{"url_path":"/sec/adxn/10-k/2026/item-4","section_key":"item-4","section_title":"Item 4 Information on the Company.","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-05-15","source_url":"https://www.sec.gov/Archives/edgar/data/1574232/0001104659-26-062447-index.html","accession_number":"0001104659-26-062447","cik":"0001574232","ticker":"ADXN","issuer_name":"Addex Therapeutics Ltd.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1574232/0001104659-26-062447-index.html","primary_entity_key":"0001574232","primary_entity_name":"Addex Therapeutics Ltd."},"word_count":14209,"has_tables":true,"body_markdown":"Item 4. Information on the Company.\n\nA.\n\nHistory and Development of the Company\n\nOur legal and commercial name is Addex Therapeutics Ltd. We are a Swiss limited company organized under the laws of Switzerland. We were founded in 2002 with an indefinite duration. We are currently registered in Geneva, Switzerland. Our principal executive offices are located at Chemin des Mines 9, CH-1202 Geneva, Switzerland. Our telephone number is +41 884 1555. Investors should contact us for any inquiries through the address and telephone number of our principal executive office, or via our U.S. address at 1968 S Coast Hwy #1915, Laguna Beach, CA 92651. We maintain a website at *www.addextherapeutics.com*. The reference to our website is an inactive textual reference only and the information contained in, or that can be accessed through, our website is not a part of this Annual Report on Form 20-F. The SEC maintains an Internet site that contains reports and other information that we file electronically with the SEC at *www.sec.gov*.\n\nB.\n\nBusiness Overview\n\n**Overview**\n\nWe are a clinical-stage pharmaceutical company focused on the development of a portfolio of novel orally available small molecule drug candidates. Our business comprises of a pipeline of proprietary clinical and preclinical stage drug candidates that are being developed by our partner and internally. We or our partner are developing these clinical and preclinical stage proprietary drug candidates for diseases for which there are no approved therapies or where improved therapies are needed including post-stroke sensorimotor recovery, traumatic brain injury, or TBI, recovery, substance use disorders, or, SUD, and chronic cough. We also hold a 20% equity interest in a spin out company, Neurosterix US Holdings LLC, a private company developing a portfolio of preclinical stage proprietary drug candidates for schizophrenia and mood disorders.\n\nOur lead development compound is dipraglurant, a metabotropic glutamate receptor subtype 5 negative allosteric modulator, or mGlu5 NAM, currently under evaluation for future development in post-stroke/TBI recovery. On April 30, 2025, we announced entering into an option and collaboration agreement with Sinntaxis AB for an exclusive license to intellectual property covering the use of mGlu5 inhibitors for the treatment of brain injury recovery. The agreement also includes a research collaboration under which the Sinntaxis team will complete evaluation of dipraglurant for the treatment of brain injury recovery.\n\n30\n\n[Table of Contents](#TOC)\n\nOur second development compound, ADX71149 is a novel orally active metabotropic glutamate receptor subtype 2 positive allosteric modulator, or mGlu2 PAM. On July 22, 2024, we announced that our Partner Janssen terminated the development of drug candidate ADX71149, because the Phase 2 study did not achieve statistical significance for the primary endpoint. On April 17, 2025, we announced that our partner Janssen terminated our partnership agreement and returned to us the program including all related intellectual property to the Group. We are currently evaluating the future development of ADX71149.\n\nOur third development program is GABAB PAM for substance use disorders. In 2024, we completed a funded research program to discover novel gamma-aminobutyric acid subtype-b positive allosteric modulators, or GABAB PAMs, for Indivior PLC, or Indivior. On August 27, 2024, Indivior selected a compound for future development in substance use disorders and undertakes all future development of their selected compound. On May 12, 2025, we announced that our partner, Indivior, had successfully completed IND enabling studies with their selected compound.\n\nOur fourth development program is GABAB PAM for chronic cough. Under the terms of the agreement with Indivior, we have exercised our right to select a compound to advance our own independent GABAB PAM program for the treatment of chronic cough. Our selected compound has demonstrated robust anti-tussive activity in multiple preclinical models of chronic cough compared to reference drugs. Subject to securing funding or a development partner, we plan to initiate IND enabling studies.\n\nWe cannot forecast with any degree of certainty which proprietary products or indications, if any, will be subject to future collaborative arrangements, in whole or in part, and how such arrangements would affect our development plan or capital requirements. To date, we have secured grants and other funding from government and non-governmental organizations. As we advance our clinical and preclinical programs, we will continue to apply for subsidies, grants and government or agency sponsored studies that could offset or reduce our development costs.\n\nThe development and commercialization of drugs is highly competitive. We compete with a variety of multinational pharmaceutical companies and specialized pharmaceutical companies, including products approved for marketing and/or drug candidates under development, for each of the drug candidates and each of the indications for which we are developing. Furthermore, government authorities in the United States, at the federal, state and local levels, and in other countries, extensively regulate, among other things, the research, development, testing, manufacture, packaging, storage, recordkeeping, labeling, advertising, promotion, distribution, marketing, import and export of pharmaceutical products, such as those we are developing. The processes for obtaining regulatory approvals in the United States and in foreign countries, along with subsequent compliance with applicable statutes and regulations, require the expenditure of substantial time and financial resources.\n\n**The Neurosterix Transaction**\n\nOn April 2, 2024, we divested our allosteric modulator discovery platform and a portfolio of pre-clinical programs to a new Swiss company, Neurosterix Pharma Sàrl (equivalent to an LLC), focused on the discovery and development of novel orally available allosteric modulator drug candidates, including M4PAM for schizophrenia, mGlu7NAM for mood disorders and mGlu2NAM for mild neurocognitive disorders. In connection with the Transaction, we received gross proceeds of CHF 5.0 million and a 20% equity interest in Neurosterix US Holdings LLC, the parent company of Neurosterix Pharma Sàrl. Neurosterix US Holdings LLC received USD 65.0 million from a syndicate of investors led by Perceptive Advisors.\n\nThe divestment of our discovery platform and early-stage programs included the transfer of the associated research, as well as all development and administration staff, with the exception of our Head of Finance. A service agreement was put in place to allow key members to continue supporting us in executing our business strategy at zero cost for us until December 31, 2024. As of January 1, 2025, the agreement was not formally renewed. However, Neurosterix agreed to continue to provide the Group with access to research and development staff.\n\n31\n\n[Table of Contents](#TOC)\n\nDevelopment Portfolio\n\nUsing our drug development expertise, we have established a portfolio of clinical and preclinical programs, internally and with partners.\n\nExternally Developed Out-licensed Drug Candidate\n\nGABAB PAM for the treatment of substance use disorder. Our partner, Indivior, has licensed worldwide rights to our GABAB PAM program and is responsible for all development, manufacture and commercialization of any selected GABAB PAM drug candidates. Under the agreement, we were responsible for executing a research program funded by Indivior to discover novel drug candidates. Following the completion of the funded research program, Indivior selected a compound for future development in substance use disorders on August 27, 2024. On May 12, 2025, we announced that our Partner Indivior has successfully completed the IND enabling studies. We believe that substance use disorder is an indication with a significant commercial opportunity. Existing therapies often do not provide effective control of symptoms or have side effects that discourage adherence. Subject to regulatory approval, we believe that GABAB PAM may offer an innovative and differentiated treatment approach from existing therapies and provide significant benefit to patients.\n\n**Internally Developed Drug Candidates**\n\nDipraglurant for post-stroke/TBI recovery. There is currently a large unmet need in post-stroke sensorimotor recovery as there are no drugs to support or enhance sensorimotor recovery, and current therapies rely on retraining and physiotherapy, with rehabilitation taking 6 months or more. Functional recovery by stimulating network connectivity in the brain has been demonstrated with dipraglurant which significantly restored functional control in animal studies. On April 30, 2025, we announced entering into an option and collaboration agreement with Sinntaxis AB for an exclusive license to intellectual property covering the use of mGlu5 inhibitors for the treatment of brain injury recovery. The agreement also includes a research collaboration under which the Sinntaxis team will complete evaluation of dipraglurant for the treatment of brain injury recovery. We are conducting further in vivo testing in stroke models, and subject to funding or securing a development partner, we plan to commence a Phase 2a clinical study.\n\nADX71149, mGlu2 PAM, indication under evaluation. Our drug candidate, ADX71149 is a novel orally active metabotropic glutamate receptor subtype 2 positive allosteric modulator, or mGlu2 PAM. On July 22, 2024, we announced that our Partner Janssen terminated the development of drug candidate ADX71149, because the Phase 2 study did not achieve statistical significance for the primary endpoint. On April 17, 2025, we announced that our partner Janssen terminated our partnership agreement and returned to us the program including all related intellectual property to the Group. We are currently evaluating the future development of ADX71149.