidates from being marketed in those jurisdictions. In order to market and sell our products in jurisdictions other than the U.S. and the EU, we must obtain separate marketing approvals and comply with numerous and varying regulatory requirements. The regulatory approval process outside the U.S. and the EU generally includes all of the risks associated with obtaining FDA and European Commission approval, but can involve additional testing. We may need to partner with third parties in order to obtain approvals outside the U.S. and the EU. In addition, in many countries worldwide, it is required that the product be approved for reimbursement before the product can be approved for sale in that country. We may not obtain approvals from regulatory authorities outside the U.S. and the EU on a timely basis, if at all. Even if we were to receive approval in the U.S. or the EU, approval by the FDA or the European Commission does not ensure approval by regulatory authorities in other countries or jurisdictions. Similarly, approval by one regulatory authority outside the U.S. and the EU would not ensure approval by regulatory authorities in other countries or jurisdictions or by the FDA or the European Commission. We may not be able to file for marketing approvals and may not receive necessary approvals to commercialize our products in any market. If we are unable to obtain approval of our product candidates by regulatory authorities in other foreign jurisdictions, the commercial prospects of those product candidates may be significantly diminished, and our business prospects could decline. 18 Table of Contents A breakthrough therapy designation by the FDA for our product candidates may not lead to a faster development or regulatory review or approval process, and it does not increase the likelihood that our product candidates will receive marketing approval. We may seek a breakthrough therapy designation for our product candidates in the future. A breakthrough therapy is defined as a drug that is intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over available therapies on one or more clinically significant endpoints. For product candidates that have been designated as breakthrough therapies, interaction and communication between the FDA and the sponsor of the trial can help to identify the most efficient path for clinical development while minimizing the number of patients placed in ineffective control regimens. Product candidates designated as breakthrough therapies by the FDA may also be eligible for accelerated approval. Designation as a breakthrough therapy is within the discretion of the FDA. Accordingly, even if we believe that any of our product candidates meets the criteria for designation as a breakthrough therapy, the FDA may disagree and instead determine not to make such designation. While the FDA has released guidance as to the criteria it uses in designating drugs as breakthrough therapies, we cannot be sure that our product candidates will meet the FDA’s qualifying criteria for such designation. In any event, the receipt of a breakthrough therapy designation for a product candidate may not result in a faster development process, review or approval compared to drugs considered for approval under conventional FDA procedures and also does not assure ultimate approval by the FDA. In addition, even if one or more of our product candidates qualify as breakthrough therapies, the FDA may later decide that the products no longer meet the conditions for such qualification or decide that the time period for FDA review or approval will not be shortened. We may seek designation for our Axiomer RNA editing platform as a designated platform technology, but we might not receive such a designation, and even if we do, such a designation may not lead to a faster development, regulatory review or approval process. We may seek designation for our Axiomer RNA editing platform as a designated platform technology. Under the Food and Drug Omnibus Reform Act of 2022 (“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 biologics license application (“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. Even if we believe our Axiomer platform meets the criteria for such designation, the FDA may disagree and instead determine not to grant such designation. In addition, the receipt of such designation for a platform technology does not ensure that a drug will be developed more quickly, be reviewed by the FDA faster, or receive FDA approval. Moreover, the FDA may revoke a designation if the FDA determines that a designated platform technology no longer meets the criteria for such designation. Our therapeutic candidates are based on a novel mechanism of action, which makes it difficult to predict the time and cost of development and of subsequently obtaining regulatory approval, if at all. Although we have discovered and are developing our novel RNA editing platform and will focus our resources exclusively on this RNA editing platform, as announced as part of our strategy update in August 2022, there can be no assurance that we will be able to leverage our technology to create viable product candidates to advance into and through clinical development, or develop those candidates to submit for regulatory approval. In addition, product candidates based on RNA technologies may demonstrate different chemical and pharmacological properties in humans than they do in laboratory studies or animals. Even if our product candidates have successful results in animal studies, they may not demonstrate the same chemical and pharmacological properties in humans and may interact with human biological systems or other 19 Table of Contents existing treatments in unforeseen, ineffective or harmful ways. Our RNA technologies may provoke an unwanted immune response, or immunogenicity, which may neutralize the therapeutic effects of our product candidates and could result in harmful outcomes for patients. As a result, we or our partners may never succeed in developing a marketable product based on our platform, and in turn we may not become profitable and the value of our ordinary shares would decline. Furthermore, the FDA and the EMA have relatively limited experience with therapeutics based on RNA. This may increase the complexity, uncertainty and length of the regulatory approval process for our product candidates. Neither we nor any future collaborator may receive approval to market and commercialize any product candidate. Even if we or a collaborator were to obtain regulatory approval, the approval may be for disease indications or patient populations that are not as broad as we intended or may require labeling that includes significant use or distribution restrictions or safety warnings. We, or a collaborator, may be required to perform additional or unanticipated clinical trials to obtain approval or be subject to post-marketing testing requirements to maintain regulatory approval. If our RNA technology proves to be ineffective, unsafe or commercially unviable, our entire platform and pipeline would have little, if any, value, which would have a material adverse effect on our business, financial condition, results of operations and prospects. Risks Related to Our Dependence on Third Parties If a collaborative partner terminates or fails to perform its obligations under an agreement with us, the development and commercialization of our product candidates, if approved, could be delayed or terminated. We are party to, and we may from time to time in the future pursue, collaborative arrangements for the development and commercialization of product candidates, if approved. We have executed and continue to consider strategic alternatives that include spinouts, out-licensing or collaborative partnerships to develop and commercialize our RNA technologies, including our Axiomer program, or programs. For example, in 2021, we entered into a licensing and research collaboration agreement with Lilly, as amended in 2022, which expanded our collaboration, focused on the discovery, development, and commercialization of potential new medicines primarily in the peripheral nervous system (“PNS”) and central nervous system (“CNS”) and metabolic diseases, and in 2024, we announced a new research partnership with the Rett Syndrome Research Trust (“RSRT”) focused on utilizing Axiomer to develop editing oligonucleotides (“EONs”) targeting an underlying genetic variant that causes Rett syndrome, a rare neurodevelopment disorder, which is included on our pipeline as AX-2402. If any of our collaborative partners in future collaborative arrangements for the commercialization of product candidates or similar arrangements does not devote sufficient time and resources to the collaboration arrangement with us, we may not realize the potential commercial benefits of the arrangement, and our results of operations may be materially adversely affected. In addition, if any such collaboration partner were to breach or terminate its arrangements with us, the commercialization of our product candidates could be delayed, curtailed or terminated. Much of the potential revenue from current and future collaborations may consist of contingent payments, such as payments for achieving regulatory milestones or royalties payable on sales of drugs. The milestone and royalty revenue that we may receive under these collaborations will depend upon our collaborators’ ability to successfully develop, introduce, market and sell new products. In addition, collaborators may decide to enter into arrangements with third parties to commercialize products developed under collaborations using our technologies, which could reduce the milestone and royalty revenue that we may receive, if any. Future collaboration partners may fail to develop or effectively commercialize products using our products or technologies because they: ● decide not to devote the necessary resources due to internal constraints, such as limited personnel with the requisite expertise, limited cash resources or specialized equipment limitations, or the belief that other drug development programs may have a higher likelihood of obtaining marketing approval or may potentially generate a greater return on investment; ● decide to pursue other technologies or develop other product candidates, either on their own or in collaboration with others, including our competitors, to treat the same diseases targeted by our own collaborative programs; ● do not have sufficient resources necessary to carry the product candidate through clinical development, marketing approval and commercialization; or ● cannot obtain the necessary marketing approvals. 20 Table of Contents Moreover, competition may negatively impact a partner’s focus on, and commitment to, our product candidates and, as a result, could delay or otherwise negatively affect the commercialization of such product candidate. The failure of any current or future collaboration partners to develop or effectively commercialize our product candidates, if approved, for any of these reasons would have a material adverse effect on our operating results and financial condition. For sepofarsen and ultevursen, we will depend on Théa to develop, conduct and continue clinical trials with, obtain regulatory approvals for, and if approved, market and sell these product candidates. We may also pursue similar relationships with other development and commercialization collaborators for additional product candidates in the future or expand the reach with current collaborators. If such collaborators fail to perform as expected, the potential for us to generate future revenue from such product candidates would be significantly reduced and our business would be harmed. For certain product candidates, we depend, or will depend, on our development and commercial collaborators to develop, conduct clinical trials of, and, if approved, commercialize product candidates. Our current collaborations and any future collaborations that we enter into are subject to numerous risks, including: ● collaborators have significant discretion in determining the efforts and resources that they will apply to the collaborations; ● collaborators may not perform their obligations as expected or fail to fulfill their responsibilities in a timely manner, or at all; ● collaborators may not pursue development and commercialization of any product candidates that achieve regulatory approval or may elect not to continue or renew development or commercialization programs based on preclinical studies or clinical trial results, changes in the collaborators’ strategic focus or available funding or external factors, such as an acquisition, that divert resources or create competing priorities; ● collaborators may delay preclinical studies or clinical trials, provide insufficient funding for clinical trials, stop a preclinical study or clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing; ● we may not have access to, or may be restricted from disclosing, certain information regarding product candidates being developed or commercialized under a collaboration and, consequently, may have limited ability to inform our shareholders about the status of such product candidates; ● collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; ● the collaborations may not result in product candidates to develop and/or preclinical studies or clinical trials conducted as part of the collaborations may not be successful; ● product candidates developed with collaborators may be viewed by our collaborators as competitive with their own product candidates or products, which may cause collaborators to stop commercialization of our product candidates; ● a collaborator with marketing and distribution rights to one or more of our product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of any such product candidate; and ● collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation. 21 Table of Contents In addition, certain collaboration and commercialization agreements provide our collaborators with rights to terminate such agreements, which rights may or may not be subject to conditions, and which rights, if exercised, would adversely affect our product development efforts and could make it difficult for us to attract new collaborators. In that event, we would likely be required to limit the size and scope of efforts for the development and commercialization of such product candidates or products; we would likely be required to seek additional financing to fund further development or identify alternative strategic collaborations; our potential to generate future revenue from royalties and milestone payments from such product candidates or products would be significantly reduced, delayed or eliminated; and it could have an adverse effect on our business and future growth prospects. Our rights to recover tangible and intangible assets and intellectual property rights needed to advance a product candidate or product after termination of a collaboration may be limited by contract, and we may not be able to advance a program post-termination. We rely on third-party manufacturers and suppliers and we continue to rely on third parties to produce preclinical, clinical and, if approved, commercial supplies of our product candidates. We rely on third parties to supply the materials and components for, and manufacture, our research and development, preclinical and clinical trial supplies. We do not own manufacturing facilities or supply sources for such components and materials. There can be no assurance that our supply of research and development, preclinical and clinical development drugs and other materials will not be limited, interrupted, restricted in certain geographic regions or of satisfactory quality or continue to be available at acceptable prices. In particular, any replacement of our drug product formulation manufacturer could require significant effort and expertise because there may be a limited number of qualified replacements. The manufacturing process for a product candidate is subject to FDA, EMA and other foreign regulatory authority review. Suppliers and manufacturers must meet applicable manufacturing requirements and undergo rigorous facility and process validation tests required by regulatory authorities in order to comply with regulatory standards such as current Good Manufacturing Practice (“cGMP”). In the event that any of our suppliers or manufacturers fails to comply with such requirements or fails to perform its obligations to us in relation to quality, timing or otherwise, or if our supply of components or other materials becomes limited or interrupted for other reasons, we may be forced to manufacture the materials ourselves, for which we currently do not have the capabilities or resources, or enter into an agreement with another third party, which we may not be able to do on reasonable terms, if at all. In some cases, the technical skills or technology required to manufacture our product candidates may be unique or proprietary to the original manufacturer and we may have difficulty, or there may be contractual restrictions prohibiting us from, transferring such skills or technology to another third party and a feasible alternative may not exist. These factors would increase our reliance on such manufacturer or require us to obtain a license from such manufacturer in order to have another third party manufacture our product candidates. If we are required to change manufacturers for any reason, we will be required to verify that the new manufacturer maintains facilities and procedures that comply with quality standards and with all applicable regulations and guidelines. We will also need to verify, such as through a manufacturing comparability study, that any new manufacturer or manufacturing process will produce our product candidate according to the specifications previously submitted to the FDA, the EMA or another regulatory authority. The delays associated with the verification of a new manufacturer or manufacturing process could negatively affect our ability to develop product candidates in a timely manner or within budget. We expect to continue to rely on third party manufacturers if we receive regulatory approval for any product candidate. To the extent that we have existing, or enter into future, manufacturing arrangements with third parties, we will depend on these third parties to perform their obligations in a timely manner consistent with contractual and regulatory requirements, including those related to quality control and assurance. If we are unable to obtain or maintain third-party manufacturing for product candidates, or to do so on commercially reasonable terms, we may not be able to develop and commercialize our product candidates successfully. Our or a third party’s failure to execute on our manufacturing requirements could adversely affect our business in a number of ways, including but not limited to: ● an inability to initiate or continue preclinical studies or clinical trials of product candidates under development; ● delay in submitting regulatory applications, or receiving regulatory approvals, for product candidates; ● loss of the cooperation of a collaborator; 22 Table of Contents ● subjection of our product candidates to additional inspections by regulatory authorities; ● requirements to cease distribution or to recall batches of our product candidates; and ● in the event of approval to market and commercialize a product candidate, an inability to meet commercial demands for our products. If third parties on which we depend to conduct our preclinical and clinical studies do not perform as contractually required, fail to satisfy regulatory or legal requirements or miss expected deadlines, our development programs could be delayed with materially adverse effects on our business, financial condition, results of operations and prospects. We rely on CROs and consultants to design, conduct, supervise and monitor preclinical studies for our product candidates and expect to rely on CROs, clinical data management organizations, institutions, and clinical investigators for the conduct of our future clinical trials. We and our CROs are required to comply with various regulations, including Good Laboratory Practices (“GLP”) and Good Clinical Practices (“GCP”) which are enforced by the FDA, and guidelines of the Competent Authorities of the Member States of the European Economic Area (“EEA”) and comparable foreign regulatory authorities to ensure that the health, safety and rights of patients are protected in clinical development, and that study data integrity is assured. Regulatory authorities ensure compliance with these requirements through periodic inspections of study sponsors, principal investigators and study sites. If we or any of our investigators or CROs fail to comply with applicable requirements, the data generated in our studies may be deemed unreliable and the FDA, the EMA or other comparable foreign regulatory authorities may require us to perform additional studies. We cannot be certain that upon inspection by a given regulatory authority, such regulatory authority will determine that any of our studies comply with such requirements. Our CROs are not our employees, and except for remedies available to us under our agreements with such CROs, we cannot control whether or not they devote sufficient time and resources to our ongoing studies. If CROs do not successfully carry out their contractual duties or obligations or meet expected deadlines or if the quality or accuracy of the study data they obtain is compromised due to their failure to adhere to our protocols, regulatory requirements or for other reasons, our preclinical or clinical studies may be extended, delayed or terminated. Because we have relied and continue to rely on third parties, our internal capacity to perform these functions is limited. Outsourcing these functions involves a risk that third parties may not perform to our standards, may not produce results in a timely manner or may fail to perform at all. In addition, the use of third-party service providers requires us to disclose our proprietary information to these parties, which could increase the risk that this information will be misappropriated. We currently have a relatively small number of employees, which limits the internal resources we have available to identify and monitor our third-party service providers. To the extent we are unable to identify and successfully manage the performance of third-party service providers in the future, our business may be adversely affected. Even though we carefully manage our relationships with our CROs, there can be no assurance that we will not be impacted by this type of challenges or delays in the future or that these delays or challenges will not have a material adverse impact on our business, financial condition and prospects. Regional or single-source dependencies may in some cases accentuate these risks. For example, the pharmaceutical industry generally, and in some instances our collaborators or other third parties depend on China-based suppliers or service providers for certain raw materials, products and services, or other activities. The ability of our collaborators or such other third parties to continue to engage these China-based suppliers or service providers for certain preclinical research programs and clinical development programs could be restricted due to geopolitical developments between the United States and China, including as a result of the escalation of tariffs or other trade restrictions or if the federal legislation known as the BIOSECURE Act (or a similar law) were to impose procurement restrictions that have a material impact on our ability to contract with certain China-based suppliers. In any such circumstances, we may not be able to engage a backup or alternative supplier or service provider in a timely manner or at all. This, in turn, could materially and adversely affect our or our collaborators’ ability to manufacture or supply marketed products and product candidates or advance our or our collaborators' preclinical research or clinical development programs, which could materially and adversely affect our business and future prospects. If we cannot contract with acceptable third parties on commercially reasonable terms, or at all, or if these third parties do not carry out their contractual duties, satisfy legal and regulatory requirements for the conduct of preclinical or clinical studies or meet expected deadlines, our studies could be delayed and otherwise adversely affected. In all events, we are 23 Table of Contents responsible for ensuring that each of our studies is conducted in accordance with the general investigational plan and protocols for the trial. Our relationships with customers and third-party payors will be subject to applicable anti-kickback, fraud and abuse and other healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm and diminished profits and future earnings. Healthcare providers, physicians and third-party payors play a primary role in the recommendation and prescription of any product candidates for which we obtain marketing approval. Our future arrangements with third-party payors and customers may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we market, sell and distribute our products for which we obtain marketing approval. As a biopharmaceutical company, even though we do not and will not control referrals of healthcare services or bill directly to Medicare, Medicaid or other third-party payors, certain federal and state healthcare laws and regulations pertaining to fraud and abuse and patients’ rights are and will be applicable to our business. Restrictions under applicable federal and state healthcare laws and regulations that may affect our ability to operate include the following: ● the U.S. federal Anti-Kickback Statute prohibits, among other things, persons and entities from knowingly and willfully soliciting, offering, receiving 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, any good or service, for which payment may be made under a federal healthcare program such as Medicare and Medicaid. 