\n\n32\n\n[Table of Contents](#TOC)\n\nGABAB PAM for the treatment and chronic cough. Our license agreement with Indivior provides for a funded research program, under which we have the right to select drug candidates for exclusive development in certain indications outside of SUD. We plan to develop our selected drug candidates in chronic cough, an indication that has been validated with baclofen, an orthosteric agonist of the GABAB receptor. We have demonstrated preclinical proof of concept of GABAB PAM in various in vivo models of cough and are in late clinical candidate selection phase. Subject to securing funding or a development partner, we plan to initiate IND enabling studies.\n\n**Spin out company – Neurosterix LLC**\n\nOn April 2, 2024, we divested a part of our business to the spin out company Neurosterix. We received a cash consideration of CHF 5.0 million and a 20% equity interest in Neurosterix LLC, parent company of Neurosterix Group. The lead program, M4 PAM for schizophrenia, is currently advancing through phase 1 clinical studies.\n\nIntroduction to Allosteric Modulation\n\nDisease and the Role of Proteins\n\nProteins are complex biological molecules that have many structural and functional roles in the body. They are critical components in the lines of communication between the cells of the body known as signaling pathways. It is now recognized that signaling pathways are altered in many disease states through changes in the function of essential proteins underlying the series of cellular events required for normal biological activity. Most drug treatments are focused on modifying these biological signaling pathways by altering the activity profile of selected proteins suspected to play a key role in the manifestation of a particular disease. The major proteins targeted in drug discovery include membrane-bound receptors, such as G-protein coupled receptors, or GPCRs, or ionotropic (ion channels) receptors and enzymes.\n\nGPCRs as Drug Targets\n\nGPCRs are the largest family of integral membrane receptors, accounting for approximately 3-4% of the human genome. GPCRs have evolved to recognize a range of endogenous stimuli and act to transmit messages encoded in stimuli from the exterior to the interior of the cell. The ubiquitous cell surface distribution of GPCRs and their involvement in virtually all biological processes have made GPCRs extremely attractive targets for drug development. In fact, most currently marketed drugs act on GPCRs, emphasizing their importance for drug development.\n\nConventional Approaches to GPCR Drug Discovery\n\nThe drug discovery process involves the design of molecules that interact with a target with high specificity and efficacy. Traditional approaches to drug discovery focus on mimicking or inhibiting the actions of the endogenous activator for a target receptor. Conventionally, this has been done by the design and chemical synthesis of small molecule agonists (activators) or antagonists (inhibitors) that act in a competitive manner through interaction with the same binding site as the endogenous activator.\n\n33\n\n[Table of Contents](#TOC)\n\nCompetitive agonists and antagonists must have a sufficiently high affinity for the target receptor to displace the endogenous activator and must be maintained at a sufficiently high concentration in the region of the receptor in order to exert an effect. Under these conditions, agonists will induce an activated state and antagonists will induce an inactivated state, and in both states, receptors will not be responsive to natural fluctuations in the levels of endogenous activator, thereby interfering with normal physiological signaling.\n\nAlthough this approach has historically yielded a number of blockbuster drugs, such as Clopidogrel, or Plavix, Salmeterol, or Serevent, and Aripiprazole, or Abilify, significant challenges remain with respect to the continued development of therapeutically useful GPCR competitive agonists or antagonists due to either lack of receptor selectivity or undesirable side effects.\n\nAllosteric Modulators as GPCR Drugs\n\nIn contrast to competitive orthosteric compounds, allosteric modulators of GPCRs interact with binding sites that are topographically distinct from the binding site of the endogenous activator, and therefore do not compete with the endogenous activator. This means that allosteric modulators do not activate or inhibit receptors on their own, but only in the presence of an endogenous activator do they enhance (positively modulate) or inhibit (negatively modulate) the natural physiological activity of the receptor. Consequently, allosteric modulators offer the possibility to preserve normal physiological receptor function while controlling pathologic activity caused by over- or under-activation of an endogenous receptor.\n\nWe believe that by applying this non-competitive allosteric modulator approach, we may be able to produce efficacious drug candidates with potentially beneficial properties:\n\n●*Novel drug class:*Allosteric modulators are a novel class of orally available small molecule drug candidates with chemical structures unrelated to that of competitive agonist or antagonist drugs and, as such, represent drug candidates with a high potential for composition of matter patent protection.\n\n●*Superior receptor sub-type selectivity:*The binding site for an endogenous activator is in general, highly conserved within a GPCR family and achieving receptor subtype selectivity within a family has not always been possible for competitive agonists. The best examples of this are the muscarinic acetylcholine and the metabotropic glutamate receptor families, for which developing competitive, sub-type selective agonists have not been successful thus far. In contrast, allosteric modulator binding sites, being independent of endogenous stimuli, have evolved with a much higher structural diversity than endogenous activator binding sites and consequently offer the potential for the synthesis of drug candidates with much greater sub-type selectivity.\n\n●*Ability to discover small molecule drugs for a greater number of GPCR targets:*Several GPCR targets are currently thought to be beyond the reach of conventional competitive drug discovery approaches due to the complexity of the interaction of the endogenous activator with the receptor; including, for example certain peptides, high molecular weight hormones and lipids. For these targets, the allosteric modulator approach represents a novel pathway to develop orally active activator or inhibitor small molecules.\n\n●*Ability to re-address well characterized and clinically validated GPCR targets where the pharmaceutical industry has exhausted competitive compound drug discovery approaches:* Allosteric modulator drug candidates offer a promising way to revisit these targets, providing novel small molecules while capitalizing on the existing knowledge on well-validated GPCR targets.\n\n●*Improved safety:*Allosteric modulators control pathologic activity while preserving natural physiological signaling activity due to their lack of effect in the absence of the endogenous activator. In addition, they show no or less tolerance to their effect when chronically administered, thereby not requiring increased dosing as is often the case with competitive compounds. Together with their superior selectivity, these allosteric modulator compounds have the potential for improved safety compared to their competitive analogs.\n\n●*Clinical use in combination:*Given that allosteric modulators target different binding sites to conventional agonists or antagonists, allosteric modulator drugs may find clinical utility in combination therapies for certain clinical indications.\n\n34\n\n[Table of Contents](#TOC)\n\nOrally available brain penetrant small molecule drug candidates that are highly selective for their therapeutic targets and interact with their target in a modulatory manner preserving natural physiological signaling are particularly suitable for chronic diseases such as neurological ones.\n\nCompetitive Positioning in Allosteric Modulation drug discovery\n\nSince our inception in 2002, we have focused exclusively on allosteric modulation drug discovery and development and all our programs have been developed in house by leading experts in the field of allosteric modulation with years of experience in both industry and academia.\n\nOur lead development compound is dipraglurant, a metabotropic glutamate receptor subtype 5 negative allosteric modulator, or mGlu5 NAM, currently under evaluation for future development in post-stroke/ TBI recovery. We entered into an option and collaboration agreement with Sinntaxis AB for an exclusive license to intellectual property covering the use of mGlu5 inhibitors for the treatment of brain injury recovery.\n\nOur second development compound, ADX71149 is a novel orally active metabotropic glutamate receptor subtype 2 positive allosteric modulator, or mGlu2 PAM. Originally developed in collaboration with Janssen, the program has since returned to us and we are currently evaluating the future development of ADX71149.\n\nOur third development program is a GABAB PAM program which has been licensed to Indivior. We have completed a research program funded by Indivior to discover novel GABAB PAM drug candidate and under the terms of the agreement, on August 27, 2024, Indivior selected a drug candidate for the substance use disorder indication whilst we select a drug candidate for our independent chronic cough program. On May 12, 2025, we announced that our partner Indivior has successfully completed the IND enabling studies of their drug candidate for the substance use disorders.\n\nOur fourth development program is GABAB PAM for the treatment of chronic cough. Our selected compound has demonstrated robust anti-tussive activity in multiple preclinical models of chronic cough compared to reference drugs. Subject to securing funding or development partner, we plan to initiate IND enabling studies.\n\nOur Strategy\n\nSince our inception through December 31, 2025, we have raised an aggregate of CHF 356.6 million in equity financing and generated an aggregate of CHF 66.8 million in revenue, which we have used to discover and develop our pipeline of drug candidates. We have also raised gross proceeds of CHF 5.0 million and acquired a 20% equity interest in Neurosterix US Holdings LLC as part of the Neurosterix Transaction executed on April 2, 2024. The key elements of our strategy include the following:\n\n●*Continue to evaluate dipraglurant for post-stroke/TBI recovery.*We entered into an option agreement and collaboration agreement with Sinntaxis AB for an exclusive license to intellectual property covering the use of mGlu5 inhibitors for the treatment of brain injury recovery;\n\n●*Evaluate new indications for ADX71149.* We are currently evaluating a number of potential indications for ADX71149. We have drug product ready and subject to securing funding or collaborative arrangements, plan to initiate clinical studies;\n\n●*Continue to advance our GABAB PAM program.*We completed a funded research program to discover novel GABAB PAM drug candidate for Indivior. As part of the research agreement, Indivior and us selected a drug compound for future development in substance use disorders and chronic cough, respectively. Our partner, Indivior, has successfully completed IND enabling studies for their drug candidate for the substance use disorders. Our selected compound for chronic cough has demonstrated robust anti-tussive activity in multiple preclinical models of chronic cough compared to reference drugs. Subject to securing funding or development partner, we plan to initiate IND enabling studies for our independent chronic cough program;\n\n●*Continue to pursue collaborative arrangements with pharmaceutical companies.*We are seeking collaborative arrangements with third parties to advance the development and commercialization of our drug candidates.\n\n35\n\n[Table of Contents](#TOC)\n\n**Externally Developed Out-licensed Product Candidate**\n\nGABAB PAM for the treatment of substance use disorders, including alcohol use disorder\n\nOur partner, Indivior, has licensed worldwide rights to our GABAB PAM program and is responsible for all development, manufacture and commercialization of any selected GABAB PAM drug candidates. Under the agreement, we completed a research program funded by Indivior to discover novel drug candidates. As part of this agreement, Indivior selected a drug candidate related to the substance use disorders indication including alcohol use disorder. We believe that substance use disorder is an indication with a significant commercial opportunity. Existing therapies often do not provide effective control of symptoms or have side effects that discourage adherence. Subject to regulatory approval, we believe that GABAB PAM may offer an innovative and differentiated treatment approach from existing therapies and may provide benefit to patients.\n\nScientific advances have revolutionized our understanding of addiction as a chronic, relapsing disease and not a moral failure. Drug addiction is a complex illness which is characterized by intense and, at times, uncontrollable drug craving, along with compulsive drug seeking and use that persist even in the face of devastating consequences. Addiction affects multiple brain circuits, including those involved in reward and motivation, learning and memory, and inhibitory control over behavior. While a person initially chooses to take drugs, over time the effects of prolonged exposure on brain functioning compromise the ability to choose, and seeking and consuming the drug become compulsive, often eluding a person’s self-control or willpower. Because drug abuse and addiction have so many dimensions and disrupt so many aspects of an individual’s life, treatment is not simple. Addiction treatment must help the individual stop using drugs, maintain a drug-free lifestyle, and achieve productive functioning in the family, at work and in society. Patients typically require long-term or repeated episodes of care to achieve the ultimate goal of sustained abstinence and recovery of their lives.\n\nAlcohol Use Disorder, or AUD is a broad term for problems with alcohol, and is generally indicative of compulsive and uncontrolled consumption of alcoholic beverages. It is medically considered a disease, specifically an addictive illness. The World Health Organization estimates that about 140 million people throughout the world suffer from alcohol dependence. Patients with AUD suffer major changes to the brain structure and chemistry. Excessive alcohol consumption damages almost every organ in the body and the cumulative toxic effects can cause both medical (cirrhosis of the liver, pancreatitis, heart disease, peptic ulcers, sexual dysfunction) and psychiatric (epilepsy, dementia, psychosis, anxiety & depression) problems. Treatment of alcoholism is complex with current standard of care typically being prescribed to patients with heavy drinking but largely being unable to prevent them from relapsing. Approximately 5.8 percent or 14.4 million adults in the United States ages 18 and older had AUD in 2018. This includes 9.2 million men and 5.3 million women. In addition, an estimated 401,000 adolescents ages 12-17, in the United States, had AUD in 2018.\n\nIndivior has completed IND enabling studies of their drug candidate for the substance use disorders and we expect them to file a regulatory application to start clinical studies.\n\nInternally Developed Drug Candidates\n\nDipraglurant\n\nDipraglurant is a selective, orally active small molecule drug product which acts as an mGlu5 NAM. We discovered dipraglurant and hold composition of matter and polymorph patents granted in the United States, Europe and Japan. Dipraglurant is selective for mGlu5 and does not have significant activity or binding affinity to other mGlu or other CNS receptors, such as serotonin, GABA or dopamine receptors. There are currently no drugs of this class on the market. On April 30, 2025, we announced entering into an option and collaboration agreement with Sinntaxis AB for an exclusive license to intellectual property covering the use of mGlu5 inhibitors for the treatment of brain injury recovery. The agreement also includes a research collaboration under which the Sinntaxis team will complete evaluation of dipraglurant for the treatment of brain injury recovery. We are conducting further in vivo testing in stroke models, and subject to funding or securing a development partner, we plan to commence a Phase 2a clinical study.\n\n36\n\n[Table of Contents](#TOC)\n\n*Dipraglurant for post-stroke/TBI recovery*\n\nGlobally more than 100 million people have survived an ischemic stroke and this number is increasing by 5.7 million per year. In the United States there are around 800,000 strokes of different severities per year, which can lead to motor paralysis, loss of sensory function, impaired autonomic functions such as bladder/bowel control, impaired cognition leading to deficits in communication, attention and memory, and often accompanied by pain.\n\nThere are currently no drugs to support sensorimotor recovery and current therapies rely on retraining and physiotherapy, with rehabilitation, often only partial, taking 6 months or more. In the meantime, patients may require assistance in routine tasks, personal care and daily living, increasing the burden of care and the risk of the onset of other comorbidities such as depression and social inadequacy.\n\nFollowing stroke, focal lesions lead to neural tissue necrosis in confined areas and the brains modular organization is disrupted causing module segregation, leading to local imbalances in excitation/inhibition. mGlu5 receptors are widely expressed in medial prefrontal, somatosensory and motor cortices of the brain. mGlu5 modulates glutamatergic neurotransmission and is involved in plastic changes in neural circuits, interfering with neuroplasticity – a key mechanism in post-stroke sensorimotor recovery. The mGlu5 receptor is also involved in aberrant synaptogenesis and neural circuit reorganization associated with several neurological disorders, including stroke. By inhibiting mGlu5 receptors with a negative allosteric modulator (NAM), we aim to support cortical reorganization and formation of new functional pathways, restoring functional connectivity changes toward pre-lesion state and excitation/inhibition homeostasis in tandem with physiotherapy.\n\nFunctional recovery by stimulating network connectivity in the brain has been demonstrated with MTEP (an mGlu5 NAM) and resulted in a significant motor recovery of functional control (Figure below)\n\n​\n\n37\n\n[Table of Contents](#TOC)\n\nDipraglurant also significantly restored functional control in a shorter, 3-day experiment (Figure below).\n\n​\n\nWe are conducting further in vivo testing and subject to funding or securing a development partner, plan to commence a Phase 2a study.\n\nThere is a large unmet need in post-stroke/TBI recovery, and we believe this innovative approach presents a significant commercial opportunity.\n\nADX71149 – mGlu2 PAM\n\n*Our drug candidate, ADX71149 is a novel orally active metabotropic glutamate receptor subtype 2 positive allosteric modulator, or mGlu2 PAM. On April 17, 2025, we announced that our partner Janssen terminated our partnership agreement and returned to us the program including all related intellectual property to the Group. We are currently evaluating the future development of ADX71149.*\n\nGABAB PAM\n\nActivation of the GABAB, receptor, a Family C class of GPCR, is clinically and commercially validated. Generic GABAB receptor agonist, baclofen, also known as chlorophenibut, is marketed for spasticity and some spinal cord injuries, and used for overactive bladder, or OAB, but its wider use is limited due to a variety of side effects and short half-life. Researchers have shown that baclofen is effective in reducing drug self-administration, cravings, and anxiety, and thus promotes abstinence.\n\nOur GABAB PAM drug candidates are novel, orally available, small molecules that have demonstrated positive effects and tolerability in several preclinical rodent models of pain, anxiety, addiction, cough and OAB. GABAB PAMs differ from the generic drug baclofen in that they are PAMs rather than orthosteric agonists at the GABAB receptor. The GABAB PAM only acts when the natural ligand (GABA) activates the receptor, and therefore respects the physiological cycle of activation. It has been proposed that PAMs produce fewer adverse effects and lead to less tolerance to effect than direct agonists (May and Christopoulos 2003; Langmead and Christopoulos 2006; Perdona et al. 2011; Urwyler 2011; Gjoni et al., 2008; Ahnaou et al).\n\n38\n\n[Table of Contents](#TOC)\n\nGABAB PAM for the treatment of chronic cough\n\nOur license agreement with Indivior provides for a funded research program, under which we have the right to select drug candidates for exclusive development in certain indications outside of substance use disorders, including chronic cough and pain. Chronic cough is a cough that lasts 8 weeks or more and does not respond to treatment for underlying cause or is unexplained. There are more that 18 million sufferers in the United States and Europe. In addition to the inconvenience of coughing potential complications can include, headaches, fainting, anxiety or depression, sleep loss, urine leakage, vomiting and muscle pain.