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 False Claims Act (“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; ● federal civil and criminal false claims laws, including the FCA and civil monetary penalty laws, 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 U.S. federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) imposes 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; 24 Table of Contents ● HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”), also imposes obligations, including mandatory contractual terms, with respect to safeguarding 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”, being those independent contractors or agents of covered entities that create, receive, maintain, transmit or obtain protected health information in connection with providing a service on behalf of a covered entity. HITECH also created new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorneys’ fees and costs associated with pursuing federal civil actions. In addition, there may be additional federal, state and non-U.S. laws which govern the privacy and security of health and other personal 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; ● the U.S. Physician Payments Sunshine Act requires applicable manufacturers of covered drugs, devices, biologics and medical supplies to report annually to the Department of Health and Human Services (“HHS”) information related to direct or indirect payments and other transfers of value to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other licensed healthcare professionals (such as physician assistants, nurse practitioners, and others), and teaching hospitals, and ownership and investment interests held by physicians and their immediate family members; ● 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; and ● analogous state, local and foreign laws and regulations, such as state anti-kickback and false claims laws, may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by any third-party payors, including private insurers. Some state laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government and may require drug manufacturers to report information related to payments and other transfers of value to physicians and certain other healthcare providers or marketing expenditures. Additionally, state and foreign laws govern the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts. The distribution of biopharmaceutical products is subject to additional requirements and regulations, including extensive record-keeping, licensing, storage and security requirements intended to prevent the unauthorized sale of biopharmaceutical products. Comparable laws and regulations exist in the countries within the EEA and other countries where we may market our products in the future, including without limitation the United Kingdom (“UK”), Canada and Brazil. Although in the EEA such laws are partially based upon EU law, they may vary from country to country. Both healthcare and industry specific, as well as general EU and national laws, regulations and industry codes constrain, for example, our interactions with government officials and healthcare practitioners, and the handling of healthcare data. Non-compliance with any of these laws or regulations could lead to criminal or civil liability. Efforts to ensure that our business arrangements with third parties will comply with applicable healthcare laws and regulations will involve substantial costs. It is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations. If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, disgorgement, imprisonment, reputational harm, exclusion from government funded healthcare programs, such as Medicare and Medicaid, and the curtailment or restructuring of our operations, as well as additional reporting 25 Table of Contents obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws. If any physicians or other healthcare providers or entities with whom we expect to do business are found to not be in compliance with applicable laws, they may be subject to similar penalties. In addition, the approval and commercialization of any product candidate we develop outside the U.S. will also likely subject us to foreign equivalents of the healthcare laws mentioned above, among other foreign laws. All of these could harm our ability to operate our business and our financial results. Our employees may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could have a material adverse effect on our business. We are exposed to the risk of employee fraud or other misconduct. Misconduct by employees could include intentional failures to comply with FDA or EMA regulations or similar regulations of other foreign regulatory authorities, to provide accurate information to the FDA, the EMA or other foreign regulatory authorities, to comply with certain manufacturing standards, to comply with U.S. federal and state healthcare fraud and abuse laws and regulations and similar laws and regulations established and enforced by comparable foreign regulatory authorities, to report financial information or data accurately or to disclose unauthorized activities to us. In particular, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements. Employee misconduct could also involve the improper use of information obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to our reputation. We have adopted and implemented a Code of Business Conduct and Ethics, but it is not always possible to identify and deter employee misconduct, and the precautions we take to detect and prevent this activity, such as employee training on enforcement of the Code of Business Conduct and Ethics, may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions and any imposition of significant fines or other sanctions could have a significant impact on our business and results of operations. Our collaboration partnerships with pharmaceutical companies are important to our business. If these companies do not successfully develop drugs pursuant to these agreements, our business could be adversely affected. Under the amended and restated research and collaboration agreement which we entered into with Lilly in December 2022, Lilly has been granted certain exclusive and non-exclusive rights to our Axiomer platform IP to exploit compounds and develop and commercialize products based on this platform. Should Lilly decide not to pursue or be unable to pursue further development and subsequent commercialization, we would not be able to receive milestone payments or royalty revenues associated with this partnership, which could have a substantial impact on our revenue. Changes in tariffs and other governmental trade policies could negatively affect our business and results of operations. Recent governmental actions and proposals relating to tariffs and other trade policies have created uncertainty about future trading arrangements and the possibility of imposing or increasing tariffs on certain goods. For example, certain governments (including the United States and other countries where we source goods or components) have imposed or may impose tariffs on a wide range of products, raw materials, and intermediate goods. Additional tariffs, or retaliatory measures by other countries in response, may be implemented at any time. Should these or similar tariffs remain in place (or be re-imposed or increased), or if additional tariffs or trade restrictions are enacted in the future, they could cause us to face higher supply costs, delays, or a need to switch suppliers. These actions could adversely affect our margins, profitability, financial condition, and results of operations. While we have not experienced adverse impacts of tariffs to date, we cannot predict future changes in trade policy or the terms of any renegotiated trade agreements, nor can we determine the impact they may have on our business. Any such changes could have a material adverse effect on our business, financial condition, and results of operations. 26 Table of Contents Risks Related to Our Intellectual Property We may become involved in legal proceedings with third parties that infringe our intellectual property rights, the outcome of which would be uncertain and could have a material adverse effect on the success of our business. We may from time to time become involved in legal proceedings challenging our intellectual property rights, including with respect to Axiomer. For example, one or more third parties may seek to invalidate these intellectual property rights. Our success will depend in part on our ability to obtain, maintain and enforce patent protection for our inventions. We may not be able to successfully prosecute the patent applications. If patents are issued or granted, we may fail to maintain these patents due to oppositions and/or other post grant procedures initiated by third parties, we may determine not to pursue litigation against other companies that are infringing these patents, or we may pursue litigation in a variety of ways. For example, we currently are facing oppositions in Australia and Europe with respect to patents relating to our Axiomer platform. If we are unsuccessful in defending our patents against these oppositions, we could lose patent protection for Axiomer and product candidates developed thereunder in these jurisdictions. Further, intellectual property rights may not provide us with complete exclusivity in the respective fields, which would allow for third parties to develop competing products and technologies, which could adversely affect our business and harm our prospects. Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements. Periodic maintenance fees on any issued patent are due to be paid to the United States Patent and Trademark Office (“U.S. PTO”) the European Patent Office (“EPO”) and other foreign patent agencies in several stages over the lifetime of the patent. The U.S. PTO, EPO and various foreign national or international patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process. While an inadvertent lapse can in many cases be rectified by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. Non-compliance events that could result in abandonment or lapse of patent rights include, but are not limited to, failure to timely file national and regional stage patent applications based on our international patent application, failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal documents. If we or our licensors fail to maintain the patents and patent applications covering our product candidates, our competitors might be able to enter the market, which would have a material adverse effect on our business. We or our licensors or any future collaborators or strategic partners may become subject to third party claims or litigation alleging infringement of patents or other proprietary rights or seeking to invalidate patents or other proprietary rights, and we may need to resort to litigation to protect or enforce our patents or other proprietary rights, all of which could be costly, time consuming, delay or prevent the development and commercialization of our product candidates, or put our patents and other proprietary rights at risk. We or our licensors or any future collaborators or strategic partners may be subject to third-party claims for infringement or misappropriation of patent or other proprietary rights. We are generally obligated under our license or collaboration agreements to indemnify and hold harmless our licensors or collaborators for damages arising from intellectual property infringement by us. If we or our licensors, or any future collaborators or strategic partners, are found to infringe a third-party patent or other intellectual property rights, we could be required to pay damages, potentially including treble damages, if we are found to have willfully infringed. In addition, we or our licensors, or any future collaborators or strategic partners, may choose to seek, or be required to seek, a license from a third party, which may not be available on acceptable terms, if at all. Even if a license can be obtained on acceptable terms, the rights may be non-exclusive, which could give our competitors access to the same technology or intellectual property rights licensed to us. If we fail to obtain a required license, we or any future collaborator may be unable to effectively market product candidates based on our technology, which could limit our ability to generate revenue or achieve profitability and possibly prevent us from generating revenue sufficient to sustain our operations. In addition, we may find it necessary to pursue claims or initiate lawsuits to protect or enforce our patent or other intellectual property rights. The cost to us in defending or initiating any litigation or other proceeding relating to patent or other proprietary rights, even if resolved in our favor, could be substantial, and litigation would divert our management’s attention for a significant amount of time. Some of our competitors may be able to sustain 27 Table of Contents the costs of complex patent litigation more effectively than we can because they have substantially greater resources. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could delay our research and development efforts and limit our ability to continue our operations. Further, if we were to initiate legal proceedings against a third party to enforce a patent covering one of our products or our technology, the defendant could counterclaim that our patent is invalid or unenforceable. In patent litigation in the U.S. and in most European countries, defendant counterclaims alleging invalidity or unenforceability are commonplace. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, for example, lack of novelty, obviousness or non-enablement. Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant information from the U.S. PTO, or made a misleading statement, during prosecution. The outcome following legal assertions of invalidity and unenforceability during patent litigation is unpredictable. With respect to the validity question, for example, we cannot be certain that there is no invalidating prior art, of which we and the patent examiner were unaware during prosecution. If a defendant were to prevail on a legal assertion of invalidity or unenforceability, we would lose at least part, and perhaps all, of the patent protection on one or more of our products or certain aspects of our platform’s technology. Such a loss of patent protection could have a material adverse impact on our business. Patents and other intellectual property rights also will not protect our technology if competitors design around our protected technology without legally infringing our patents or other intellectual property rights. Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain and could have a material adverse effect on the success of our business. Our business depends upon our ability to develop, manufacture and, if approved, market and sell our product candidates, and to use our proprietary technologies without infringing the proprietary rights of third parties. We cannot guarantee that none of our product candidates, their manufacture, use, sale, offer for sale, or importation into the United States or into any country of the EEA will be held to infringe a third-party patent. As a result, we may become party to, or be threatened with, future adversarial proceedings or litigation regarding intellectual property rights with respect to our products and technology, including litigation in a Federal District court, or an interference or a post grant proceeding before the U.S. PTO or litigation in foreign courts or proceedings before foreign patent offices. Third parties may assert infringement claims against us based on existing patents or patents that may be granted in the future. Furthermore, in the event a thus far unidentified third party were to assert an infringement claim against us and we were ultimately found to infringe the third party’s intellectual property rights, we could be required to obtain a license from such third party to continue developing and commercializing our products and technology. However, we may not be able to obtain an appropriate license on commercially reasonable terms or at all. Even if we are able to obtain a license, it may be non-exclusive, thereby giving our competitors access to the same technologies licensed to us. We could be forced, including by court order, to cease commercializing the infringing technology or product. In addition, in any such proceeding or litigation, we could be found liable for monetary damages. A finding of infringement could prevent us from commercializing our product candidates or force us to cease some of our business operations, which could materially harm our business. Any claims by third parties that we have misappropriated their confidential information or trade secrets could have a similar negative impact on our business. If the third parties from whom we license patent rights do not properly or successfully obtain, maintain or enforce the patents underlying such licenses, or if they retain or license to others any competing rights, our competitive position and business prospects may be adversely affected. Our success will further depend in part on the ability of our licensors to obtain, maintain and enforce patent protection for our licensed intellectual property, regardless of the exclusive or non-exclusive nature of these rights. Our licensors may not successfully prosecute the patent applications licensed to us. Even if patents are issued or granted, our licensors may fail to maintain these patents, may determine not to pursue litigation against other companies that are infringing these patents, or may pursue litigation less aggressively than we would. Further, the license agreements may not provide us with a complete freedom to operate in the respective fields, which would allow for third parties to develop competing products. Without protection for, or exclusive right to, the intellectual property we license, other companies might be able to offer substantially identical products for sale, which could adversely affect our competitive business position and harm our business prospects. 28 Table of Contents If we are not able to adequately prevent disclosure of trade secrets and other proprietary information, the value of our technology and products could be significantly diminished. We rely on trade secrets to protect our proprietary technologies, especially where we do not believe patent protection is appropriate or obtainable. However, trade secrets are difficult to protect. We rely in part on confidentiality agreements with our employees, consultants, outside scientific collaborators, sponsored researchers, contract manufacturers, vendors and other advisors to protect our trade secrets and other proprietary information. These agreements may not effectively prevent disclosure of confidential information and may not provide an adequate remedy in the event of unauthorized disclosure of confidential information. In addition, we cannot guarantee that we have executed these agreements with each party that may have or has had access to our trade secrets. Any party with whom we have executed a confidentiality agreement may breach that agreement and disclose our proprietary information, including our trade secrets, and we may not be able to obtain adequate remedies for such breaches. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and time-consuming, and the outcome is unpredictable. In addition, some courts inside and outside the United States are less willing or unwilling to protect trade secrets. If any of our trade secrets were to be lawfully obtained or independently developed by a competitor, we would have no right to prevent them, or those to whom they disclose such trade secrets, from using that technology or information to compete with us. If any of our trade secrets were to be disclosed to or independently developed by a competitor or other third-party, our competitive position could be harmed. We may be subject to claims that we or our employees or consultants have wrongfully used or disclosed alleged trade secrets of our employees’ or consultants’ former employers or their clients. These claims may be costly to defend and if we do not successfully do so, we may be required to pay monetary damages and may lose valuable intellectual property rights or personnel. Many of our employees were previously employed at universities or biotechnology or pharmaceutical companies, including our competitors or potential competitors. Although no claims against us are currently pending, we may be subject to claims in the future that these employees or we have inadvertently or otherwise used or disclosed trade secrets or other proprietary information of their former employers. Litigation may be necessary to defend against these claims. If we fail in defending such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. A loss of key research personnel or their work product could compromise our ability to commercialize, or prevent us from commercializing, our product candidates, which could severely harm our business. Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to management. We may not be able to protect our intellectual property rights throughout the world. Filing, prosecuting and defending patents on all of our product candidates throughout the world would be prohibitively expensive. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and, further, may be able to export otherwise infringing products to territories where we have patent protection but where enforcement is not as strong as that in the United States. These products may compete with our products in jurisdictions where we do not have any issued patents and our patent claims or other intellectual property rights may not be effective or sufficient to prevent them from so competing. Many companies have encountered significant problems in protecting and defending intellectual property rights in certain foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents and other intellectual property protection, particularly those relating to biopharmaceuticals, which could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally. For example, the Special 301 Report (April 2022) from the Office of the United States Trade Representative identified a number of countries, including India and China, where challenges to the procurement and enforcement of patent rights have been reported. Several countries, including India and China, have been listed in the report every year since 1989. As a result, proceedings to enforce our patent rights in certain foreign jurisdictions could result in substantial cost and divert our efforts and attention from other aspects of our business. 29 Table of Contents Risks Related to the Commercialization of Our Product Candidates If any of our product candidates are approved for marketing and commercialization and we are unable to develop sales, marketing and distribution capabilities on our own or enter into agreements with third parties to perform these functions on acceptable terms, we will be unable to successfully commercialize any such future products. Even if any of our product candidates are approved, we currently have no sales, marketing or distribution capabilities or experience. In addition, we intend to consider out-licensing, spinouts or collaborative partnerships to develop and commercialize our RNA technologies or programs. If any of our product candidates are approved, we will need to enter into collaborations with third parties to provide sales, marketing and distribution capabilities to commercialize such products or develop these capabilities internally, which would be expensive and time-consuming. If we decide to rely on third parties with such capabilities to market our products or decide to co-promote products with collaborators, we will need to establish and maintain marketing and distribution arrangements with such third parties, and there can be no assurance that we will be able to enter into such arrangements on acceptable terms or at all. In entering into third-party marketing or distribution arrangements, any revenue we receive will depend upon the efforts of the third parties and there can be no assurance that such third parties will have adequate sales and distribution capabilities for our products or be successful in gaining market acceptance of any approved product. If we decide to market our products directly, we would need to commit significant financial and managerial resources to develop a marketing and sales force with technical expertise and supporting distribution, administration and compliance capabilities. If we are not successful in commercializing any product approved in the future, either on our own or through third parties, our business, financial condition, results of operations and prospects could be materially adversely affected. We face competition from entities that have developed or may develop product candidates for our target indications. If these companies develop technologies or product candidates more rapidly than we do or their technologies, including delivery technologies, are more effective, our ability to develop and successfully commercialize. whether on our own or with a collaborator, our product candidates may be adversely affected. The development and commercialization of drugs is highly competitive. We compete with a variety of multinational pharmaceutical companies and specialized biotechnology companies, as well as technology being developed at universities and other research institutions. Our competitors have developed, are developing or may develop product candidates and processes competitive with our product candidates. Competitive therapeutic treatments include those that have already been approved and accepted by the medical community and any new treatments that may enter the market. We believe that a significant number of products are currently under development, and may become commercially available in the future, for the treatment of conditions for which we may try to develop product candidates. An overview of potential competitors is included in Item 4.B: “Business Overview - Competition”. Many of our competitors possess significantly greater financial, technical, manufacturing, marketing, sales and supply resources or experience than us. If we successfully obtain approval for any product candidate, we may face competition based on many different factors, including the safety and effectiveness of our products, the ease with which our products can be administered and the extent to which patients accept relatively new routes of administration, the timing and scope of regulatory approvals for these products, the availability and cost of manufacturing, marketing and sales capabilities, price, reimbursement coverage and patent position. Competing products could present superior treatment alternatives, including being more effective, safer, less expensive or marketed and sold more effectively than any products we may develop. Competitive products may make any products we develop obsolete or noncompetitive before we recover the expense of developing and commercializing our product candidates. Such competitors could also recruit our employees, which could negatively impact our level of expertise and our ability to execute our business plan. Furthermore, in our clinical studies we could be competing for the same patient population, resulting in a smaller population of suitable candidates and possibly delays and additional costs. 30 Table of Contents Even if we are able to commercialize any of our product candidates, whether on our own or with a collaborator, the products may not receive coverage and adequate reimbursement from third-party payors, which could harm our business. The availability of reimbursement by governmental and private payors is essential for most patients to be able to afford expensive treatments. Sales of any of our product candidates, if approved, by us or a collaborator will depend substantially on the extent to which the costs of these product candidates will be paid by health maintenance, managed care, pharmacy benefit and similar healthcare management organizations, or reimbursed by government health administration authorities, private health coverage insurers and other third-party payors. If reimbursement is not available, or is available only to limited levels, we or our collaborators may not be able to successfully commercialize any product candidate. Even if coverage is provided, the approved reimbursement amount may not be high enough to allow us to establish or maintain pricing sufficient to realize a sufficient return on our investment. There is significant uncertainty related to the insurance coverage and reimbursement of newly approved products. In the United States, the principal decisions about reimbursement for new medicines are typically made by the Centers for Medicare & Medicaid Services (“CMS”), an agency within the U.S. Department of Health and Human Services, as CMS decides whether and to what extent a new medicine will be covered and reimbursed under Medicare. Private payors tend to follow CMS to a substantial degree. It is difficult to predict what CMS will decide with respect to reimbursement for fundamentally novel products such as ours, as there is no body of established practices and precedents for these new products. Moreover, reimbursement agencies in Europe may be more conservative than CMS. For example, a number of cancer drugs have been approved for reimbursement in the United States and have not been approved for reimbursement in certain European countries. Factors payors consider in determining reimbursement are based on whether the product is: (i) a covered benefit under its health plan; (ii) safe, effective and medically necessary; (iii) appropriate for the specific patient; (iv) cost-effective; and (v) neither experimental nor investigational. The intended use of a drug product by a physician can also affect pricing. For example, a Local or National Coverage Determination administrative procedure at CMS, under which the agency or its administrative contractors determine which uses of a therapeutic product would and would not be covered and paid by Medicare. This determination process can be lengthy, thereby creating a long period during which the future reimbursement for a particular product may be uncertain. Outside the U.S., particularly in Member States of the EU, the pricing of prescription products is subject to governmental control. In these countries, pricing negotiations or the successful completion of health technology assessment procedures with governmental authorities can take considerable time after receipt of marketing approval for a product. In addition, there can be considerable pressure by governments and other stakeholders on prices and reimbursement levels, including as part of cost containment measures. Certain countries allow companies to fix their own prices for medicines, but monitor and control company profits. Political, economic and regulatory developments may further complicate pricing negotiations, and pricing negotiations may continue after reimbursement has been obtained. Reference pricing used by various EU Member States and parallel distribution, or arbitrage between low-priced and high-priced Member States, can further reduce prices. In some countries, we or our collaborators may be required to conduct a clinical trial or other studies that compare the cost-effectiveness of our RNA technology candidates to other available therapies in order to obtain or maintain reimbursement or pricing approval. Publication of discounts by third-party payors or authorities may lead to further pressure on the prices or reimbursement levels within the country of publication and other countries. If reimbursement of any product candidate approved for marketing is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, our business, financial condition, results of operations or prospects could be adversely affected. Moreover, efforts by governmental and other third-party payors, in the U.S. and abroad, to cap or reduce healthcare costs may cause such organizations to limit both coverage and level of reimbursement for new products approved and, as a result, they may not cover or provide adequate payment for our product candidates. We expect to experience pricing pressures in connection with the sale, whether by us or a collaborator, of any of our product candidates due to the trend toward managed healthcare, the increasing influence of health maintenance organizations and additional legislative changes. The downward pressure on healthcare costs in general, particularly prescription drugs and surgical procedures and other treatments, has become very intense. As a result, increasingly high barriers are being erected to the entry of new products. 31 Table of Contents Even if we receive marketing approval for any of our product candidates, they may not achieve broad market acceptance, which would limit the revenue that we generate from its sales. The commercial success of any of our product candidates, if approved by the FDA, the EMA or other regulatory authorities, will depend upon the awareness and acceptance of the product among the medical community, including physicians, patients, patient advocacy groups and healthcare payors. Market acceptance of any of our product candidates, if approved, will depend on a number of factors, including, among others: ● our product candidates’ demonstrated ability to treat patients and to provide patients with incremental therapeutic benefits, as compared with other available treatments; ● the relative convenience and ease of administration of our product candidates, including as compared with other treatments for patients; ● the prevalence and severity of any adverse side effects; ● limitations or warnings contained in the labeling approved for our product candidates by the FDA, the EMA or other regulatory authorities; ● availability of alternative treatments; ● pricing and cost effectiveness; ● the effectiveness of our sales and marketing strategies or those of our collaborators; ● our, or our collaborators’, ability to increase awareness of our product candidates through marketing efforts; ● our ability to obtain sufficient third-party coverage or reimbursement; and ● the willingness of patients to pay out-of-pocket in the absence of third-party coverage. Recently enacted and future legislation, including potentially unfavorable pricing regulations or other healthcare reform initiatives, may increase the difficulty and cost for us to obtain marketing approval of, and commercialize, our product candidates and may negatively affect the prices we may obtain. 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 product candidates profitably, if approved. In the United States, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (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 Affordable Care Act (“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 substantial new provisions intended to broaden access to health insurance, reduce or constrain the growth of health care spending, enhance remedies against healthcare fraud and abuse, add new 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, 32 Table of Contents 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 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 will 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. Since its enactment, there have been numerous judicial, administrative, executive, and legislative 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 U.S. 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 Inflation Reduction Act of 2022 (“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. 33 Table of Contents 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. 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 most-favored-nation (“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 Global Benchmark for Efficient Drug Pricing Model (“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 Guarding U.S. Medicare Against Rising Drug Costs (“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 GENErating cost reductions for U.S. Medicaid (“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. Further, legislative and regulatory proposals have been made to expand post-approval requirements and restrict sales and promotional activities for pharmaceutical products. We cannot be sure whether additional legislative changes will be enacted, or whether FDA regulations, guidance or interpretations will be changed, or what the impact of such changes on the marketing approvals, if any, of our product candidates, may be. In addition, increased scrutiny by the U.S. Congress of the FDA’s approval process may significantly delay or prevent marketing approval, as well as subject us to more stringent product labeling and post-marketing conditions and other requirements. Individual states in the U.S. have also become increasingly aggressive in passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some 34 Table of Contents cases, designed to encourage importation from other countries and bulk purchasing. Legally mandated price controls on payment amounts by third-party payors or other restrictions could harm our business, results of operations, financial condition and prospects. In addition, regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other healthcare programs. This could reduce the ultimate demand for our products or put pressure on our product pricing, which could negatively affect our business, results of operations, financial condition and prospects. In the EU, similar political, economic and regulatory developments may affect our, or our collaborators’, ability to profitably commercialize our current or any future products. In addition to continuing pressure on prices and cost containment measures, legislative developments at the EU or Member State level may result in significant additional requirements or obstacles that may increase our operating costs. The delivery of healthcare in the EU, including the establishment and operation of health services and the pricing and reimbursement of medicines, is almost exclusively a matter for national, rather than EU, law and policy. National governments and health service providers have different priorities and approaches to the delivery of health care and the pricing and reimbursement of products in that context. In general, however, the healthcare budgetary constraints in most EU Member States have resulted in restrictions on the pricing and reimbursement of medicines by relevant health service providers. Coupled with ever-increasing EU and national regulatory burdens on those wishing to develop and market products, this could prevent or delay marketing approval of our product candidates, restrict or regulate post-approval activities and affect our, or our collaborators’, ability to commercialize any products for which we obtain marketing approval. In international markets, reimbursement and healthcare payment systems vary significantly by country, and many countries have instituted price ceilings on specific products and therapies. There have been, and likely will continue to be, legislative and regulatory proposals at the foreign, federal and state levels directed at broadening the availability of healthcare and containing or lowering the cost of healthcare. For example, the U.S. Supreme Court’s June 2024 decision in Loper Bright Enterprises v. Raimondo overturned the longstanding Chevron doctrine, under which courts were required to give deference to regulatory agencies’ reasonable interpretations of ambiguous federal statutes. The Loper decision could result in additional legal challenges to regulations and guidance issued by federal agencies, including the FDA, on which we rely. Any such legal challenges, if successful, could have a material impact on our business. Additionally, the Loper decision may result in increased regulatory uncertainty, inconsistent judicial interpretations, and other impacts to the agency rulemaking process, any of which could adversely impact our business and operations. We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the U.S. or abroad. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our products. Such reforms could have an adverse effect on anticipated revenue from product candidates that we may successfully develop and for which we may obtain regulatory approval and may affect our overall financial condition and ability to develop product candidates. Even if any of our product candidates receive regulatory approval, they may still face future development and regulatory difficulties and we will be subject to extensive post-approval regulatory requirements and review. If we obtain regulatory approval for any of our product candidates, we and any approved product candidates would be subject to extensive ongoing requirements and review by the FDA, the EMA and foreign regulatory authorities governing the manufacture, quality control, further development, labeling, packaging, storage, distribution, safety surveillance, import, export, advertising, promotion, recordkeeping and reporting of safety and other post-market information. The safety profile of any product will continue to be closely monitored by the FDA, the EMA and comparable foreign regulatory authorities after approval. If the FDA, the EMA or comparable foreign regulatory authorities become aware of new safety information after approval of any of our product candidates, these regulatory authorities may require labeling changes or establishment of a risk management strategy, impose significant restrictions on a product’s indicated uses or marketing, impose ongoing requirements for potentially costly post-approval studies or post-market surveillance or impose a recall. 35 Table of Contents In addition, manufacturers of therapeutic products and their facilities are subject to continual review and periodic inspections by the FDA, the EMA and other regulatory authorities for compliance with cGMP regulations. For certain commercial prescription drug products, manufacturers and other parties involved in the supply chain must also meet chain of distribution requirements and build electronic, interoperable systems for product tracking and tracing and for notifying the FDA of counterfeit, diverted, stolen and intentionally adulterated products or other products that are otherwise unfit for distribution in the United States. If we or a regulatory agency discover previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, or problems with the facility where the product is manufactured, a regulatory agency may impose restrictions on that product, the manufacturing facility or us, including requiring recall or withdrawal of the product from the market or suspension of manufacturing. If we, our product candidates or the manufacturing facilities for our product candidates fail to comply with applicable regulatory requirements, a regulatory agency may, among other things: ● issue untitled letters or warning letters; ● mandate modifications to promotional materials or require us to provide corrective information to healthcare practitioners; ● require us to enter into a consent decree, which can include imposition of various fines, reimbursements for inspection costs, required due dates for specific actions and penalties for noncompliance; ● seek an injunction or impose civil or criminal penalties or monetary fines; ● suspend or withdraw regulatory approval; ● suspend any ongoing clinical studies; ● refuse to approve pending applications or supplements to applications filed by us; ● suspend or impose restrictions on operations, including costly new manufacturing requirements; or ● seize or detain products, refuse to permit the import or export of products, or require us to initiate a product recall. The occurrence of any event or penalty described above may inhibit our ability to commercialize our products or generate revenue. We are subject to anti-corruption laws, as well as export control laws, customs laws, sanctions laws and other laws governing our operations. If we fail to comply with these laws, we could be subject to civil or criminal penalties, other remedial measures and legal expenses, which could adversely affect our business, results of operations and financial condition. Our operations are subject to anti-corruption laws, including the U.K. Bribery Act 2010 (“Bribery Act”), the U.S. Foreign Corrupt Practices Act (“FCPA”) and other anti-corruption laws that apply in countries where we do business and may do business in the future. The Bribery Act, the FCPA and other similar laws generally prohibit us, our senior management, and our employees and intermediaries from bribing, being bribed or making other prohibited payments to government officials or other persons to obtain or retain business or gain some other business advantage. If we were to pursue sales, marketing or distribution activities in the future, we may operate in a number of jurisdictions that pose a high risk of potential Bribery Act or FCPA violations, and we may participate in collaborations and relationships with third parties whose actions could potentially subject us to liability under the Bribery Act, the FCPA or local anti-corruption laws. In addition, we cannot predict the nature, scope or effect of future regulatory requirements to which our international operations might be subject or the manner in which existing laws might be administered or interpreted. 