\n\nCurrent medications, including opioid drugs (codeine, morphine) and gabapentin/pregabalin deliver some relief, but their wider use is limited by side-effects and risk of abuse. Also, they are not recommended for children under 12. Current cough medications show limited or lack of effectiveness in 60% and 30% of patients, respectively. P2X3 inhibitors (gefapixant) have greater scope but still leave up to 25% of patients without any relief; in addition, discontinuation occurs due to gustatory side-effects.\n\nChronic cough is driven by hypersensitivity of the sensory C- and Aδ-fibers of the vagus nerve in combination with hypersensitivity of brain regions regulating cough. GABAB potentiators reduce cough by acting on GABAB receptors:\n\n●In the brain, in the regions regulating cough, including somatosensory cortex, thalamus, amygdala, solitary tract and paratrigeminal nuclei.\n\n●In the periphery, on sensory endings of C-and Aδ-fibers, airway epithelium, lung smooth muscle cells and neutrophils, on cell bodies located in the jugular and nodose ganglia.\n\nThis target is well-validated and supported by clinical and preclinical data. Baclofen (a GABAB agonist) is used off-label in patients with chronic cough. Also, baclofen showed efficacy in several clinical studies and in animal models of cough. However, centrally-mediated side-effects (nausea, sedation, dizziness), poor pharmacokinetic profile (short half-life) and tolerance following repeated administration limit its clinical use.\n\nWe are developing multiple chemical series of GABAB PAMs and have selected a drug candidate for development in refractory chronic cough. Subject to securing funding or a development partner, we expect to initiate IND enabling studies.\n\nMaterial agreements\n\nCollaboration Agreement with Indivior for Development of Novel GABAB PAM Compounds, including for the Treatment of Addiction and Other CNS Diseases\n\nIn January 2018, we entered into an agreement with Indivior for the discovery, development and commercialization of novel GABAB PAM compounds for the treatment of addiction and other CNS diseases. This agreement included the selected clinical candidate, ADX71441. In addition, Indivior agreed to fund a research program at Addex to discover novel GABAB PAM compounds.\n\nIndivior has sole responsibility, including funding liability, for development of selected compounds under the agreement through preclinical and clinical trials, as well as registration procedures and commercialization, if any, worldwide. Indivior has the right to design development programs for selected compounds under the agreement. Through our participation in a joint development committee, we review, in an advisory capacity, any development programs designed by Indivior. However, Indivior has authority over all aspects of the development of such selected compounds.\n\nUnder terms of the agreement, we have granted Indivior an exclusive license to use relevant patents and know-how in relation to the development and commercialization of drug candidates selected by Indivior. Subject to agreed conditions, Addex and Indivior jointly own all intellectual property rights that are jointly developed, and Addex or Indivior individually own all intellectual property rights that Addex or Indivior develop individually. Addex has retained the right to select compounds from the research program for further development in areas outside the interest of Indivior including chronic cough. Under certain conditions, but subject to certain consequences, Indivior may terminate the agreement.\n\n39\n\n[Table of Contents](#TOC)\n\nIn January 2018, under terms of the agreement, we received a non-refundable upfront fee of USD 5.0 million for the right to use the clinical candidate, ADX71441, including all materials and know-how related to this clinical candidate. On February 14, 2019, Indivior terminated the development of their selected compound, ADX71441.\n\nSeparately, Indivior funded research at Addex, based on a research plan to mutually agreed between the parties, to discover novel GABAB PAM compounds. These future novel GABAB PAM compounds, if selected by Indivior, become licensed compounds. We agreed with Indivior to an initial research term and duration of two years with a funding of USD 4.0 million over the period for our R&D costs incurred, that can be extended by twelve-month increments. Following Indivior’s selection of one newly identified compound, Addex has the right to also select one additional newly identified compound. Addex was responsible for the funding of all development and commercialization costs of its selected compounds and Indivior has no rights to the Addex selected compounds. The initial two-year research term ran from May 2018 to April 2020. In 2019, Indivior agreed to additional research funding of USD 1.6 million, and on October 30, 2020 the research term was extended until June 30, 2021 and Indivior agreed to further additional research funding of USD 2.8 million. Effective May 1, 2021, the research term was extended until July 31, 2022 and Indivior agreed additional research funding of CHF 3.7 million, of which CHF 2.7 million has been paid to us and CHF 1.0 million paid directly by Indivior to third party suppliers that are supporting the funded research program. In August 2022, the research agreement was extended until March 31, 2023 with additional research funding of CHF 0.85 million. The reserved indications, where Addex retains exclusive rights to develop its own independent GABAB PAM program, were also expanded to include chronic cough. Effective November 1, 2022 the research term was extended until June 30, 2023 and Indivior agreed to additional research funding of CHF 0.95 million. Effective July 1, 2023, the research term was extended until June 30, 2024 and Indivior agreed to additional research funding of CHF 2.7 million including CHF 1.1 million received directly by us and CHF 1.6 million paid directly by Indivior to third party suppliers that are supporting the funded research program.\n\nOn August 27, 2024, Indivior selected a compound for future development in substance use disorders and now undertake all future development of their selected compound. Under the terms of the agreement, we have also exercised our right to select a compound to advance our own independent GABAB PAM program for the treatment of chronic cough. Under the license agreement, we are as well eligible for payments on successful achievement of pre-specified clinical, regulatory and commercial milestones totaling USD 330 million. In addition, we are eligible for tiered royalties from high single digits to low double digits on net sales of applicable products on a country-by-country-basis. The term of the royalty for each licensed product in any particular country commences on such product’s launch and ends on the latest of ten -year anniversary of launch, expiration of certain applicable patent rights, and expiration of certain applicable marketing or data exclusivity periods.\n\nIndivior may terminate the Agreement in its entirety or with respect to one or more countries or products upon 90 days’ prior written notice prior to receipt of marketing approval for product candidates or twelve months’ prior written notice after the receipt of marketing approval.\n\nAddex may terminate the agreement if Indivior commits a material breach of the agreement and fails to cure such breach within 90 days of Addex’s written notification to Indivior or fails to cure breaches to any payment obligations breach within 30 days, subject to certain conditions.\n\nIntellectual Property\n\nPatents and Proprietary Rights\n\nAt the issuance date of this annual report on Form 20-F, we owned 7 U.S. and 55 foreign patents and a number of pending patent applications that cover several classes of compounds which are potentially useful as modulators of mGlu5, mGlu2 PAM and GABAB. More specifically, our patents and patent applications cover compounds, pharmaceutical compositions, polymorphs and uses of compounds for medical treatment.\n\nOur patent strategy is to file patent applications on innovations and improvements to cover a majority of the major pharmaceutical markets in the world. We typically file priority applications at the United Kingdom Patent Office to establish a priority date for the generic subject matter and examples which are available at the filing date of each invention. Subsequently, we file international applications under the Patent Cooperation Treaty or PCT, with extra examples to support the scope of the claims (International Phase). After the International Phase, we file patent applications in selected countries representing potential major markets for our drug candidates (National/Regional Phase).\n\n40\n\n[Table of Contents](#TOC)\n\nGenerally, patents have a term of twenty years from the filing date, assuming all maintenance fees are paid. In some instances, patent terms can be increased or decreased, depending on the laws and regulations of the country or jurisdiction that issued the patent. Wherever appropriate and legally possible, we aim at obtaining patent protection for novel molecules, composition of matter and uses for drugs and inventions originating from our research and development efforts, as well as new manufacturing and other processes and formulations. In each case, we carefully balance the value of patent protection against the advantage of keeping the know-how regarding the invention confidential. We aim to position the claims of our applications to exploit gaps in prior art.\n\nWe have two patent families covering dipraglurant as a composition of matter and its polymorphs which are useful as mGlu5 NAMs: 42 patents have been granted to us, including 2 in the United States and 40 in other international jurisdictions (Austria, Belgium, Croatia, Denmark, Estonia, Finland, France, Germany, Great Britain, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, Netherlands, Norway, Poland, Portugal, Romania, Spain, Sweden, Switzerland/Liechtenstein, Turkey, Australia, Brazil, Canada, Hong Kong, Indonesia, Israel, Japan, South Korea, Mexico, New Zealand, Russian federation, Singapore, South Africa and Ukraine). We also have 1 patent application pending.\n\nWe have six patent families covering compounds which are useful as GABAB PAMs, of which 2 patents have been granted in the United States and 5 patent applications have reached the PCT stage and will enter the national/regional phase.\n\nWe have 17 patents in one patent family covering compounds which are useful as mGlu2 PAMs, including ADX71149, which is explicitly exemplified and claimed as a compound and as a pharmaceutical composition, we have 3 patents in the United States and 14 in other international jurisdictions (Belgium, France, Germany, Italy, Switzerland/Liechtenstein, United Kingdom, Chile, Israel, Japan, Republic of Korea, Mexico, and New Zealand).