36 Table of Contents We are also subject to other laws and regulations governing our international operations, including regulations administered by the governments of the UK and the U.S., and authorities in the EU, including applicable export control regulations, economic sanctions on countries and persons, customs requirements and currency exchange regulations, collectively referred to as the Trade Control laws, and anti-money laundering laws. There is no assurance that we will be completely effective in ensuring our compliance with all applicable anti-corruption laws, including the Bribery Act, the FCPA or other legal requirements, including Trade Control laws. If we are not in compliance with the Bribery Act, the FCPA, other anti-corruption laws, Trade Control laws or anti-money laundering laws, we may be subject to criminal and civil penalties, disgorgement and other sanctions and remedial measures, and legal expenses, which could have an adverse impact on our business, financial condition, results of operations and liquidity. Likewise, any investigation of any potential violations of the Bribery Act, the FCPA, other anti-corruption laws, Trade Control laws or anti-money laundering laws by U.K., U.S. or other authorities could also have an adverse impact on our reputation, our business, results of operations and financial condition. If we receive regulatory approvals and were to pursue sale, marketing or distribution activities ourselves, we may market our product candidates in multiple jurisdictions where we have limited or no operating experience and may be subject to increased business and economic risks that could affect our financial results. If we receive regulatory approvals, we may market our product candidates ourselves in jurisdictions where we have limited or no experience in marketing, developing and distributing our products. Certain markets have substantial legal and regulatory complexities that we may not have experience navigating. We would be subject to a variety of risks inherent in doing business internationally, including: ● risks related to the legal and regulatory environment in non-U.S. jurisdictions, including with respect to privacy and data security, and unexpected changes in laws, regulatory requirements and enforcement; ● burdens of complying with a variety of foreign laws in multiple jurisdictions; ● potential damage to our brand and reputation due to compliance with local laws; ● fluctuations in currency exchange rates; ● political, social or economic instability; ● difficulty of effective enforcement of contractual provisions in local jurisdictions; ● differences in local business culture and practices, difference in customer attitudes and tendencies and general differences in culture and local trends; ● the potential need to recruit and work through local partners; ● reduced protection for or increased violation of intellectual property rights in some countries; ● inadequate protection against unfair commercial use; ● difficulties in managing global operations and legal compliance costs associated with multiple international locations; ● compliance with the Bribery Act, the FCPA, the Organisation for Economic Co-operation and Development (“OECD”) Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, and similar laws in other jurisdictions; ● natural disasters, including earthquakes, tsunamis and floods; 37 Table of Contents ● inadequate local infrastructure; ● compliance with Trade Control laws and anti-money laundering laws; ● the effects of applicable foreign tax structures and potentially adverse tax consequences; and ● exposure to local banking, currency control and other financial-related risks. The FDA, the EMA and other regulatory agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses. If we are found to have improperly promoted off-label uses, we may become subject to significant liability. The FDA, the competent authorities of the EU Member States and other regulatory agencies strictly regulate the promotional claims that may be made about prescription products if approved. In particular, a product may not be promoted for uses that are not approved by the FDA, the EMA or other similar regulatory agencies as reflected in the product’s approved labeling. If we receive marketing approval for our product candidates, physicians may nevertheless prescribe them to their patients in a manner that is inconsistent with the approved label. If we are found to have promoted such off-label uses, we may become subject to significant liability. In the U.S., engaging in impermissible promotion of our products for off-label uses can also subject us to false claims litigation under federal and state statutes, which can lead to civil and criminal penalties and fines and agreements that materially restrict the manner in which we promote or distribute those products. These false claims statutes include the federal FCA, which allows any individual to bring a lawsuit against a pharmaceutical or medical device company on behalf of the federal government alleging submission of false or fraudulent claims, or causing to present such false or fraudulent claims, for payment by a federal program such as Medicare or Medicaid. If the government prevails in the lawsuit, the individual will share in any fines or settlement funds. These FCA lawsuits against pharmaceutical and medical device companies have led to substantial civil and criminal settlements, including elements such as fines or restitution, agreements to comply with burdensome reporting and compliance obligations, and exclusion from Medicare, Medicaid, and other federal and state healthcare programs. From time to time, legislation is drafted, introduced, passed in Congress and signed into law 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 the manner in which pharmaceutical products are regulated and marketed. If we do not lawfully promote our approved products, we may become subject to such litigation and, if we are not successful in defending against such actions, those actions may have a material adverse effect on our business, financial condition and results of operations. Adverse decisions of tax authorities or changes in tax treaties, laws, rules or interpretations could have a material adverse effect on our business, results of operations, financial condition and cash flows. The tax laws and regulations in the Netherlands, the jurisdiction of our incorporation and our current resident state for tax purposes, may be subject to change and there may be changes in enforcement of tax law. Additionally, European and other tax laws and regulations are complex and subject to varying interpretations. We cannot be sure that our interpretations are accurate or that the responsible tax authority agrees with our views. If our tax positions are challenged by the tax authorities, we could incur additional tax liabilities, which could increase our costs of operations and have a material adverse effect on our business, financial condition, and results of operations. Further changes in the tax laws of the jurisdictions in which we operate could arise as a result of the base erosion and profit shifting (“BEPS”) project being undertaken by the OECD The OECD, which represents a coalition of member countries that encompass certain of the jurisdictions in which we operate or in which we could choose to set up operations in the future, is undertaking studies and publishing action plans that include recommendations aimed at addressing what they believe are issues within tax systems that may lead to tax avoidance by companies. It is possible that the jurisdictions in which we do business could react to the BEPS initiative or their own concerns by enacting tax legislation that could adversely affect us or our shareholders through increasing our tax liabilities. 38 Table of Contents Risks Related to Our Organization, Structure and Operations Members of our Board and our principal shareholders and their affiliates have significant control over our company, which will limit other stakeholders’ ability to influence corporate matters and could delay or prevent a change in corporate control. The holdings of the members of our Board and our principal shareholders and their affiliates, represent significant ownership, in the aggregate, of our outstanding ordinary shares (as set out in “Item 7.A. Major Shareholders”). As a result, these shareholders, if they act together, will be able to influence our management and affairs and control the outcome of matters submitted to our shareholders for approval, including the election of members of our Board and any sale, merger, consolidation, or sale of all or substantially all of our assets. These shareholders may have interests, with respect to their ordinary shares, which are different from other investors and the concentration of voting power among these shareholders may have an adverse effect on the price of our ordinary shares. In addition, this concentration of ownership might adversely affect the market price of our ordinary shares by: ● delaying, deferring or preventing a change of control of our Company; ● impeding a merger, consolidation, takeover or other business combination involving our Company; or ● discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of our Company. Please see “Item 7.A. Major Shareholders” for more information regarding the ownership of our outstanding ordinary shares by our board and our principal shareholders and their affiliates. Any inability to attract and retain qualified key management and technical personnel would impair our ability to implement our business plan. Our success largely depends on the continued service of key management and other specialized personnel. The loss of one or more members of our board or other key employees or advisors could delay our research and development programs and materially harm our business, financial condition, results of operations and prospects. The relationships that our key managers have cultivated within our industry make us particularly dependent upon their continued employment with us. Moreover, we are dependent on the continued service of our technical personnel because of the highly technical nature of our product candidates and technologies and the specialized nature of the regulatory approval process. Because our board and key employees are not obligated to provide us with continued service, they could terminate their employment or services with us at any time without penalty, subject to providing any required advance notice. Our future success will depend in large part on our continued ability to attract and retain other highly qualified scientific, technical and management personnel, as well as personnel with expertise in clinical testing, manufacturing, governmental regulation and commercialization. It is noteworthy that for 2025 and onwards, given the increased and exclusive focus on the RNA editing technology platform, the fact that we seek to hire and attract personnel in a narrower field puts a higher risk factor on our ability to attract personnel. We face competition for personnel from other companies, universities, public and private research institutions, government entities and other organizations. In addition, our ability to attract new personnel in the United States of America may be impacted by restrictions on travel, changes to immigration policy or the availability of work visas under the current administration. We will need to maintain a good relationship with our employees to maintain our operations. A deterioration in our relationships with our employees could have an adverse impact on our business. Maintaining good relationships with our employees and operating effectively and efficiently across our organization are crucial to our operations and our success. If we are unable to successfully maintain such relationships or manage the uncertainty as a result of the reduction in the number of our residual workforce, and the complexity of operations, our business may be adversely affected. 39 Table of Contents We may experience difficulties in managing our growth and expanding our operations. We have limited experience in drug development. As our product candidates enter and advance through preclinical studies, we will need to expand our development, regulatory and manufacturing capabilities or contract with other organizations to provide these capabilities for us. In the future, we expect to have to manage additional relationships with collaborators or partners, suppliers and other organizations. Our ability to manage our operations and future growth will require us to continue to improve our operational, financial and management controls, reporting systems and procedures. We may not be able to implement improvements to our management information and control systems in an efficient or timely manner and may discover deficiencies in existing systems and controls. Data collection and use in the European Union is governed by restrictive regulations governing the use, processing, and cross-border transfer of personal information. We are subject to a number of laws and regulations relating to privacy and data protection, including, in relation to the EU, the General Data Protection Regulation (EU) 2016/679 (the “EU GDPR”) and, following the UK’s withdrawal from the EU, the EU GDPR as incorporated into UK laws (“UK GDPR” and together with the EU GDPR, “GDPR”). As the regulatory focus on privacy issues continues to increase and worldwide laws and regulations concerning the handling of personal data expand and become more complex (including in relation to privacy, the use of artificial intelligence (“AI”), the operation of digital platforms, and provision of digital services), we expect that potential risks related to data collection and use within the business may intensify. In addition, new laws or regulations governing privacy, security, the use of artificial intelligence, the provision of digital services, and data protection may be introduced which could apply in future. The nature and extent of such additions and changes in data protection laws or regulations, and the application to, or impact they may have on, the Company, is uncertain. The data protection laws applicable to us impact our ability to collect, augment, analyze, use, transfer and share personal data. For example, the GDPR, among other obligations and requirements: (i) imposes requirements relating to having a legal basis or condition for processing personal data and, where applicable, how an organization can collect and rely upon consent obtained from an individual to process their personal data; (ii) imposes obligations in relation to the provision of information to individuals relating to the processing of their personal data; (iii) requires organizations to notify personal data breaches to competent data protection authorities and/or individuals; (iv) imposes 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; (v) requiring data protection impact assessments for high risk processing; and (vi) taking certain measures when engaging third-party processors. The GDPR also grants individuals certain data protection rights, subject to certain limitations. Regulators can impose significant monetary fines for violations of laws and regulations relating to privacy and data protection. For example, non-compliance with certain obligations under the GDPR may result in monetary penalties of up to, the greater of, 4 per cent of the Company’s worldwide turnover in the preceding financial year, or € 20.0 million (£ 17.5 million in the UK), whichever is higher. The GDPR also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies, and obtain compensation for damages resulting from violations of the GDPR. The GDPR, and other changes in laws or regulations associated with the enhanced protection of personal data, mean that the size of potential fines related to data protection and our costs of providing products and services, could result in changes to our business practices, and could prevent us from offering certain services in jurisdictions in which we operate. Although we have implemented contracts, policies and procedures designed to ensure compliance with applicable laws and regulations, there can be no assurance that our employees, contractors, partners, service providers or agents will not violate such laws and regulations or our contracts, policies and procedures. Additionally, public perception and standards related to the privacy of personal data can shift rapidly, in ways that may affect our reputation, the regulators’ approaches to enforcement of existing laws, or influence regulators to enact regulations and laws that may limit our ability to handle personal data or provide certain products and services. The GDPR, and other applicable data protection laws, also impose restrictions in relation to the international transfer of personal data. For example, in order to transfer data outside of the EEA to a non-adequate country, the GDPR requires us to enter into an appropriate transfer mechanism, and may require us to take additional steps to ensure an essentially equivalent level of data protection. The European Commission has issued standard contractual clauses for data transfers from controllers or processors in the EU (or otherwise subject to the GDPR) to controllers or processors established outside 40 Table of Contents the EU. The new standard contractual clauses require exporters to assess the risk of a data transfer on a case-by-case basis, including an analysis of the laws in the destination country. The UK is not subject to the European Commission’s new standard contractual clauses but has published a UK-specific transfer mechanism, which enables transfers from the UK. The UK-specific mechanism, the “International Data Transfer Agreement”, requires a similar risk assessment of the transfer as the standard contractual clauses. Further, the EU and U.S. have adopted its adequacy decision for the EU-U.S. Data Privacy Framework ("Framework"), which entered into force on July 11, 2023. This Framework provides that the protection of personal data transferred between the EU and the U.S. is comparable to that offered in the EU. This provides a further avenue to ensuring transfers to the U.S. are carried out in line with GDPR. There has been an extension to the Framework to cover UK transfers to the U.S.. The Framework could be challenged like its predecessor frameworks. Implementing new or revised transfer mechanisms or ensuring an essentially equivalent protection may involve additional expense and potentially increased compliance risk. In the event a legislator, government, regulator or court imposes additional restrictions on international transfers, there may be operational interruption in the performance of services for customers and internal processing of employee information. Such restrictions may also increase our obligations in relation to carrying out international transfers of personal data, and incur additional expense and increased regulatory liabilities. Our failure to comply with U.S. data protection laws and regulations could lead to government enforcement actions and significant penalties against us, and adversely impact our operating results. There are numerous laws and legislative and regulatory initiatives at the U.S. federal and state levels as well addressing privacy and security concerns, and some state privacy laws apply more broadly than HIPAA and associated regulations. For example, the California Consumer Privacy Act (“CCPA”), creates individual privacy rights for California consumers (as defined broadly in the law) and places increased privacy and security obligations on entities handling personal information about residents of California. The CCPA requires covered businesses to provide certain disclosures to consumers about its data collection, use and sharing practices, and to provide affected California residents with ways to opt-out of certain sales or transfers of personal information. The CCPA provides for civil penalties for violations, as well as a private right of action for certain data breaches that result in the loss of personal information. This private right of action may increase the likelihood of, and risks associated with, data breach litigation. While there is currently an exception for protected health information that is subject to HIPAA, and clinical trial regulations, as currently written, the CCPA may impact our business activities. There continues to be uncertainty surrounding the enforcement and implementation of the CCPA, exemplifying the vulnerability of our business to the evolving regulatory environment related to personal data and protected health information. Further, as of January 1, 2023, the California Privacy Rights Act (“CPRA”), amended the CCPA and created additional obligations with respect to processing and storing personal information and sensitive personal information. The effects of the CCPA (as modified by the CPRA) are potentially significant and may require us to modify our data collection or processing practices and policies and to incur substantial costs and expenses in an effort to comply and increase our potential exposure to regulatory enforcement and/or litigation. Similar consumer privacy laws have passed or come into force in numerous U.S. states. Like the CCPA, these laws grant consumers rights in relation to their personal information and impose new obligations on regulated businesses, including, in some instances, broader data security requirements. In addition, federal and state legislators and regulators have signaled their intention to further regulate health and other sensitive information, and new and strengthened requirements relating to this information could impact our business. At the state level, some states have passed or proposed laws to specifically regulate health information. For example, Washington’s My Health My Data Act, which entered into force in March 2024, requires regulated entities to obtain consent to collect health information, grants consumers certain rights, including to request deletion, and provides for robust enforcement mechanisms, including enforcement by the Washington state attorney-general and a private right of action for consumer claims. At the federal level, the FTC has used its authority over “unfair or deceptive acts or practices” to impose stringent requirements on the collection and disclosure of sensitive categories of personal information, including health information. Moreover, the FTC’s expanded interpretation of a “breach” under its Health Breach Notification Rule could impose new disclosure obligations that would apply in the event of a qualifying breach. 41 Table of Contents We are increasingly dependent on information technology systems, and our systems and infrastructure face certain risks, including from cyber security incidents, data breaches or other compromises and data leakage, which in turn could lead to a determination that we have failed to comply with applicable data protection and cybersecurity regulations, resulting in a fine or regulatory enforcement action. We increasingly rely upon technology systems and infrastructure, including support provided by our partners and other third parties, to support our business. For example, we routinely rely on our technology systems and infrastructure to aid us in the collection, use, storage and transfer, disclosure and other processing of voluminous amounts of data (including confidential, business, personal and other sensitive information). We also rely on systems for manufacturing, regulatory compliance and various other matters. The increasing use and evolution of technology, including cloud-based computing, and reliance on third parties creates additional opportunities for the unintentional, intentional and/or unauthorized exposure, dissemination, misuse, and/or destruction of confidential information stored in our technology systems, infrastructure, and products. Our computer systems, servers, and other technology systems (and those of third parties that we use) are vulnerable to breakdown, interruption, or damage from, among other things, natural disasters, terrorism, war, telecommunication and electrical failures, and sophisticated cyber-attacks, including the theft, fraud, and subsequent misuse of employee credentials, wrongful conduct by insider employees or vendors, denial-of-service attacks, ransomware attacks, business email compromises, computer malware, malicious codes, viruses, breakdown, wrongful intrusions, data breaches, and social engineering (including phishing attacks)cyber and other security attacks, system malfunction, unauthorized access, misuse, and other events. Security threats, including cybersecurity incidents, data breaches and other attacks are becoming increasingly sophisticated, frequent, and adaptive. Attempts to disrupt or gain unauthorized access to our and our third-party vendors’ information systems from malicious third parties or insider threats may incorporate widely varying and frequently changing tactics, which may be enhanced or facilitated by artificial intelligence. Like other companies in our industry, we, and our third party vendors, have experienced threats and cybersecurity incidents relating to our information technology systems and infrastructure. Any such vulnerability could compromise our technology systems and infrastructure and could expose personal and/or proprietary information (including sensitive personal information) to unauthorized third parties and/or cause permanent loss of such data. While we have invested in the protection of data and information technology, there can be no assurance that our efforts will prevent or adequately address breakdowns, breaches in our systems compromises or other incidents or ensure compliance with all applicable security and privacy laws, regulations and standards, including with respect to third-party service providers that utilize sensitive personal information, including protected health information on our behalf. We could also suffer strained relationships, increased costs (for security measures, remediation or otherwise), litigation (including class actions and stockholder derivative actions), be required to notify affected individuals or experience other negative consequences (including a decline in stock price) from cybersecurity incidents or data breaches. Some cybersecurity incidents and data breaches may be very difficult to prevent or adequately address. Our contracts may not contain limitations of liability, and even where they do, there can be no assurance that limitations of liability in our contracts are sufficient to protect us from liabilities, damages, or claims related to our privacy and data security obligations. Our internal computer systems, or those of our CROs or other contractors or consultants, may fail or suffer security incidents, which could result in a material disruption of our product development programs, a determination that we have failed to comply with applicable data protection and cybersecurity regulations, resulting in a fine, and adversely affect our business. Despite the implementation of security measures, our information technology and other internal infrastructure systems and those of our CROs and other contractors and consultants are vulnerable to damage from computer viruses, cyberattacks and unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures. The risk of cyber incidents could also be increased by cyberwarfare in connection with the ongoing conflict between Russia and Ukraine and the conflict in Israel, including potential proliferation of malware into systems unrelated to such conflicts. A significant disruption in the availability of our information technology and other internal infrastructure systems could cause interruptions in our collaborations with our partners and delays in our research and development work. For instance, the loss of preclinical or clinical data involving our product candidates could result in delays in our development and regulatory filing efforts and significantly increase our costs to recover or reproduce the data. Likewise, we rely on third parties to manufacture our product candidates and will rely on third parties to conduct future clinical trials, and similar events relating 42 Table of Contents to their computer systems could also have similar consequences to our business. To the extent that any disruption or security incident were to result in unauthorized disclosure of, or access to, or accidental or unlawful loss, destruction, alteration of, or damage to, our data, or inappropriate disclosure of confidential or proprietary information, we could incur liability, including fines for failure to comply with applicable data protection and cybersecurity regulations, and the development of our product candidates could be delayed. The use of new and evolving technologies, such as artificial intelligence, in our offerings may present risks and challenges that can impact our business including by posing security risks to our confidential information, proprietary information, and personal data. We use, and may continue to rely on, data analytics, machine learning and other artificial intelligence tools in our research and development, clinical operations, pharmacovigilance and quality systems. The use of certain AI technology can give rise to intellectual property risks, including compromises to proprietary intellectual property and intellectual property infringement. Additionally, we expect to see increasing government and supranational regulation related to artificial intelligence use and ethics, which may also significantly increase the burden and cost of research, development and compliance in this area, such as for example in the U.S., the Colorado AI Act which is set to enter into force in June 2026, and California’s AB 2013, which requires generative AI developers to post information on their websites regarding the data used to train their AI systems. In the U.S., the AI regulatory environment is complex and uncertain. Over the past year, states have advanced, and in some cases passed, dozens of laws focusing on AI governance and regulation, including on deployment of AI in healthcare settings. At the federal level, the Trump Administration has endorsed a federal moratorium on the enforcement of state AI laws, including through a December 11, 2025, executive order on “Ensuring a National Policy Framework for Artificial Intelligence.” So far, these efforts have not been successful at curtailing state action on AI regulation, contributing to a complicated legislative patchwork, which may be litigated in state and federal courts. Additionally, in Europe the EU’s Artificial Intelligence Act (“AI Act”) — the world’s first comprehensive AI law — entered into force on August 1, 2024 and, with some exceptions, will begin to apply as of August 2, 2026. This legislation imposes significant obligations on providers and deployers of high-risk AI systems, and encourages providers and deployers of AI systems to account for EU ethical principles in their development and use of these systems. To the extent our tools, or those of our suppliers, partners, or customers, are considered AI systems within the scope of this regime, we may be required to adopt higher standards of data quality, transparency, and human oversight, and adhere to specific and potentially burdensome and costly ethical, accountability, and administrative requirements. The rapid evolution of AI will require the application of significant resources to design, develop, test and maintain our products and services to help ensure that AI is implemented in accordance with applicable law and regulation and in a socially responsible manner and to minimize any real or perceived unintended harmful impacts and may increase the cost and complexity of developing and using AI-enabled solutions. Our vendors may in turn incorporate AI tools into their own offerings, and the providers of these AI tools may not meet existing or rapidly evolving regulatory or industry standards, including with respect to privacy and data security. Further, bad actors around the world use increasingly sophisticated methods, including the use of artificial intelligence, to engage in illegal activities involving the theft and misuse of personal information, confidential information, and intellectual property. Any perceived or actual failures could lead to regulatory investigations, litigation and could damage our reputation, result in the loss of valuable property and information, and adversely impact our business. Our current operations are mainly concentrated in one location, and any events affecting this location may have material adverse consequences. Our current operations are primarily located in our facilities in Leiden, the Netherlands. Any unplanned event, such as flood, fire, explosion, earthquake, extreme weather condition, medical epidemics, power shortage, telecommunication failure or other natural or manmade accidents or incidents that result in us being unable to fully utilize the facilities may have a material adverse effect on our ability to operate our business, particularly on a daily basis, and have significant negative consequences on our financial and operating conditions. Loss of access to these facilities may result in increased costs, delays in the development of our product candidates or interruption of our business operations. As part of our risk management policy, we maintain insurance coverage at levels that we believe are appropriate for our business. However, in the event of an accident or incident at these facilities, we cannot assure you that the amounts of insurance will be sufficient to satisfy any damages and losses. If our facilities are unable to operate because of an accident or incident or for any other reason, even for a short period of time, any or all of our research and development programs may be harmed. 43 Table of Contents Our international operations subject us to various operational risks, and our failure to manage these risks could adversely affect our results of operations. We face significant operational risks as a result of doing business internationally, such as: ● fluctuations in foreign currency exchange rates; potentially adverse and/or unexpected tax consequences, including penalties due to the failure of tax planning or due to the challenge by tax authorities on the basis of transfer pricing and liabilities imposed from inconsistent enforcement; ● potential changes to relevant accounting standards, which may impact our reported financial situation and results; ● being subject to the different, complex and changing laws, regulations and court systems of multiple jurisdictions and compliance with a wide variety of foreign laws, treaties and regulations; ● reduced protection of, or significant difficulties in enforcing, intellectual property rights in certain countries; ● difficulties in attracting and retaining qualified personnel due to the location of our operations; ● restrictions imposed by local labor practices and laws of jurisdictions where we have employees on our business and operations, including unilateral cancellation or modification of contracts; ● rapid changes in global government, adverse market or macroeconomic conditions or market volatility resulting from global economic developments, political or civil unrest or instability, including due to war, international hostilities or terrorism (such as the ongoing conflict between Russia and Ukraine and the conflict in Israel), high inflation, future health epidemics and other similar outbreaks or events, and potential failure in confidence of our suppliers or customers due to such changes or events; and ● tariffs, trade protection measures, import or export licensing requirements, trade embargoes and other trade barriers. If we were to experience any of the difficulties listed above, or any other difficulties, our international development activities and our overall financial condition may suffer and cause it to reduce or discontinue our international operations and market approval efforts. Inadequate funding for the FDA, the SEC and other U.S. government agencies, or comparable foreign regulatory authorities, or other disruptions to these agencies’ operations, including policy, leadership and personnel changes, could prevent new products from being developed or commercialized in a timely manner or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business. The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel and accept the payment of user fees, the availability of personnel and other resources, statutory, regulatory, and policy changes and other events that may otherwise affect the FDA’s ability to perform routine transactions. Average review times at the agency have fluctuated in recent years as a result. In addition, government funding of the SEC and other U.S. government agencies or comparable foreign regulatory authorities on which our operations may rely, including those that fund research and development activities, is subject to the political process, including executive and congressional priorities, which is inherently fluid and unpredictable. For example, over the last several years the U.S. government has shut down several times and certain regulatory agencies, such as the FDA and the SEC, have in some instances had to furlough critical employees and stop critical activities. If a prolonged government shutdown or other substantial disruption were to occur, including as a result of reaching the debt ceiling, there could be a significant impact on the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business. Further, future government shutdown or other 44 Table of Contents substantial disruption at other government agencies, such as the SEC, may also impact our business by delaying review of our public filings, which in turn could delay or frustrate our ability to access the public capital markets. Disruptions at the FDA, other government agencies or comparable foreign regulatory authorities, including significant leadership, personnel and policy changes, may slow the time necessary for product applications to be reviewed and/or approved by necessary government agencies, which would adversely affect our business. Changes and cuts in FDA staffing have been reported by some in the pharmaceutical industry as creating instances of delays in the FDA’s responsiveness or in its ability to review INDs or marketing applications, issue regulations or guidance, or implement or enforce regulatory requirements in a timely fashion or at all. In 2025, the U.S. government issued executive orders and implemented reductions in force that have adversely impacted FDA staffing and resources. Similar developments at regulators in other countries (including the EMA) could have similar impacts on our applications for marketing approval and on our business. In addition, changes in the requirements and policies of the FDA and other regulatory agencies with jurisdiction over our products, including applicable pricing and reimbursement frameworks under federal healthcare programs, could affect the commercial viability of our products, create revenue uncertainty, and impact our ability to achieve profitability. Regulatory challenges may introduce new challenges in obtaining FDA approval or navigating commercialization, and any delay in securing applicable regulatory approvals would adversely affect our business and prospects. The investment of our cash and cash equivalents is subject to risks which may cause losses and affect the liquidity of these investments. As at December 31, 2025, we had € 92,413,000 in cash and cash equivalents. To date, our cash and cash equivalents have been deposited primarily in savings and deposit accounts with original maturities of twelve months or less. Savings and deposit accounts generate small amounts of interest income, if any. In 2025, 2024, and 2023, we have generated interest income on our euro and U.S. dollar deposit accounts. Any future investments may include term deposits, corporate bonds, money market funds and government securities, all in accordance with our cash management policy. These investments are subject to general credit, liquidity, market and interest rate risks. For example, interest rates may be negative in the EU. We may realize losses in the fair value of these investments or a complete loss of these investments, which would have a negative effect on our financial statements. In addition, should our investments cease paying or reduce the amount of interest paid to us, our interest income would suffer. The materialization of any of the market risks associated with our investment portfolio may have an adverse effect on our results of operations, liquidity and financial condition. We may be exposed to significant foreign exchange risk. We incur portions of our expenses, and may in the future derive revenues, in currencies other than our functional currency (i.e. the euro), in particular, the U.S. dollar. As a result, we are exposed to foreign currency exchange risk as our results of operations and cash flows are subject to fluctuations in foreign currency exchange rates. We currently do not engage in hedging transactions to protect against uncertainty in future exchange rates between particular foreign currencies and the euro. Therefore, for example, an increase in the value of the U.S. dollar against the euro could be expected to have a negative impact on our expenditures, although it is our policy to match the currency of our cash and cash equivalents with expected cash out flows as much as practically feasible. We cannot predict the impact of foreign currency fluctuations, and foreign currency fluctuations in the future may adversely affect our financial condition, results of operations and cash flows. Our business entails a significant risk of product liability and our ability to obtain sufficient insurance coverage could have a material effect on our business, financial condition, results of operations or prospects. The use of our product candidates in preclinical studies, in clinical trials and the sale of any of our product candidates if approved, exposes us to the risk of product liability claims. Product liability claims might be brought against us by patients, healthcare providers or others selling or otherwise coming into contact with our product candidates. For example, we may be sued if any product we develop allegedly causes injury or is found to be otherwise unsuitable during product testing, manufacturing, marketing or sale. Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, including as a result of interactions with alcohol or 45 Table of Contents other drugs, negligence, strict liability, and a breach of warranties. Claims could also be asserted under state consumer protection acts. If we become subject to product liability claims and cannot successfully defend ourselves against them, we could incur substantial liabilities. In addition, regardless of merit or eventual outcome, product liability claims may result in, among other things: ● withdrawal of patients from our clinical trials; ● substantial monetary awards to patients or other claimants; ● decreased demand for any of our current or future product candidates following marketing approval, if obtained; ● damage to our reputation and exposure to adverse publicity; ● increased FDA or EMA warnings on product labels; ● litigation costs; ● distraction of management’s attention from our primary business; ● loss of revenue; and ● the inability to successfully commercialize any of our current or future product candidates, if approved. We will need to maintain product liability insurance coverage for our clinical trials. We may not be able to obtain such coverage at a reasonable cost or in sufficient amounts to protect us against losses, including if insurance coverage becomes increasingly expensive. Large judgments have been awarded in class action lawsuits based on drugs that had unanticipated side effects. The cost of any product liability litigation or other proceedings, even if resolved in our favor, could be substantial, particularly in light of the size of our business and financial resources. A product liability claim or series of claims brought against us could cause our share price to decline and, if we are unsuccessful in defending such a claim or claims and the resulting judgments exceed our insurance coverage, our financial condition, business and prospects could be materially adversely affected. Our ability to use our net operating losses to offset future taxable income may be subject to certain limitations. Our ability to use our net operating losses (“NOLs” or “tax losses”) in the Netherlands is currently limited and may be further limited. Under Dutch corporate income tax law, effective from January 1, 2022, tax losses may be carried forward indefinitely. However, the offset of losses will be limited in a given year against the first € 1.0 million of taxable profit. For taxable profit in excess of this amount, losses may only be offset up to 50% of this excess. As at December 31, 2025, we had a total of € 476.0 million tax loss carry-forwards available for offset against future taxable profits. There is also a risk that due to regulatory changes such as suspensions on the use for NOLs, our existing NOLs could expire or otherwise become unavailable to offset future income tax liabilities. For these reasons, we may not be able to use a material portion of the NOLs, even if we attain profitability. Changes in accounting rules and regulations, or interpretations thereof, could result in unfavorable accounting charges or require us to change our compensation policies. Accounting methods and policies for biopharmaceutical companies, including policies governing revenue recognition, research and development and related expenses and accounting for share-based compensation, are subject to review, interpretation and guidance from relevant accounting authorities, as well as the SEC. Changes to accounting methods or policies, or interpretations thereof, may require us to reclassify, restate or otherwise change or revise our financial statements, including those contained in this Annual Report. 