\n\nOur portfolio of granted patents have expiry dates ranging from 2027 - 2045 without extension. Patent term extension of up to 5 years is available in some jurisdictions. For example, in the United States following the enactment of Title II of the Drug Price Competition and Patent Term Restoration Act (Public Law 98-417) it is generally possible to extend patent life by a maximum of 5 years.\n\nThe patent positions of pharmaceutical and biotechnology companies are uncertain and involve complex legal and factual issues. There can be no assurance that patents that have been issued will be held valid and enforceable in a court of law. Even for patents that are held valid and enforceable, the legal process associated with obtaining such a judgment is time consuming and costly. Additionally, issued patents can be subject to opposition or other proceedings that can result in the revocation of the patent or maintenance of the patent in amended form, and potentially in a form that renders the patent without commercially relevant or broad coverage. Further, our competitors may be able to circumvent and otherwise design around our patents. Even if a patent is issued and enforceable, because development and commercialization of pharmaceutical products can be subject to substantial delays, patents may expire early and provide only a short period of protection, if any, following the commercialization of a product covered by any of our patents. We may have to participate in interference proceedings declared by the U.S. Patent and Trademark Office, which could result in a loss of the patent or substantial cost to us.\n\nU.S. and foreign patent rights and other proprietary rights exist that are owned by third parties and relate to pharmaceutical compositions and reagents, medical devices and equipment and methods for preparation, packaging and delivery of pharmaceutical compositions. We cannot predict with any certainty which, if any, of these rights will be considered relevant to our technology by authorities in the various jurisdictions where such rights exist, nor can we predict with certainty which, if any, of these rights will or may be asserted against us by third parties. We could incur substantial costs in defending ourselves and our partners against any such claims. Furthermore, parties making such claims may be able to obtain injunctive or other equitable relief, which could effectively block our ability to develop or commercialize some or all of our products in the United States and abroad and could result in the award of substantial damages. In the event of a claim of infringement, we or our partners may be required to obtain one or more licenses from third parties. There can be no assurance that we can obtain a license to any technology that we determine we need on reasonable terms, if at all, or that we could develop or otherwise obtain alternative technology. The failure to obtain licenses if needed may have a material adverse effect on our business, results of operations and financial condition.\n\n41\n\n[Table of Contents](#TOC)\n\nWe also rely on trade secret protection for our confidential and proprietary information. No assurance can be given that we can meaningfully protect our trade secrets. Others may independently develop substantially equivalent confidential and proprietary information or otherwise gain access to, or disclose, our trade secrets. Our success will depend in part on our ability to obtain and maintain patent protection for our drugs, preserve trade secrets, prevent third parties from infringing upon our proprietary rights and operate without infringing upon the proprietary rights of others, both in Switzerland and in other territories worldwide.\n\nIt is our policy to require our employees and consultants, outside scientific collaborators, sponsored researchers and other advisors who receive confidential information from us to execute confidentiality agreements upon the commencement of employment or consulting relationships with us. These agreements provide that all confidential information developed or made known to the individual during the course of the individual’s relationship with us is to be kept confidential and not disclosed to third parties except in specific circumstances. The agreements provide that all inventions conceived by an employee shall be our property. There can be no assurance, however, that these agreements will provide meaningful protection or adequate remedies for our trade secrets in the event of unauthorized use or disclosure of such information.\n\nTrademarks\n\nWe own trademarks for Addex Pharmaceuticals in Switzerland.\n\nCompetition\n\nThe biopharmaceutical industry is highly competitive and characterized by rapid technological innovation, evolving standards of care, intense intellectual property competition and strong competition for regulatory approval, reimbursement and market acceptance. We face competition from multinational pharmaceutical companies, specialty biotechnology companies, academic institutions and governmental and public research organizations. Competitors may develop products that are safer, more effective, more convenient, less expensive or otherwise commercially superior to our product candidates.\n\nMany of our competitors have substantially greater financial, technical, manufacturing, marketing, commercialization and human resources than we do. In addition, many competitors have significantly greater experience in conducting preclinical studies and clinical trials, obtaining regulatory approvals and commercializing pharmaceutical products. Our competitors may also obtain regulatory approval for their products more rapidly than we do or establish stronger market positions.\n\nFor each of our product candidates and target indications, we are aware of approved therapies, off-label treatments and development-stage compounds that may compete with our programs, including the following:\n\n*Dipraglurant for Post-Stroke Sensorimotor Recovery*\n\nCurrently, there are no approved pharmacological therapies specifically indicated to improve post-stroke sensorimotor recovery, and patient rehabilitation primarily relies on physiotherapy and occupational therapy. However, several academic and industry-sponsored clinical studies are evaluating pharmacological approaches intended to enhance neuroplasticity and rehabilitation outcomes.\n\nCompeting or potentially competing approaches include: armodafinil in combination with task-related training; galantamine in combination with cognitive rehabilitation; levodopa/carbidopa (Sinemet®) used in conjunction with physiotherapy or upper limb rehabilitation programs; and other neuromodulatory and neurorehabilitation approaches under academic or commercial development.\n\nIn addition to drug-based approaches, advances in digital therapeutics, robotics-assisted rehabilitation, brain stimulation technologies and neurorehabilitation devices may also compete with our product candidates in this indication.\n\nGABAB PAM for the Treatment of Substance Use Disorders, Including Alcohol Use Disorder\n\nCurrently approved pharmacological treatments for substance use disorders include buprenorphine-based products (Suboxone®, Subutex®, Probuphine® and Sublocade™) and naltrexone (Vivitrol®) for opioid use disorder; bupropion (Zyban®) and varenicline (Chantix®) for nicotine dependence; and naltrexone (Vivitrol®), acamprosate (Campral®) and disulfiram (Antabuse®) for alcohol use disorder.\n\n42\n\n[Table of Contents](#TOC)\n\nBaclofen, a GABAB receptor agonist, has been used off-label in certain jurisdictions for alcohol use disorder and other addiction-related disorders. In addition, several companies and academic groups are developing next-generation GABAB modulators and related compounds intended to improve efficacy and tolerability compared to baclofen.\n\nWe are also aware of development-stage compounds targeting GABAB signaling pathways, including Astellas Pharma’s ASP8062, a GABAB positive allosteric modulator (PAM), which has been evaluated in early-stage clinical studies for substance-related disorders and other central nervous system indications.\n\nIn addition, we may face competition from other therapeutic approaches being developed for substance use disorders, including therapies targeting opioid, dopamine, glutamate, cannabinoid and neuroimmune signaling pathways, as well as digital therapeutics and behavioral intervention platforms.\n\n*GABAB PAM for the Treatment of Chronic Cough*\n\nCurrent pharmacological treatments for chronic cough include opioid-based antitussives such as codeine and morphine; neuromodulators including gabapentin (Neurontin®, Horizant®) and pregabalin (Lyrica®); and over-the-counter or prescription cough suppressants containing dextromethorphan or guaifenesin. Many of these therapies are associated with significant limitations, including sedation, dizziness, gastrointestinal side effects, abuse potential, limited efficacy and tolerability concerns.\n\nBaclofen, a GABAB receptor agonist, has also been used off-label for gastroesophageal reflux disease (GERD)-associated chronic cough, angiotensin-converting enzyme inhibitor-induced cough and refractory chronic cough.\n\nMore recently, novel mechanisms of action have emerged in the treatment of refractory or unexplained chronic cough, including purinergic P2X3 receptor antagonists and neurokinin receptor antagonists. Gefapixant, a P2X3 receptor antagonist marketed as Lyfnua®, has been approved in certain jurisdictions, including Japan and Europe, for the treatment of refractory or unexplained chronic cough in adults. However, reported limitations of gefapixant include taste-related adverse events and incomplete response in a subset of patients.\n\nAdditional P2X3 receptor antagonists and other chronic cough therapies are currently in clinical development by multiple pharmaceutical and biotechnology companies. We may also face competition from future therapies that demonstrate improved efficacy, safety, tolerability or convenience compared to our product candidates.\n\nOur ability to compete successfully will depend on a number of factors, including the efficacy, safety, tolerability, convenience, cost and reimbursement profile of our product candidates, the timing and scope of regulatory approvals, our intellectual property position, manufacturing capabilities, commercialization strategy and our ability to establish and maintain strategic collaborations.\n\nUnited States Government Regulation and Product Approval\n\nGovernment authorities in the United States, at the federal, state and local levels, and in other countries, extensively regulate, among other things, the research, development, testing, manufacture, packaging, storage, recordkeeping, labeling, advertising, promotion, distribution, marketing, import and export of pharmaceutical products, such as those we are developing. The processes for obtaining regulatory approvals in the United States and in foreign countries, along with subsequent compliance with applicable statutes and regulations, require the expenditure of substantial time and financial resources.