46 Table of Contents The U.S. Congress, the Trump administration, or any new administration may make substantial changes to fiscal, tax, and other federal policies that may adversely affect our business. Since the start of the Trump Administration in 2025, U.S. policy changes have been implemented at a rapid pace and additional changes are likely. For example, the U.S. government has adopted new approaches to trade policy and in some cases may renegotiate, or potentially terminate, certain existing bilateral or multi-lateral trade agreements. The U.S. government has also imposed substantial tariffs on most countries throughout the world and has further threatened to continue to broadly impose tariffs, which could lead to corresponding punitive actions by the countries with which the U.S. trades. Changes to U.S. policy implemented by the U.S. Congress, the Trump administration or any new administration have impacted and may in the future impact, among other things, the U.S. and global economy, international trade relations, unemployment, immigration, healthcare, taxation, the U.S. regulatory environment, inflation and other areas. Although we cannot predict the impact, if any, of these changes to our business, they could adversely affect our business. Until we know what policy changes are made, whether those policy changes are challenged and subsequently upheld by the court system and how those changes impact our business and the business of our competitors over the long term, we will not know if, overall, we will benefit from them or be negatively affected by them. Risks Related to Ownership of our Ordinary Shares We cannot predict what the market price of our ordinary shares will be. As a result, it may be difficult for investors to sell our ordinary shares at or above the price at which they purchased them. An active trading market for our shares may not be sustained. The market value of our ordinary shares may decrease from time to time. As a result of these and other factors, investors may be unable to resell our shares at or above the price at which they purchased them. The lack of an active market may impair investors’ ability to sell our shares at the time they wish to sell them or at a price that they consider reasonable. The lack of an active market may also reduce the fair market value of our shares. Further, an inactive market may also impair our ability to raise capital by selling our ordinary shares and may impair our ability to enter into strategic partnerships or acquire companies or products by using our ordinary shares as consideration. The market price of our shares may be volatile and investors could lose all or part of their investment. The trading price of our ordinary shares is likely to be highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control. For example, the price of our ordinary shares, which reached its high record of $ 24.99 per share at the close of the trading on March 10, 2015, decreased as low as $ 0.56 per share at the close of the trading on May 11, 2022. In addition to the factors discussed in this “Risk Factors” section and elsewhere in this Annual Report, these factors include: ● the results of our preclinical studies and clinical trials; ● the presentation of data at industry conferences by us and/or our competitors; ● the responses to any of our INDs with the FDA and any of our clinical trial applications with the competent authorities of the EU Member States; ● any current or future preclinical studies or clinical trials of our product candidates, including any delays in enrollment rates or timing of these trials; ● regulatory actions with respect to our products or our competitors’ products; ● the recruitment or departure of key personnel; ● announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures, collaborations or capital commitments; ● expiration or termination of licenses, research contracts or other collaboration agreements; 47 Table of Contents ● the timing and cost of, and level of investment in, research and development activities relating to our product candidates, which may change from time to time; ● results of clinical trials of our competitors; ● the success of competitive products or technologies; ● actual or anticipated changes in our growth rate relative to our competitors; ● regulatory or legal developments in the U.S., the EU and other jurisdictions; ● developments or disputes concerning patent applications, issued patents or other proprietary rights; ● the level of expenses related to any of our product candidates or preclinical or clinical development programs; ● actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts; ● variations in our financial results or those of companies that are perceived to be similar to us; ● fluctuations in the valuation of companies perceived by investors to be comparable to us; ● share price and volume fluctuations attributable to inconsistent trading volume levels of our shares; ● announcement or expectation of additional financing efforts; ● sales of our ordinary shares by us, our insiders or our other shareholders; ● changes in the structure of healthcare payment systems; ● market conditions in the pharmaceutical and biotechnology sectors; and ● general economic, industry and market conditions, including the impact of inflation and rising interest rates, and domestic or international political instability. In addition, the stock market in general, and pharmaceutical and biotechnology companies in particular, have experienced extreme price and volume fluctuations that have sometimes been unrelated or disproportionate to the operating performance of these companies. Historically, securities class action litigation has often been brought against companies following periods of volatility in the market price of a company’s securities. This type of litigation, if instituted, could result in substantial costs and a diversion of management’s attention and resources, which could harm our business, operating results, or financial condition. Broad market and industry factors may negatively affect the market price of our ordinary shares, regardless of our actual operating performance. The realization of any of the above risks or any of a broad range of other risks, including those described in these “Risk Factors,” could have a dramatic and material adverse impact on the market price of our ordinary shares. If we are unable to maintain compliance with Nasdaq listing standards, our ordinary shares may be delisted from the Nasdaq Stock Market and you may face significant restrictions on the resale of your shares. There can be no assurances that we will be able to maintain our Nasdaq listing in the future. For example, in May 2022, we received a notification from Nasdaq that the trading price of our ordinary shares did not meet the minimum bid price requirement of $ 1.00 per share for a period of 30 consecutive trading days. We were granted a 180-day compliance period to regain compliance by achieving a closing bid price of at least $ 1.00 per share for a minimum of 10 consecutive trading days. In October 2022, we transferred our listing from the Nasdaq Global Market to the Nasdaq Capital Market and received an additional 180-day compliance period, as contemplated by Nasdaq. On December 2, 2022, Nasdaq informed 48 Table of Contents us that we had regained compliance with the minimum bid price rule. Nevertheless, share prices in biotech are volatile and there can be no assurances that we will be able to maintain our Nasdaq Capital Market listing in the future. In the event we are unable to maintain compliance with the Nasdaq Capital Market listing standards and our ordinary shares are delisted from the exchange, it would, among other things, likely lead to a number of negative implications, including an adverse effect on the price of our ordinary shares, reduced liquidity in our ordinary shares, the loss of federal preemption of state securities laws, breach of covenants in agreements and greater difficulty in obtaining financing. In the event of a de-listing, we would take actions to restore our compliance with Nasdaq’s listing requirements, but we can provide no assurance that any such action taken by us would allow our ordinary shares to become listed again, stabilize the market price or improve the liquidity of our ordinary shares, prevent our ordinary shares from dropping below the Nasdaq minimum bid price requirement in the future, or prevent future non-compliance with Nasdaq’s listing requirements. If we cannot restore our compliance with Nasdaq’s listing requirements, we would pursue eligibility for trading of these securities on other markets or exchanges, such as the OTCQB or OTCQX, which are unorganized, inter-dealer, over-the-counter markets which provides significantly less liquidity than the Nasdaq Capital Market or other national securities exchanges. Unstable market and macroeconomic conditions may have serious adverse consequences on our business, financial condition and trading price of our ordinary shares. Our business could be adversely affected by unstable economic and political conditions within the U.S. and foreign jurisdictions, including as a result of an economic downturn and geopolitical events, such as the potential for significant changes in the U.S. federal policies or regulatory environment that affect the geopolitical landscape, changes in or the disruptions of U.S. governmental agencies, disruptions in capital markets, changes in international trade relationships and military conflicts. The global credit and financial markets have also experienced extreme volatility and disruptions in the past several years (including as a result of actual or perceived changes in interest rates, inflation, international tariffs and macroeconomic uncertainties) including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability. We believe that the state of global economic conditions remain particularly volatile and uncertain due to, among other factors, the impact of fiscal stimulus programs initiated by various governments in response to economic downturn and ongoing supply chain issues and inflationary pressures, as well as recent and expected shifts in political, legislative and regulatory conditions concerning, among other matters, international trade and taxation, and that an uneven recovery or a renewed global downturn may negatively impact our ability to conduct clinical trials on the scale and timelines anticipated. There can be no assurance that further deterioration in credit and financial markets and confidence in economic conditions, will not occur. Our general business strategy may be adversely affected by any such economic downturn, volatile business or political environment or continued unpredictable and unstable market conditions. The financial markets and the global economy may also be adversely affected by the current or anticipated impact of military conflict, including the conflict between Russia and Ukraine and the conflict in Israel, terrorism or other geopolitical events. Sanctions imposed by the United States and other countries in response to such conflicts, including the conflict in Ukraine, may also adversely impact the financial markets and the global economy, and any economic countermeasures by the affected countries or others could exacerbate market and economic instability. Additionally, changes to policy implemented by the U.S. Congress, the current U.S. administration or any new U.S. administration have impacted and may in the future impact, among other things, the U.S. and global economy, international trade relations, unemployment, immigration, healthcare, taxation, the U.S. regulatory environment, inflation and other areas. For example, in early 2025, the U.S. imposed blanket 10% tariffs on virtually all imports to the U.S. and significantly higher tariffs applicable to imports from many countries, which have resulted in other countries imposing additional tariffs on imports from the U.S., and is likely to continue to result in more retaliatory tariffs. In addition, the current U.S. administration has expressed an intent to impose tariffs on pharmaceutical imports, with the stated policy objective of reshoring pharmaceutical manufacturing to the United States. Among other means, such tariffs may be imposed by the United States under Section 232 of the Trade Expansion Act of 1962, as amended, pursuant to which the U.S. Department of Commerce recently initiated an investigation to determine the effects of importing pharmaceuticals and pharmaceutical ingredients on national security. The Trump administration has continued to broadly impose tariffs, which could lead to corresponding punitive actions by the countries with which the U.S. trades. While certain tariffs have been suspended, modified or temporarily reduced, we cannot predict the results of the U.S. government’s trade negotiations or the outcome of ongoing legal challenges to specific tariff policies. There can be no assurance that deterioration in credit and financial markets and 49 Table of Contents confidence in economic conditions will not occur. For instance, actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems. Investor concerns regarding the U.S. or international financial systems could result in less favorable commercial financing terms, including higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access to credit and liquidity sources, thereby making it more difficult for us to acquire financing on acceptable terms or at all. In addition, any deterioration in the macroeconomy or financial services industry could lead to losses or defaults by our suppliers, which in turn, could have a material adverse effect on our current and/or planned business operations and our current or projected results of operations and financial condition. Also, current inflationary trends in the global economy may impact salaries and wages, costs of goods and transportation expenses, among other things, and recent and potential future disruptions in access to bank deposits or lending commitments due to bank failures may create market and economic instability. If the current equity and credit markets deteriorate, it may make obtaining any necessary debt or equity financing more difficult, more costly and more dilutive. Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stock price and could require us to delay or abandon clinical development plans. In addition, there is a risk that one or more of our current service providers, manufacturers and other partners may not survive an economic downturn, which could directly affect our ability to attain our operating goals on schedule and on budget. To the extent that our profitability and strategies are negatively affected by downturns or volatility in general economic conditions, our business and results of operations may be materially adversely affected. If securities or industry analysts publish inaccurate or unfavorable research or cease to publish research about our business, our share price and trading volume could decline. The trading market for our ordinary shares depends in part on the research and reports that securities or industry analysts publish about us or our business. In the event securities or industry analysts who cover us downgrade our ordinary shares, or publish inaccurate or unfavorable research about our business, our share price would likely decline. In addition, if one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, demand for our ordinary shares could decrease, which might cause our share price and trading volume to decline. Sales of a substantial number of our ordinary shares by our existing shareholders in the public market could cause our share price to fall. If our existing shareholders sell, or indicate an intention to sell, substantial amounts of our ordinary shares in the public market, the trading price of our ordinary shares could decline. In addition, a substantial number of our ordinary shares subject to outstanding options, issuable upon vesting of outstanding restricted stock units, or reserved for future issuance under our equity incentive plans are or will become eligible for sale in the public market to the extent permitted by the provisions of various vesting schedules. If these additional ordinary shares are sold, or if it is perceived that they will be sold, in the public market, the trading price of our ordinary shares could decline. Raising additional capital may cause dilution to our existing shareholders. Further, any future financing arrangements, may restrict our operations or require us to relinquish rights to our technologies or product candidates. We may seek additional capital due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans through a combination of private and public equity offerings, debt financings, strategic partnerships and alliances and licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, existing ownership interests may be diluted and the terms of such financings may include liquidation or other preferences that adversely affect the rights of existing shareholders. In addition, such indebtedness also results in increased fixed payment obligations and certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business and may result in liens being placed on our assets and intellectual property. If we were to default on such indebtedness, we could lose such 50 Table of Contents assets and intellectual property. Also, if we raise additional funds through strategic partnerships and alliances and licensing arrangements with third parties, we may have to relinquish valuable rights to our product candidates, or grant licenses on terms that are not favorable to us. Because we do not anticipate paying any cash dividends on our ordinary shares in the foreseeable future, capital appreciation, if any, will be the sole source of potential gain for our shareholders. We have never declared or paid cash dividends on our ordinary shares. We currently intend to retain all of our future earnings, if any, to finance the growth and development of our business. As a result, capital appreciation, if any, of our ordinary shares will be the sole source of gain for our shareholders for the foreseeable future. We have been a listed company since September 2014. Complying with all requirements will increase our costs, require additional management resources and qualified accounting and financial personnel, and we may fail to meet all of these obligations. We face substantial legal, accounting, administrative and other costs and expenses as a public company. Compliance with the Sarbanes-Oxley Act of 2002, the Dodd-Frank Act of 2010, the Dutch Financial Supervision Act and the rules promulgated thereunder, as well as rules of the SEC and Nasdaq and the Dutch Corporate Governance Code (“DCGC”) for example, are expected to result in ongoing increases in our legal, audit and financial compliance costs. The Exchange Act requires, among other things, that we file certain periodic reports with respect to our business and financial condition. We must also comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002. Complying with Section 404 is costly and management’s attention may be diverted from other business concerns, which could adversely affect our business and results of operations. We currently do not have an internal audit group, and we will need to continue to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge, and it may be difficult to recruit and maintain such personnel. Implementing any appropriate changes to our internal controls may require specific compliance training for our directors, senior management and employees, entail substantial costs to modify our existing accounting systems, and take a significant period of time to complete. Such changes may not, however, be effective in maintaining the adequacy of our internal controls, and any failure to maintain that adequacy, or consequent inability to produce accurate financial statements or other reports on a timely basis, could increase our operating costs and could materially impair our ability to operate our business. If we fail to establish and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud. As a result, shareholders could lose confidence in our financial and other public reporting, which would harm our business and the trading price of our ordinary shares. Effective internal controls over financial reporting are necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, are designed to prevent fraud. Any failure to implement required new or improved controls, or difficulties encountered in their implementation, could cause us to fail to meet our reporting obligations. In addition, any testing by us conducted in connection with Section 404 of the Sarbanes-Oxley Act of 2002, or any subsequent testing by our independent registered public accounting firm, may reveal deficiencies in our internal controls over financial reporting that are deemed to be material weaknesses or that may require prospective or retroactive changes to our financial statements or identify other areas for further attention or improvement. Inferior internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our ordinary shares. Our board is required to assess the effectiveness of our internal controls and procedures annually and, in case we become a domestic filer, we will be required to disclose changes to these controls on a quarterly basis. Our independent registered public accounting firm is required to attest to the effectiveness of our internal controls over financial reporting pursuant to Section 404. An independent assessment of the effectiveness of our internal controls could detect problems that our management’s assessment might not. Undetected material weaknesses in our internal controls could lead to financial statement restatements and require us to incur the expense of remediation. 51 Table of Contents Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud. We are subject to certain reporting requirements of the Exchange Act. Our disclosure controls and procedures are designed to reasonably assure that information required to be disclosed by us in reports we file or submit under the Exchange Act is accumulated and communicated to management, recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. We believe that any disclosure controls and procedures or internal controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls. Accordingly, because of the inherent limitations in our control system, misstatements or insufficient disclosures due to error or fraud may occur and not be detected. Risks Related to Investing in a Foreign Private Issuer or a Dutch Company We are a foreign private issuer and, as a result, we are not subject to U.S. proxy rules and are subject to Exchange Act reporting obligations that, to some extent, are more lenient and less frequent than those of a U.S. domestic public company. We report under the Exchange Act as a non-U.S. company with foreign private issuer status. Because we qualify as a foreign private issuer under the Exchange Act and although we are subject to Dutch laws and regulations with regard to such matters and intend to furnish quarterly financial information to the SEC, we are exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic public companies, including: ● the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act; ● the sections of the Exchange Act imposing liability for insiders who profit from trades made in a short period of time; and ● the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q containing unaudited financial and other specified information, or current reports on Form 8-K, upon the occurrence of specified significant events. Effective March 18, 2026, pursuant to the Holding Foreign Insiders Accountable Act, directors and officers of foreign private issuers, including us, are required to comply with the reporting requirements of Section 16(a) of the Exchange Act. Notwithstanding the foregoing, directors and officers of a “foreign private issuer” remain exempt from Section 16(b) (short -swing profit liability) and Section 16(c) (short sale prohibitions). In addition, foreign private issuers are not required to file their annual report on Form 20-F until 120 days after the end of each fiscal year, while U.S. domestic issuers that are accelerated filers are required to file their annual report on Form 10-K within 75 days after the end of each fiscal year. Foreign private issuers are also exempt from the Regulation Fair Disclosure, aimed at preventing issuers from making selective disclosures of material information. As a result of the above, our shareholders may not have the same protections afforded to shareholders of companies that are not foreign private issuers. Certain U.S. holders of our ordinary shares may suffer adverse tax consequences if we are characterized as a passive foreign investment company for U.S. federal income tax purposes. Generally, if, for any taxable year, at least 75% of our gross income is passive income, or at least 50% of the value of our assets is attributable to assets that produce passive income or are held for the production of passive income, including cash, we would be characterized as a PFIC for U.S. federal income tax purposes. For purposes of these tests, passive income includes dividends, interest, and gains from the sale or exchange of investment property and rents and royalties other than rents and royalties which are received from unrelated parties in connection with the active conduct of a trade or business. If we are characterized as a PFIC, our U.S. shareholders may suffer adverse tax consequences, including having gains 52 Table of Contents realized on the sale of our ordinary shares treated as ordinary income, rather than capital gain, the loss of the preferential rate applicable to dividends received on our ordinary shares by individuals who are U.S. holders, and having interest charges apply to distributions by us and the proceeds of share sales. See Item 10.E: “Taxation” for more information. The market value of our assets may be determined in large part by reference to the market price of our ordinary shares, which is likely to fluctuate and may fluctuate considerably given that market prices of technology companies have been especially volatile. In addition, the composition of our income and assets will be affected by how, and how quickly, we spend our cash, including any cash raised pursuant to prior offerings. Based on the average value of our gross assets and composition of our income, we believe that we were not a PFIC for the 2025 taxable year. However, our status as a PFIC is a fact-intensive determination made on an annual basis, and we cannot provide any assurance regarding our PFIC status for the current, prior or future taxable years. We intend to provide the information necessary for U.S. holders to make a “qualified electing fund,” (“QEF”) election if we are treated as a PFIC for any taxable year. The rights and responsibilities of our shareholders are governed by Dutch law and differ in some important respects from the rights and responsibilities of shareholders under U.S. law. Our corporate affairs are governed by our articles of association, our internal rules and by the laws governing companies incorporated in the Netherlands. The rights of our shareholders and the responsibilities of both executive and non-executive members of our board under Dutch law are different than under the laws of some U.S. jurisdictions. In the performance of their duties, our board is required by Dutch law to consider the interests of ProQR Therapeutics, its shareholders, its employees and other stakeholders and not only those of our shareholders. It is possible that some of these stakeholders will have interests that are different from, or in addition to, the interests of our shareholders. Also, as a Dutch company, we are not required to solicit proxies or prepare proxy statements for general meetings of shareholders. Dutch law does not have a regulatory regime for U.S.-style proxy solicitations and, even though Dutch law accommodates voting by proxy, the solicitation of proxies is not a widely used business practice in the Netherlands. In addition, the rights of holders of shares and many of the rights of shareholders as they relate to, for example, the exercise of shareholder rights, are governed by Dutch law and our articles of association and differ from the rights of shareholders under U.S. law. For example, Dutch law does not grant appraisal rights to a company’s shareholders who wish to challenge the consideration to be paid upon a merger or consolidation of the company. We may lose our foreign private issuer status which would then require us to comply with the Exchange Act’s domestic reporting regime and cause us to incur significant legal, accounting and other expenses. We are a foreign private issuer and therefore we are not required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act applicable to U.S. domestic issuers. In order to maintain our current status as a foreign private issuer, either: ● a majority of our ordinary shares must be either directly or indirectly owned of record by non-residents of the U.S.; or ● a majority of our “executive officers” and a majority of our directors may not be U.S. citizens or residents, more than 50% of our assets cannot be located in the U.S. and our business must be administered principally outside the U.S.. If we lose this status, we would be required to comply with the Exchange Act reporting and other requirements applicable to U.S. domestic issuers, which are more detailed and extensive than the requirements for foreign private issuers. We may also be required to make changes in our corporate governance practices in accordance with various SEC and Nasdaq rules. The regulatory and compliance costs to us under U.S. securities laws if we are required to comply with the reporting requirements applicable to a U.S. domestic issuer may be significantly higher than the costs we would incur as a foreign private issuer. As a result, we expect that a loss of foreign private issuer status would increase our legal and financial compliance costs, would make some activities more time consuming and costly and could necessitate the hiring of additional accounting, financial and legal staff. We also expect that if we were required to comply with the rules and 53 Table of Contents regulations applicable to U.S. domestic issuers, it would make it more difficult and expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These rules and regulations could also make it more difficult for us to attract and retain qualified members of our board. We currently report our financial results under IFRS, which differ in certain significant respects from U.S. GAAP. Currently we report our financial statements under IFRS. There have been and there may in the future be certain significant differences between IFRS and U.S. GAAP, including differences related to revenue recognition, share-based compensation expense, income tax and earnings per share. As a result, our financial information and reported earnings for historical or future periods could be significantly different if they were prepared in accordance with U.S. GAAP. In addition, we do not intend to provide a reconciliation between IFRS and U.S. GAAP unless it is required under applicable law. As a result, you may not be able to meaningfully compare our financial statements under IFRS with those companies that prepare financial statements under U.S. GAAP. Provisions of our articles of association or Dutch corporate law might deter acquisition bids for us that might be considered favorable and prevent or frustrate any attempt to replace or remove (members of) of our board. Certain provisions of our articles of association may make it more difficult for a third party to acquire control of us or effect a change in our board. These provisions include: ● the authorization of a class of preferred shares that may be issued to a protection foundation to which we have granted a perpetual and repeatedly exercisable call option; ● a provision that our board members may only be removed by our general meeting of shareholders by at least a two-thirds majority of votes cast representing more than 50% of our issued share capital (unless the removal was proposed by the board); and ● a requirement that certain matters, including an amendment of our articles of association, may only be brought to our shareholders for a vote upon a proposal by our board that has been approved by our board. In addition, our board needs to act in the interest of our Company, our business and take into account the interests of all our stakeholders, including by promoting the sustainable success of our business and the creation of long term value for us and our business. The board is responsible for determining our strategy and choosing our strategic direction. In doing so and depending on the circumstances they may decide to not entertain a proposed takeover or other strategic proposal, even if the proposal is supported by the majority of our shareholders and/or would create more shareholder value. The board may also use its general authority under Dutch corporate law and the DCGC to not co-operate with a proposal, e.g., by not providing due diligence and or by not cooperating with shareholder proposals to adopt resolutions in a general shareholder meeting that may change our strategy for instance by invoking the maximum 180 days response time set out in the DCGC. As indicated above, we have adopted an anti-takeover measure by granting a perpetual and repeatedly exercisable call option to the protection foundation, which confers upon the protection foundation the right to acquire, under certain conditions, the number of preferred shares described above. The issuance of such preferred shares will occur upon the protection foundation’s exercise of the call option and will not require shareholder consent. Such a measure has the effect of making a takeover of us more difficult or less attractive and as a result, our shareholders may be unable to benefit from a change of control and realize any potential change of control premium which may materially and adversely affect the market price of our ordinary shares. We are not obligated to and do not comply with all the best practice provisions of the Dutch Corporate Governance Code. This may affect our shareholders’ rights. As a Dutch company we are subject to the DCGC. The DCGC contains both principles and best practice provisions that regulate the internal affairs of the board and the relation between the board and the shareholders (i.e., the general meeting of shareholders). The DCGC is based on a “comply or explain” principle. Accordingly, companies are required to disclose 54 Table of Contents in their annual reports, filed in the Netherlands, whether they comply with the provisions of the DCGC. If they do not comply with those provisions (e.g., because of a conflicting Nasdaq requirement), we are required to give the reasons for such non-compliance. The DCGC applies to all Dutch companies listed on a government-recognized stock exchange, whether in the Netherlands or elsewhere, including Nasdaq. We do not comply with all the best practice provisions of the DCGC. This may affect our shareholders’ rights and they may not have the same level of protection as a shareholder in a Dutch company that fully complies with the DCGC. See Item 10.B: “Memorandum and Articles of Association” for more information. As a foreign private issuer, we rely in certain cases on Nasdaq Stock Market rules that permit us to comply with applicable Dutch corporate governance practices, rather than the corresponding domestic U.S. corporate governance practices, and therefore our shareholders’ rights differ from the rights they would have as a shareholder of a domestic U.S. issuer. As a foreign private issuer whose ordinary shares are listed on the Nasdaq Capital Market, we are permitted in certain cases to follow Dutch corporate governance practices instead of the corresponding requirements of the Nasdaq Marketplace Rules. A foreign private issuer that elects to follow a home country practice instead of Nasdaq requirements must submit to Nasdaq in advance a written statement from an independent counsel in such issuer’s home country certifying that the issuer’s practices are not prohibited by the home country’s laws. In addition, a foreign private issuer must disclose in its annual reports filed with the SEC each such requirement that it does not follow and describe the home country practice followed instead of any such requirement. We follow Dutch corporate governance practices with regard to the quorum requirements applicable to meetings of shareholders and the provision of proxy statements for general meetings of shareholders, rather than the corresponding domestic U.S. corporate governance practices. In accordance with Dutch law and generally accepted business practices, our articles of association do not provide quorum requirements (other than those which follow from Dutch law) generally applicable to general meetings of shareholders. Although we must provide shareholders with an agenda and other relevant documents for the general meeting of shareholders, Dutch law does not have a regulatory regime for the solicitation of proxies and the solicitation of proxies is not a generally accepted business practice in the Netherlands. As permitted by the listing requirements of Nasdaq, we have also opted out of Nasdaq’s requirements regarding the independence of all members of the compensation, nominating and corporate governance committee. Dutch law and the DCGC do not require that the compensation, nominating and corporate governance committee be composed entirely of independent directors and only requires a mere majority. In accordance with Dutch law and the DCGC, our compensation, nominating and corporate governance committee consists of a majority of members who qualify as independent under applicable Nasdaq standards and under the DCGC. In addition, we do not follow Nasdaq’s requirements regarding Nasdaq Listing Rule 5605(b)(2), which mandates that independent directors must meet at regularly scheduled executive sessions where only independent directors are present. In accordance with Dutch law and the DCGC, our directors may choose to meet in executive sessions at their discretion. Accordingly, our shareholders may not be afforded the same protection as provided under Nasdaq’s corporate governance rules. Any U.S. or other foreign judgments that investors may obtain against us may be difficult to enforce against us in the Netherlands. We are incorporated under the laws of the Netherlands. We currently have only limited operations in the United States. Most of our assets are currently located in the Netherlands. The majority of our board and senior management reside outside the United States. As a result, it may not be possible for investors to effect service of process within the United States upon such persons or to enforce against them or the Company in U.S. courts, including judgments predicated upon the civil liability provisions of the federal securities laws of the United States. In addition, it is not clear whether a Dutch court would impose civil liability on the Company or any of our directors in an original action based solely upon the federal securities laws of the United States brought in a court of competent jurisdiction in the Netherlands. The United States and the Netherlands currently do not have a treaty providing for the reciprocal recognition and enforcement of judgments, other than arbitration awards, in civil and commercial matters. Consequently, a final judgment for payment given by a court in the United States, whether or not predicated solely upon U.S. securities laws, would not automatically be recognized or enforceable in the Netherlands. In order to obtain a judgment which is enforceable in the Netherlands, the party in whose favor a final and conclusive judgment of the U.S. court has been rendered will be required to file its claim with a court of competent jurisdiction in the Netherlands. Such party may submit to the Dutch court the 55 Table of Contents final judgment rendered by the U.S. court. If and to the extent that the Dutch court finds that the jurisdiction of the U.S. court has been based on grounds which are internationally acceptable and that proper legal procedures have been observed, the Dutch court will, in principle, give binding effect to the judgment of the U.S. court, unless such judgment contravenes principles of public policy of the Netherlands. Dutch courts may deny the recognition and enforcement of punitive damages or other awards. Moreover, a Dutch court may reduce the amount of damages granted by a U.S. court and recognize damages only to the extent that they are necessary to compensate actual losses or damages. Enforcement and recognition of judgments of U.S. courts in the Netherlands are solely governed by the provisions of the Dutch Code of Civil Procedure (‘Wetboek van Burgerlijke Rechtsvordering’). Based on the lack of a treaty as described above, U.S. investors may not be able to enforce against us or our board members, representatives or certain experts named herein who are residents of the Netherlands or countries other than the United States any judgments obtained in U.S. courts in civil and commercial matters, including judgments under the U.S. federal securities laws. We may be subject to increased stockholder activism, including potential legal proceedings, which could disrupt our operations and adversely affect our business. We have experienced, and may continue to experience, stockholder activism. In particular, a stockholder that has disclosed a significant ownership position in our ordinary shares has expressed concerns regarding certain aspects of our governance and has indicated that it may seek to initiate proceedings before the Enterprise Chamber of the Amsterdam Court of Appeal (‘Ondernemingskamer’) (the “Enterprise Chamber”) or pursue other actions. Proceedings before the Enterprise Chamber, if initiated, could result in court-ordered investigations into our affairs, the imposition of temporary governance measures, changes to our board of directors or management, or other outcomes that could be adverse to us. Even if such proceedings are not initiated or do not result in adverse findings, responding to activist demands or potential legal actions could require significant management attention, legal and advisory costs, and could divert resources away from the execution of our business strategy. Stockholder activism may also create uncertainty among employees, collaborators, and other stakeholders and could adversely affect our ability to raise additional capital, pursue strategic transactions, or otherwise operate our business effectively. There can be no assurance that any such matters will be resolved in a manner favorable to us.

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.

You should read the following discussion and analysis of our financial condition and results of operations together with our audited financial statements, including the notes thereto, included elsewhere in this Annual Report. The following discussion is based on our financial statements prepared in accordance with IFRS as issued by the IASB which might differ in material respects from GAAP in the United States. In addition to historical financial information, the following discussion and analysis includes forward-looking statements that involve risks, uncertainties and assumptions. See “Cautionary Note Regarding Forward-Looking Statements.” Our actual results and timing may differ materially from those anticipated in these forward-looking statements as a result of many factors, including but not limited to those described under Item 3.D: “Risk Factors” and elsewhere in this Annual Report. 90 Table of Contents A. Operating Results Overview To date, we have financed our operations primarily through our initial public and follow-on offerings, and private placements of equity securities, convertible loans, licensing and research collaborations and to a lesser extent through funding from patient organizations and governmental bodies, such as Rijksdienst voor Ondernemend Nederland (“RVO”). In December 2022, the Company issued 9,381,586 shares to Lilly pursuant to the amended and restated licensing and research collaboration between the Company and Lilly, resulting in gross proceeds of € 14,122,000, with no significant transaction costs. In February 2023, ProQR also received an upfront payment of € 56,412,000. In September 2024, the Company filed a shelf registration statement on Form F-3, which permitted: (a) the offering, issuance and sale by the Company of up to a maximum aggregate offering price of $ 300,000,000 of its ordinary shares, warrants and/or units, and (b) as part of $ 300,000,000, the issuance and sale by the Company of up to a maximum aggregate offering price of $ 75,000,000 of its ordinary shares that may be issued and sold under a sales agreement (the “sales agreement”) with Cantor Fitzgerald & Co. (“Cantor”) in one or more at-the-market (“ATM”) offerings. The Company will pay Cantor a commission equal to 3% of the gross proceeds of the sales price of all ordinary shares sold through Cantor as sales agent under the sale agreement. As of December 31, 2025, no shares have been issued pursuant to this ATM facility. In October 2024, the Company consummated an underwritten public offering of 18,000,000 ordinary shares (the “Offering”) at a public offering price of $ 3.50 per share (the “public offering price”). In addition, the Company granted the underwriters a 30-day option to purchase up to 2,700,000 additional ordinary shares at the public offering price, less underwriting discounts and commissions. The option was partially exercised on October 31, 2024, resulting in the issuance of 1,940,072 shares. The gross proceeds from the Offering and subsequent partial exercise of the underwriters’ option, amounted to $ 69,790,000 (€ 64,600,000) while the transaction costs amounted to approximately € 4,365,000, resulting in net proceeds of approximately € 60,235,000. Concurrently with the Offering, the Company entered into a share purchase agreement with Lilly in a separately negotiated transaction (the “concurrent private placement”), pursuant to which the Company agreed to offer and sell, and Lilly agreed to purchase, 3,523,538 ordinary shares at a price per share equal to the public offering price, for total gross proceeds of approximately $ 12,300,000, subject to a purchase price cap of $ 15,000,000, the consummation of the Offering and the satisfaction of other customary closing conditions. The proceeds of $ 12,300,000 (€ 11,400,000) from the concurrent private placement were received on October 25, 2024. The ordinary shares purchased in the concurrent private placement are not subject to any underwriting discounts or commissions. In December 2024, we announced an expansion of our research partnership with RSRT. 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. As part of the expanded partnership, the Company issued warrants to RSRT to purchase up to 2,144,772 ordinary shares at a fixed price of $ 3.73. At December 31, 2025, we had cash and cash equivalents of € 92,413,000. In 2025, our revenues consist of non-refundable upfront fees and milestone payments in connection with collaboration and license agreements. To date, we have not generated any revenues from royalties or product sales. Based on our current plans, we do not expect to generate royalty or product revenues for the foreseeable future. We have generated losses since our inception in February 2012. For the years ended December 31, 2025, 2024 and 2023, we incurred net losses of € 42,184,000, € 27,763,000, and € 27,735,000, respectively. At December 31, 2025, we had an accumulated deficit of € 467,506,000. We expect to continue incurring losses for the foreseeable future as we invest in our Axiomer platform and continue our preclinical studies of our product candidates. 