\n\nIn the United States, the FDA regulates drugs under the Federal Food, Drug, and Cosmetic Act, (FDCA), and its implementing regulations. The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations requires the expenditure of substantial time and financial resources. Failure to comply with the applicable United States requirements at any time during the drug development process, approval process or after approval, may subject an applicant to a variety of administrative or judicial sanctions, such as the FDA’s refusal to approve pending new drug applications, or NDAs, withdrawal of an approval, imposition of a clinical hold, issuance of warning or untitled 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.\n\n43\n\n[Table of Contents](#TOC)\n\nThe process required by the FDA before a drug may be marketed in the United States generally involves:\n\n●completion of pre-clinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s good laboratory practice, or GLP, regulations, including laboratory evaluation of product chemistry, toxicity and formulation, as well as animal studies to assess potential safety and efficacy;\n\n●submission to the FDA of an Investigational New Drug application, or IND, which must become effective before human clinical trials may begin;\n\n●approval by an independent institutional review board, or IRB, at each clinical site before each clinical trial may be initiated;\n\n●performance of adequate and well-controlled clinical trials in accordance with good clinical practice, or GCP, requirements to establish the safety and efficacy of the proposed drug for each indication;\n\n●submission to the FDA of an NDA;\n\n●a determination by the FDA within 60 days of its receipt of the NDA to accept the filing for review;\n\n●satisfactory completion of an FDA advisory committee review, if applicable;\n\n●satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product is produced to assess compliance with cGMP requirements, and to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity; satisfactory completion of an FDA inspection of selected clinical sites to assure compliance with GCPs and the integrity of the clinical data; payment of user fees; and\n\n●FDA review and approval of the NDA.\n\nClinical Trials\n\nPrior to the initiation of clinical testing, a sponsor must submit to the FDA an IND, application to the FDA, including the results of pre-clinical studies, manufacturing information, analytical data and any available clinical data or literature. Some pre-clinical testing may continue even after the IND is submitted. An IND automatically becomes effective 30 days after receipt by the FDA, unless before that time the FDA raises concerns or questions related to one or more proposed clinical trials and places the clinical trial on a clinical hold. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. As a result, submission of an IND may not result in the FDA allowing clinical trials to commence.\n\nClinical trials involve the administration of the investigational new drug to human subjects under the supervision of qualified investigators in accordance with GCP requirements, which include the requirement that all research subjects provide their informed consent in writing for their participation in any clinical trial. Clinical trials are conducted under protocols detailing, among other things, the objectives of the trial, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated. A protocol for each clinical trial and any subsequent protocol amendments must be submitted to the FDA as part of the IND. In addition, an IRB at each institution participating in the clinical trial must review and approve the plan for any clinical trial before it commences at that institution, and the IRB must continue to oversee the clinical trial while it is being conducted. Information about certain clinical trials must be submitted within specific timeframes to the National Institutes of Health, or NIH, for public dissemination on their ClinicalTrials.gov website.\n\nHuman clinical trials are typically conducted in three sequential phases, which may overlap or be combined. In Phase 1, the drug is initially introduced into healthy human subjects or patients with the target disease or condition and tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an initial indication of its effectiveness. In Phase 2, the drug typically is administered to 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. In Phase 3, the drug is administered to an expanded patient population, generally at geographically dispersed clinical trial sites, in well-controlled clinical trials to generate enough data to statistically evaluate the safety and efficacy of the product for approval, to establish the overall risk-benefit profile of the product and to provide adequate information for the labeling of the product.\n\n44\n\n[Table of Contents](#TOC)\n\nProgress reports detailing the results of the clinical trials must be submitted, at least annually, to the FDA, and more frequently if certain serious adverse events occur. Phase 1, Phase 2 and Phase 3 clinical trials may not be completed successfully within any specified period, or at all. Furthermore, the FDA or the sponsor may suspend or terminate a clinical trial at any time on various grounds, including a finding that the research subjects 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.\n\nMarketing Approval\n\nAssuming successful completion of the required clinical testing, the results of the pre-clinical and clinical studies, together with detailed information relating to the product’s chemistry, manufacture, controls and proposed labeling, among other things, are submitted to the FDA as part of an NDA requesting approval to market the product for one or more indications. In most cases, the submission of an NDA is subject to a substantial application user fee. Under the Prescription Drug User Fee Act, or PDUFA, guidelines that are currently in effect, the FDA has a goal of ten months from the date of “filing” of a standard NDA for a new molecular entity to review and act on the submission. This review typically takes twelve months from the date the NDA is submitted to the FDA because the FDA has sixty days from submission to make a “filing” decision.\n\nIn addition, under the Pediatric Research Equity Act, certain NDAs or supplements to an NDA must contain data that are 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 product is safe and effective. The FDA may, on its own initiative or at the request of the applicant, grant deferrals for submission of some or all pediatric data until after approval of the product for use in adults, or full or partial waivers from the pediatric data requirements. Unless otherwise required by regulation, the pediatric data requirements do not apply to products with orphan designation.\n\nThe FDA also may require submission of a risk evaluation and mitigation strategy, or REMS, plan to ensure that the benefits of the drug outweigh its risks. The REMS plan could include medication guides, physician communication plans, assessment plans, and / or elements to assure safe use, such as restricted distribution methods, patient registries or other risk minimization tools.\n\nThe FDA conducts a preliminary review of all NDAs within the first 60 days after submission, before accepting them for filing, to determine whether they are sufficiently complete to permit substantive review. The FDA may request additional information rather than accept an NDA for filing. In this event, the application must be resubmitted with the additional information. The resubmitted application is also 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 the drug is safe and effective and whether the facility in which it is manufactured, processed, packaged or held meets standards designed to assure the product’s continued safety, quality and purity.\n\nThe FDA may refer an application for a novel drug to an advisory committee. An advisory committee is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides a recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.\n\nBefore approving an NDA, the FDA typically will inspect the facility or facilities where the product is 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. Additionally, before approving an NDA, the FDA will typically inspect one or more clinical trial sites to assure compliance with GCP requirements.\n\nThe testing and approval process for an NDA requires substantial time, effort and financial resources, and takes several years to complete. Data obtained from pre-clinical and clinical testing are not always conclusive and may be susceptible to varying interpretations, which could delay, limit or prevent regulatory approval. The FDA may not grant approval of an NDA on a timely basis, or at all.\n\n45\n\n[Table of Contents](#TOC)\n\nAfter evaluating the NDA and all related information, including the advisory committee recommendation, if any, and inspection reports regarding the manufacturing facilities and clinical trial sites, the FDA may issue an approval letter, or, in some cases, a complete response letter. A complete response letter generally contains a statement of specific conditions that must be met in order to secure final approval of the NDA and may require additional clinical or pre-clinical testing in order for FDA to reconsider the application. Even with submission of this additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval. If and when those conditions have been met to the FDA’s satisfaction, the FDA will typically issue an approval letter. An approval letter authorizes commercial marketing of the drug with specific prescribing information for specific indications.\n\nEven if the FDA approves a product, it may limit the approved indications for use of the product, require that contraindications, warnings or precautions be included in the product labeling, require that post-approval studies, including Phase 4 clinical trials, be conducted to further assess a drug’s safety after approval, require testing and surveillance programs to monitor the product after commercialization, or impose other conditions, including distribution and use restrictions or other risk management mechanisms under a REMS, which can materially affect the potential market and profitability of the product. The FDA may prevent or limit further marketing of a product based on the results of post-marketing studies or surveillance programs. After approval, some types of changes to the approved product, such as adding new indications, manufacturing changes, and additional labeling claims, are subject to further testing requirements and FDA review and approval.