91 Table of Contents Recent Accounting Pronouncements There are no IFRS standards as issued by the IASB or interpretations issued by the IFRS interpretations committee that are effective for the first time for financial years beginning on or after January 1, 2025 that had a material impact on our financial statements. A number of new standards, amendments to standards and interpretations are effective for annual periods beginning on January 1, 2026 and have not been applied in preparing these consolidated financial statements. None of these are expected to have a material impact on the Company in the current or future reporting periods and on foreseeable future transactions. The Company does not plan to adopt these standards early. On January 1, 2027, IFRS 18 Presentation and Disclosure in Financial Statements will replace IAS 1 Presentation of Financial Statements and is required to be implemented retrospectively. The new standard revises the structure and presentation of the primary financial statements, introduces enhanced aggregation and disaggregation requirements, and requires additional disclosures for Management-Defined Performance Measures (“MPMs”). The Company is continuing to assess the impact of this new standard and based on our initial assessment we do not expect the adoption of IFRS 18 to have a material impact outside the above mentioned changes which may or may not be material. We do not plan to early adopt this standard. Foreign Private Issuer Exemptions As a foreign private issuer, we are not subject to the same requirements that are imposed upon U.S. domestic issuers by the SEC. Under the Exchange Act, we will be subject to reporting obligations that, in certain respects, are less detailed and less frequent than those of U.S. domestic reporting companies. For example, although we intend to report our financial results on a quarterly basis, we will not be required to issue quarterly reports, proxy statements that comply with the requirements applicable to U.S. domestic reporting companies, or individual executive compensation information that is as detailed as that required of U.S. domestic reporting companies. We will also have four months after the end of each fiscal year to file our annual reports with the SEC and will not be required to file current reports as frequently or promptly as U.S. domestic reporting companies. We may also present financial statements pursuant to IFRS instead of pursuant to U.S. GAAP. These exemptions and leniencies will reduce the frequency and scope of information and protections available to you in comparison to those applicable to a U.S. domestic reporting companies. Furthermore, our senior management, directors and principal shareholders are exempt from the short-swing profit liability provisions contained in Section 16 of the Exchange Act. Financial Operations Overview Revenue Revenues to date have consisted principally of non-refundable upfront fees and research and development service fees in connection with collaboration and license agreements. Other Income Other income mainly consists of the net proceeds from the Company’s divestment of its late-stage ophthalmic intellectual property assets, sepofarsen and ultevursen, to Théa, and grant income from government-related organizations and charities. (Government) Grants are recognized in other income in the same period in which the related research and development expenses are recognized. Research and Development Expenses Research and development expenses consist principally of: ● salaries for research and development staff and related expenses, including social security costs and share-based compensation expenses; 92 Table of Contents ● costs related to our preclinical and clinical activities and trials, including costs paid to CROs; ● costs for production of (pre-)clinical compounds and drug substances by contract manufacturers, including supporting studies such as stability studies and other analysis of the compounds; ● costs of related facilities, materials and equipment; and ● depreciation of tangible fixed assets used to develop our product candidates. Our research and development expenses in 2025, 2024 and 2023 primarily related to the following key programs: ● Axiomer Research and development expenses relating to our Axiomer platform, including expenses relating to the work performed under our research and collaboration agreement with Lilly, primarily consist of salaries, costs for production of the preclinical compounds and costs paid to CROs for our preclinical studies. Other significant costs are our internal laboratory costs, including laboratory consumables and allocated housing expenses, as well as consultancy costs in support of our research and development activities for Axiomer. ● Sepofarsen for the treatment of LCA In 2022 and 2021, the research and development costs relating to sepofarsen primarily consisted of salaries and costs paid to CROs for clinical studies, including statistical analyses, and manufacturing of process performance qualification drug substance batches as well as (pre-)commercial drug product batches. Other significant costs are our internal laboratory costs, including the materials used in the labs and rent allocated to the lab space, as well as consultancy costs in support of our research and development activities. In 2023, costs related to sepofarsen were limited and since 2024 no costs were incurred. ● Ultevursen for the treatment of Usher syndrome In 2022 and 2021, the research and development costs relating to ultevursen primarily consisted of salaries, costs paid to CROs for managing the clinical study, costs for statistical analyses and manufacturing of process performance qualification drug substance batches. Other significant costs are our internal laboratory costs, including the materials used in the labs and rent allocated to the lab space, as well as consultancy costs in support of our research and development activities. In 2023, costs related to ultevursen were limited and since 2024 no costs were incurred. Our research and development expenses may vary substantially from period to period based on the timing of our research and development activities. Research and development expenses are expected to increase as we continue our joint research projects with Lilly and our investments in the Axiomer platform, while progressing our internal pipeline targets towards clinical development. Changes in internal or external variables with respect to the development of our Lilly collaboration program and the development of our Axiomer platform and resulting product candidates could result in a significant change in the costs and/or timing associated with the development of such product candidates. For example, if the FDA, EMA or other regulatory authority were to require us to conduct preclinical and clinical studies beyond those which we currently anticipate, or if we experience significant delays in enrollment in any future clinical trials, we could be required to expend significant additional financial resources and time on the completion of our development programs. General and Administrative Expenses Our general and administrative expenses consist principally of: ● salaries for employees other than research and development staff and related expenses, including social security costs and share-based compensation expenses; 93 Table of Contents ● professional fees for auditors and other consulting expenses not related to research and development activities; ● professional fees for lawyers; ● cost of facilities, communication and office expenses; ● IT expenses; and ● depreciation of property, plant and equipment not related to research and development activities. Since our IPO in September 2014 we have incurred additional costs associated with operating as a public company. These public company-related expenses include costs of additional personnel, additional legal fees, accounting and audit fees, board of directors’ liability insurance premiums and costs related to investor relations. We expect that our general and administrative expenses will remain fairly stable in upcoming years. Share-Based Compensation Share-based compensation reflects the costs of our equity-settled share option plan, which are measured at the fair value of the options and restricted stock units at the grant date, and which are recognized over the course of each of the separate vesting tranches of the applicable vesting period of the options and restricted stock units involved. The share-based compensation is recognized in the income statement, with a corresponding entry to the equity-settled employee benefits reserve, which is part of equity. See Note 12(d) to the financial statements included elsewhere in this Annual Report for additional information on share-based compensation. Financial Income and Expense To date, our cash and cash equivalents have been deposited primarily in savings, short-term deposit accounts, and money market funds which generate interest income. In 2025, 2024 and 2023 we held deposits in both euro and U.S. dollars. Financial expenses primarily consist of interest expenses on convertible loans and government loans. Financial income and expense also includes foreign exchange gains or losses on our U.S. dollar denominated cash and cash equivalents and other foreign currency denominated monetary items. Results related to derecognition of financial liabilities Results related to derecognition of financial liabilities represent gains or losses arising from the extinguishment of convertible loans in 2023. Results related to financial liabilities measured at fair value through profit or loss Results related to financial liabilities measured at fair value through profit or loss (“FVTPL”) represent changes in the fair value of derivative financial instruments since their initial recognition. In 2025, 2024 and 2023, these derivative financial instruments consist of conversion options and warrants issued in connection with our convertible loans and partnership agreements. The warrants that were part of the original agreement with convertible loan issuers expired during 2025 and have been derecognized. The remaining warrants as part of the amended agreement with the convertible loan issuers have not yet expired at December 31, 2025 and therefore have not been derecognized. The warrants related to partnership agreements were issued in 2024 and remain outstanding at December 31, 2025. Income Tax Due to the operating losses incurred since inception, the Company has no income tax provisions as at December 31, 2025. Realization of deferred tax assets is dependent on future earnings, if any, the timing and amount of which are uncertain. Accordingly, we have not yet recognized any deferred tax asset related to operating losses. 94 Table of Contents Results of Operations Comparison of the periods ended December 31, 2025 and 2024 The following table sets forth our results of operations for the periods indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ Change ​ ​ (€ in thousands) Revenue 15,906 18,905 (2,999) Other income 441 640 (199) Research and development costs (44,733) (36,356) (8,377) General and administrative costs (15,060) (13,661) (1,399) Operating result (43,446) (30,472) (12,974) Financial income 2,333 3,251 (918) Financial expense ​ (1,287) ​ (1,084) ​ (203) Results related to financial liabilities measured at FVTPL ​ 235 ​ 345 ​ (110) Corporate income taxes ​ (19) ​ 197 ​ (216) Net loss (42,184) (27,763) (14,421) ​ Revenue In 2025, we realized revenue from our license and research collaboration agreement with Lilly amounting to € 15,906,000 (2024: € 18,905,000). The decrease in Lilly revenue is due to fewer milestones being achieved in 2025 (€ 3,922,000) compared to 2024 (€ 5,096,000) and the finalization of certain targets in 2024, consistent with expected fluctuations as portfolio priorities shift over time. Other income In 2025 and 2024, other income consisted primarily of grant income from our RSRT partnership that helps support the advancement of AX-2402, our program for the treatment of Rett syndrome. This partnership consists of two agreements that were entered into in January and December 2024, respectively, and we are eligible to receive up to $ 9.2 million under these agreements. In 2025, we realized other income of € 441,000 (2024: € 640,000). The decrease in other income is due to delays in timelines. As at December 31, 2025 other income related to the initial RSRT agreement has been recognized in full and work has not commenced on the expanded RSRT agreement. Research and development costs Research and development costs amounted to € 44,733,000 for the year ended December 31, 2025 compared to € 36,356,000 for the year ended December 31, 2024. These costs were primarily related to the development of our Axiomer platform, including costs incurred under the Lilly collaboration, and investments in our own pipeline targets. Research and development expenses are expected to increase as we continue our joint research projects with Lilly and our investments in the Axiomer platform, while progressing our internal pipeline targets towards clinical development. Our research and development expenses are highly dependent on the development phases of our product candidates. The increase in research and development costs in the year ended December 31, 2025, compared to the year ended December 31, 2024, was due to higher outsourced research and development activities related to our joint research projects with Lilly, increased investments in our own pipeline targets and our investments in the Axiomer platform. In addition, in 2025 there was higher allocation of general and administrative costs to research and development costs due to a higher number of employees working in research and development, as compared to 2024. 95 Table of Contents General and administrative costs General and administrative costs amount to € 15,060,000 for the year ended December 31, 2025 and € 13,661,000 for the year ended December 31, 2024. The increase in general and administrative costs in the year ended December 31, 2025 compared to the year ended December 31, 2024 is primarily attributable to increased employee benefits resulting from changes in senior management in 2025. Financial income We had financial income of € 2,333,000 for the year ended December 31, 2025, as compared to € 3,251,000 for the year ended December 31, 2024. The financial income mainly reflects interest income earned on cash and cash equivalents in 2025 and 2024. Financial expenses Financial expenses amounted to € 1,287,000 for the year ended December 31, 2025, as compared to € 1,084,000 for the year ended December 31, 2024. The increase in 2025 compared to 2024 is mainly due to a larger foreign exchange loss. Results related to financial liabilities measured at fair value through profit or loss Results related to financial liabilities measured at FVTPL amounted to a gain of € 235,000 for the year ended December 31, 2025, as compared to a gain of € 345,000 for the year ended December 31, 2024. These results relate to fair value changes in our derivative financial instruments, consisting of issued warrants. The gains in 2025 and 2024 were due to the decrease in the fair value of warrants, mainly due to the decrease in ProQR’s share price. Comparison of the periods ended December 31, 2024 and 2023 Reference is made to our Annual Report on Form 20-F for the fiscal year ended December 31, 2024, filed with the SEC on March 13, 2024, for a comparison of the periods ended December 31, 2024 and 2023. B. Liquidity and Capital Resources To date, we have financed our operations primarily through our initial public and follow-on offerings, our ATM facility and private placements of equity securities, convertible loans, licensing and research collaborations and to a lesser extent through funding from patient organizations and governmental bodies, such as RVO. Cash and Funding Sources The table below summarizes our main sources of financing for the years ended December 31, 2025, 2024 and 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Equity ​ ​ ​ Lilly Upfront and ​ ​ ​ ​ ​ ​ Capital ​ Milestone Payments ​ Total ​ ​ (€ in thousands) Year ended December 31, 2023 — ​ 56,412 56,412 Year ended December 31, 2024 71,635 ​ 5,096 ​ 76,731 Year ended December 31, 2025 — ​ 3,922 ​ 3,922 Total 71,635 65,430 137,065 ​ Equity capital In 2024 our funding consisted of Offering of 18,000,000 ordinary shares and the respective option that resulted in additional issuance of 1,940,072 ordinary shares, at the public offering price of $ 3.50 per share. The gross proceeds from the Offering and subsequent partial exercise of the underwriters’ option, amounted to $ 69,790,000 (€ 64,600,000) while the transaction costs amounted to approximately € 4,365,000, resulting in net proceeds of approximately € 60,235,000. 96 Table of Contents Concurrently with the Offering, we entered into the concurrent private placement with Lilly pursuant to which we agreed to offer and sell, and Lilly agreed to purchase, 3,523,538 ordinary shares at a price per share equal to the public offering price. The net proceeds from the concurrent private placement amount to approximately € 11,400,000. We issued shares in 2022 and 2024. Our share issuances are set out in more detail in Note 12 (a) to the financial statements as included elsewhere in this Annual Report. As at December 31, 2025 our outstanding shares totaled 105,361,064. The following items may result in future dilution for our shareholders: ● 1,054,010 treasury shares held by the Company, which can be used for all general purposes including option exercises under the equity incentive plan, as amended in May 2024; ● 1,295,842 treasury shares held by the ESOP foundation, which can be used for option exercises under the equity incentive plan, as amended in May 2024; ● 15,804,160 shares authorized for issuance for future grants under the equity incentive plan, as amended in May 2024; ● 376,952 warrants held by former convertible debt holders; ● 2,144,772 warrants held by RSRT. If all of the above items were converted into shares at December 31, 2025, the number of outstanding shares would be 126,036,800. Convertible loans and government borrowing We received convertibles loans and government borrowing in 2021. Our convertible loans and government borrowings are set out in more detail in Note 13 to the financial statements as included elsewhere in this Annual Report. Lilly upfront and milestone payments In 2025, our sources of funding included the receipt of milestone payments amounting to $ 4,500,000 (€ 3,922,000) under the collaboration agreement with Lilly (2024: $ 5,500,000 (€ 5,096,000)). In 2023, we received the upfront payments under the collaboration agreement with Lilly, which are reflected in changes in working capital. For more details refer to Note 16 to the financial statements included elsewhere in this Annual Report. Cash Flows The table below summarizes our statement of cash flows for the years ended December 31, 2025 and 2024. ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ Change ​ ​ (€ in thousands) ​ ​ ​ ​ ​ ​ ​ Net cash (used in) / generated by operating activities (52,791) (36,393) (16,398) Net cash (used in) / generated by investing activities (1,020) (4,073) 3,053 Net cash (used in) / generated by financing activities (1,836) 70,276 (72,112) Net (decrease) / increase in cash and cash equivalents (55,647) 29,810 (85,457) Currency effect cash and cash equivalents (1,348) 673 (2,021) Cash and cash equivalents at the beginning of the period 149,408 118,925 30,483 Cash and cash equivalents at the end of the period 92,413 149,408 (56,995) ​ 97 Table of Contents Net cash used in operating activities amounted to € 52,791,000 in the year ended December 31, 2025, whereas net cash used in operating activities amounted to € 36,393,000 in the year ended December 31, 2024. Total operating costs increased by € 9,776,000 in 2025 compared to 2024 and changes in working capital increased by € 4,897,000, both of which had a negative impact on net cash generated by operating activities. Net cash used in investing activities in the year ended December 31, 2025 is mainly driven by purchases of laboratory equipment and other fixed assets of € 1,020,000 (2024: € 1,418,000). In addition, in 2024 ProQR paid the remaining portion of costs of € 2,655,000 related to the transaction with Théa. Net cash used in financing activities amounted to € 1,836,000 in the year ended December 31, 2025 compared to net cash generated by financing activities amounted to € 70,276,000 in the year ended December 31, 2024. In 2025, net cash used in financing activities included repayments of the lease liability for the Company’s Leiden headquarters amounting to € 1,905,000. In 2024, net cash generated by financing activities consists of the net proceeds from the offering of € 60,235,000 and the share sale to Lilly of € 11,400,000. The cash inflows in 2024 were offset by repayments of the lease liability for the Company’s Leiden headquarters amounting to € 1,582,000. Reference is made to our Annual Report on Form 20-F for the fiscal year ended December 31, 2024, filed with the SEC on March 13, 2024, for a comparison of the periods ended December 31, 2024 and 2023. For a description of our financial commitments, see below. Funding Requirements Our material cash requirements from known contractual and other obligations include contractual commitments to repay borrowings, lease liabilities, and trade and other payables. In 2026, such cash requirements include the following undiscounted amounts: ● Borrowings amounting to € 5,162,000 ● Lease liabilities amounting to € 1,978,000 ● Trade and other payables amounting to € 8,238,000 Beyond 2026, our cash requirements include the following undiscounted amounts: ● Lease liabilities amounting to € 10,682,000 We expect that our cash and cash equivalents will enable us to fund our operating expenses and capital expenditure requirements into mid-2027. We have based this estimate on assumptions that may prove to be wrong, and we could use our capital resources sooner than we currently expect. Our present and future funding requirements will depend on many factors, including, among other things: ● the investments required to further develop our Axiomer platform and the results of current and potential future collaborations involving the Axiomer technology. ● the progress, timing, resumption and completion of preclinical testing and clinical trials for our current or any future product candidates; ● the number of potential new product candidates we identify and decide to develop; ● the costs involved in growing our organization to the size needed to allow for the research, development and potential commercialization of our current or any future product candidates; 98 Table of Contents ● the costs involved in filing patent applications and maintaining and enforcing patents or defending against claims or infringements raised by third parties; ● the time and costs involved in obtaining regulatory approval for our product candidates and any delays we may encounter as a result of evolving regulatory requirements or adverse results with respect to any of these product candidates; ● any licensing or milestone fees we might have to pay during future development of our current or any future product candidates; ● the amount of revenues, if any, we may derive from upfront, milestone or royalty payments resulting from licensing and research collaboration agreements. Our ability to execute our operating plans and access additional capital may be affected by a variety of factors, including market conditions, regulatory developments, and stockholder actions. For more information as to the risks associated with our future funding needs, see Item 3.D: “Risk Factors”. Capital Expenditures The following table sets forth our capital expenditures for the years ended December 31, 2025, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 ​ ​ (€ in thousands) Purchases of property, plant and equipment 1,020 1,418 1,371 ​ Purchases of property, plant and equipment primarily consist of investments in laboratory equipment. Such investments decreased in 2025 compared to 2024 as the investments of the Company were focused on outsourced research and development activities instead of its in-house oligonucleotide manufacturing capacity. Commitments Our commitments consist of rent, patent license agreements, clinical support agreements, research and development commitments. Refer to Notes 25 and 26 to the financial statements as included elsewhere in our Annual report and Item 4.B: “Business Overview” for more details on our commitments. C. Research and Development See Item 4.B: “Business Overview” and Item 5: “Operating and Financial Review and Prospects”. D. Trend Information Other than as disclosed elsewhere in this Annual Report, we are not aware of any trends, uncertainties, demands, commitments or events for the period from January 1, 2025 to December 31, 2025 that are reasonably likely to have a material adverse effect on the Company’s net income, profitability, liquidity or capital resources, or that caused the reported financial information to be not necessarily indicative of future operating results or financial conditions. For a discussion of trends, see Item 5.A: “Operating results”. E. Critical Accounting Policies and Significant Judgments and Estimates Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which we have prepared in accordance with IFRS as issued by the IASB. The preparation of these financial 99 Table of Contents statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenues and expenses during the reporting periods. Actual results may differ from these estimates under different assumptions or conditions. There have been no material adjustments to prior period estimates for any of the periods included in this Annual Report. Significant estimates and judgements are disclosed in disclosure Note 2 Basis of preparation to the financial statements, under (e) Use of estimates and judgements. Our significant accounting policies are fully described in the notes to our financial statements appearing elsewhere in this Annual Report.