\n\nOrange Book Listing\n\nIn seeking approval for a drug through an NDA, applicants are required to list with the FDA certain patents whose claims cover the applicant’s product. Upon approval of an NDA, each of the patents listed in the application for the drug is then published in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations, known as the Orange Book. Any applicant who files an Abbreviated New Drug Application, or ANDA, seeking approval of a generic equivalent version of a drug listed in the Orange Book referencing a drug listed in the Orange Book must certify, for each patent listed in the Orange Book for the referenced drug, to the FDA that (1) no patent information on the drug product that is the subject of the application has been submitted to the FDA, (2) such patent has expired, (3) the date on which such patent expires or (4) such patent is invalid or will not be infringed upon by the manufacture, use or sale of the drug product for which the application is submitted. The fourth certification described above is known as a paragraph IV certification. A notice of the paragraph IV certification must be provided to each owner of the patent that is the subject of the certification and to the holder of the approved NDA to which the ANDA. The applicant may also elect to submit a “section viii” statement certifying that its proposed label does not contain (or carves out) any language regarding the patented method-of-use rather than certify to a listed method-of-use patent. This section viii statement does not require notice to the patent holder or NDA owner. There might also be no relevant patent certification.\n\nIf the reference NDA holder and patent owners assert a patent challenge directed to one of the Orange Book listed patents within 45 days of the receipt of the paragraph IV certification notice, the FDA is prohibited from approving the application until the earlier of 30 months from the receipt of the paragraph IV certification expiration of the patent, settlement of the lawsuit, or a decision in the infringement case that is favorable to the applicant. Even if the 45 days expire, a patent infringement lawsuit can be brought and could delay market entry, but it would not extend the FDA-related 30-month stay of approval.\n\nPost-Approval Requirements\n\nDrugs manufactured or distributed pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to recordkeeping, periodic reporting, product sampling and distribution, advertising and promotion and reporting of adverse experiences with the product. After approval, most changes to the approved product, such as adding new indications, manufacturing changes or other labeling claims, are subject to further testing requirements and prior FDA review and approval. There also are continuing annual user fee requirements for any marketed products and the establishments at which such products are manufactured, as well as application fees for supplemental applications with clinical data.\n\n46\n\n[Table of Contents](#TOC)\n\nEven if the FDA approves a product, it may limit the approved indications for use of the product, require that contraindications, warnings or precautions be included in the product labeling, including a boxed warning, require that post-approval studies, including Phase 4 clinical trials, be conducted to further assess a drug’s safety after approval, require testing and surveillance programs to monitor the product after commercialization, or impose other conditions, including distribution restrictions or other risk management mechanisms under a REMS, which can materially affect the potential market and profitability of the product. The FDA may prevent or limit further marketing of a product based on the results of post-marketing studies or surveillance programs.\n\nIn addition, drug manufacturers and other entities involved in the manufacture and distribution of approved drugs are required to register their establishments with the FDA and state agencies, and are subject to periodic unannounced inspections by the FDA and these state agencies for compliance with cGMP requirements. Changes to the manufacturing process are strictly regulated and often require prior FDA approval before being implemented. FDA regulations also require investigation and correction of any deviations from cGMP and impose reporting and documentation requirements upon the sponsor and any third party manufacturers that the sponsor may decide to use. Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain cGMP compliance.\n\nOnce an approval is granted, the FDA may withdraw the approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market. Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in mandatory revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical trials to assess new safety risks; or imposition of distribution or other restrictions under a REMS program. Other potential consequences include, among other things:\n\n●restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls;\n\n●fines, warning letters or holds on post-approval clinical trials;\n\n●refusal of the FDA to approve pending NDAs or supplements to approved NDAs, or suspension or revocation of product approvals;\n\n●product seizure or detention, or refusal to permit the import or export of products; or\n\n●injunctions or the imposition of civil or criminal penalties.\n\nThe FDA strictly regulates marketing, labeling, advertising and promotion of products that are placed on the market. Drugs may be promoted only for the approved indications and in accordance with the provisions of the approved label, although physicians, in the practice of medicine, may prescribe approved drugs for unapproved indications. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to liability.\n\nIn addition, the distribution of prescription pharmaceutical products is subject to the Prescription Drug Marketing Act, or PDMA, which regulates the distribution of drugs and drug samples at the federal level, and sets minimum standards for the registration and regulation of drug distributors by the states. Similarly, the Drug Supply Chain Security Act, or DSCSA, was enacted in 2013 with the aim of building an electronic system to identify and trace certain prescription drugs and biologics distributed in the United States. These laws and state laws limit the distribution of prescription pharmaceutical product samples and impose requirements to ensure accountability in distribution.\n\n47\n\n[Table of Contents](#TOC)\n\nUnited States Federal and State Fraud and Abuse, Data Privacy and Security, and Transparency Laws and Regulations\n\nIn addition to FDA restrictions on marketing of pharmaceutical products, federal and state healthcare laws and regulations restrict business practices in the biopharmaceutical industry. These laws may impact, among other things, our current and future business operations, including our clinical research activities, and proposed sales, marketing and education programs and constrain the business or financial arrangements and relationships with healthcare providers and other parties through which we market, sell and distribute our products for which we obtain marketing approval. These laws include anti-kickback and false claims laws and regulations, data privacy and security, and transparency laws and regulations, including, without limitation, those laws described below.\n\nThe federal Anti-Kickback Statute prohibits, among other things, individuals or entities from knowingly and willfully offering, paying, soliciting or receiving remuneration, directly or indirectly, overtly or covertly, in cash or in kind to induce or in return for purchasing, leasing, ordering or arranging for or recommending the purchase, lease or order of any item or service reimbursable under Medicare, Medicaid or other federal healthcare programs. The term “remuneration” has been broadly interpreted to include anything of value. The federal Anti-Kickback Statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on one hand and prescribers, purchasers and formulary managers on the other hand. Although there are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution, the exceptions and safe harbors are drawn narrowly. Practices that involve remuneration that may be alleged to be intended to induce prescribing, purchases or recommendations may be subject to scrutiny if they do not qualify for an exception or safe harbor.\n\nThe reach of the federal Anti-Kickback Statute was also broadened by the Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act of 2010, or collectively the ACA, which, among other things, amended the intent requirement of the federal Anti-Kickback Statute such that a person or entity no longer needs to have actual knowledge of this statute or specific intent to violate it in order to have committed a violation. In addition, the ACA provides that the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act and the civil monetary penalties statute.\n\nThe federal civil and criminal false claims laws, including the False Claims Act, which prohibit, among other things, any individual or entity from knowingly presenting, or causing to be presented, a false claim for payment to the federal government or knowingly making, using or causing to be made or used a false record or statement material to a false or fraudulent claim to the federal government. A claim includes “any request or demand” for money or property presented to the U.S. government. Numerous pharmaceutical and other healthcare companies have been prosecuted under these laws for, among other things, allegedly providing free product to customers with the expectation that the customers would bill federal programs for the product and for causing false claims to be submitted because of the companies’ marketing of products for unapproved, and thus non-reimbursable, uses.\n\nThe federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, created additional federal criminal statutes that prohibit, among other things, knowingly and willfully executing a scheme to defraud any healthcare benefit program, including private third party payors and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement 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 does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.\n\nHIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, and their respective implementing regulations, impose certain requirements relating to the privacy, security and transmission of individually identifiable health information without appropriate authorization on certain health plans, healthcare clearinghouses and certain healthcare providers, known as covered entities, and their respective business associates, independent contractors that perform certain services involving the use or disclosure of individually identifiable health information as well as their covered subcontractors. HITECH also created new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce HIPAA and seek attorneys’ fees and costs associated with pursuing federal civil actions.\n\n48\n\n[Table of Contents](#TOC)\n\nThe federal Physician Payments Sunshine Act requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to report annually to the Centers for Medicare & Medicaid Services, or CMS, information related to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other healthcare professionals (such as physician assistants and nurse practitioners), and teaching hospitals, and applicable manufacturers and applicable group purchasing organizations to report annually to CMS ownership and investment interests held by physicians and their immediate family members.\n\nWe may also be subject to state and foreign law equivalents of each of the above federal laws; state laws that require manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, or that otherwise restrict payments that may be made to healthcare providers; state and local laws that require the registration of pharmaceutical sales representatives; as well as state and foreign laws that govern the privacy and security of health information in some circumstances, many of which differ from each other in substantial ways and often are not preempted by HIPAA, thus complicating compliance efforts.\n\nEfforts to ensure that our business arrangements with third parties will comply with applicable healthcare laws and regulations will involve substantial costs. Because of the breadth of these laws and the narrowness of the statutory exceptions and regulatory safe harbors available, it is possible that some of our business activities could be subject to challenge under one or more of such laws. 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 substantial civil, criminal and administrative penalties, damages, fines, disgorgement, imprisonment, exclusion from participating in government funded healthcare programs, such as Medicare and Medicaid, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, contractual damages, reputational harm and the curtailment or restructuring of our operations. To the extent that any of our products are sold in a foreign country, we may be subject to similar foreign laws and regulations, which may include, for instance, applicable post-marketing requirements, including safety surveillance, anti-fraud and abuse laws and implementation of corporate compliance programs and reporting of payments or transfers of value to healthcare professionals.\n\nCoverage and Reimbursement\n\nMarket acceptance and sales of any drug products depend in part on the extent to which reimbursement for drug products will be available from third party payors, including government health administration authorities, managed care organizations and other private health insurers. third party payors decide which drug products they will pay for and establish reimbursement levels. third party payors often rely upon Medicare coverage policy and payment limitations in setting their own coverage and reimbursement policies. However, decisions regarding the extent of coverage and amount of reimbursement to be provided for drug products are made on a payor-by-payor basis. One payor’s determination to provide coverage for a drug product does not assure that other payors will also provide coverage, and adequate reimbursement, for the drug product. Additionally, a third party payor’s decision to provide coverage for a drug product does not imply that an adequate reimbursement rate will be approved. Each payor determines whether or not it will provide coverage for a drug product, what amount it will pay the manufacturer for the therapy, and on what tier of its formulary it will be placed. The position on a payor’s list of covered drugs, or formulary, generally determines the co-payment that a patient will need to make to obtain the drug product and can strongly influence the adoption of such drug product by patients and physicians. Patients who are prescribed drug products for their conditions and providers prescribing such drug products generally rely on third party payors to reimburse all or part of the associated costs. Patients are unlikely to use a drug product unless coverage is provided and reimbursement is adequate to cover a substantial portion of the cost of the drug product.\n\nReimbursement by a third-party payor may depend upon a number of factors, including the third-party payor’s determination that a drug product is neither experimental nor investigational, safe, effective, and medically necessary, appropriate for the specific patient, cost-effective, supported by peer-reviewed medical journals and included in clinical practice guidelines.\n\n49\n\n[Table of Contents](#TOC)\n\nThird party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular drug products. Even if reimbursement is available, the level of reimbursement is unpredictable. Inadequate coverage and reimbursement can impact the demand for, or the price of, drug products. If coverage and adequate reimbursement are not available, or are available only to limited levels, drug products may not be successfully commercialized. Further, adequate third-party payor reimbursement may not be available to enable price levels sufficient to realize appropriate returns on investment in drug product development.\n\nIn addition, the federal government and state legislatures have continued to implement cost containment programs, including price controls and restrictions on coverage and reimbursement. To contain costs, governmental healthcare programs and third-party payors are increasingly challenging the price, scrutinizing the medical necessity and reviewing the cost-effectiveness of drug products.\n\nImpact of Healthcare Reform on our Business\n\nIn 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 prevent or delay marketing approval of drug product candidates, restrict or regulate post-approval activities, and affect the profitable sale of drug candidates.\n\nAmong policy makers and payors in the United States and elsewhere, there is substantial interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and / or expanding access. In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been affected by major legislative initiatives. In March 2010, the ACA was passed, which substantially changed the way healthcare is financed by both the government and private insurers, and continues to greatly impact the U.S. pharmaceutical industry. The ACA, among other things: (i) increased the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program and extends the rebate program to individuals enrolled in Medicaid managed care organizations; (ii) established an annual, nondeductible fee on any entity that manufactures or imports certain specified branded prescription drugs and biologic agents apportioned among these entities according to their market share in some government healthcare programs; (iii) expanded the availability of lower pricing under the 340B drug pricing program by adding new entities to the program; (iv) increased the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program, to 23.1% and 13% of the average manufacturer price for most branded and generic drugs, respectively and capped the total rebate amount for innovator drugs at 100% of the Average Manufacturer Price, or AMP; (v) expanded the eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional individuals and by adding new mandatory eligibility categories for individuals with income at or below 133% of the federal poverty level, thereby potentially increasing manufacturers’ Medicaid rebate liability; (vi) established a Medicare Part D coverage gap discount program that required manufacturers to offer 50% (later increased to 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, a provision later replaced by the Medicare Part D Manufacturer Discount Program under the Inflation Reduction Act of 2022; (vii) created a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research; and (viii) established a Center for Medicare Innovation at CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug.\n\nThere have been executive, judicial and Congressional challenges to certain aspects of the ACA. For example, on August 16, 2022, the Inflation Reduction Act of 2022, or IRA, was signed into law, which among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in ACA marketplaces through plan year 2025.\n\nThe IRA also eliminates the “donut hole” under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and creating a new manufacturer discount program. It is possible that the ACA will be subject to judicial or Congressional challenges in the future. It is unclear how such challenges, and the healthcare reform measures of the second Trump administration will impact the ACA and our business.\n\n50\n\n[Table of Contents](#TOC)\n\nOther legislative changes have been proposed and adopted since the ACA was enacted. These changes include aggregate reductions to Medicare payments to providers of 2% per fiscal year pursuant to the Budget Control Act of 2011, which subsequent legislative amendments to the statute will remain in effect through fiscal year 2032 unless additional Congressional action is taken. Additionally, on March 11, 2021, the American Rescue Plan Act of 2021 was signed into law, which 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 on January 1, 2024, with the result that manufacturers may now owe total Medicaid rebates in excess of a drug’s average manufacturer price.\n\nAdditionally, there has been heightened governmental scrutiny in the United States of pharmaceutical pricing practices in light of the rising cost of prescription drugs and biologics. Such scrutiny has resulted in several recent congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for products.\n\nAt the federal level, the IRA, among other things, (i) directs the U.S. Department of Health and Human Services, or HHS, to negotiate the price of certain high-expenditure, single-source drugs that have been on the market for at least 7 years (in the case of small molecules) or 11 years (in the case of biological products) covered under Medicare, and subjects drug manufacturers to civil monetary penalties and a potential excise tax by offering a price that is not equal to or less than the negotiated “maximum fair price” or MFP for such drugs and biologics under the law, or the Medicare Drug Price Negotiation Program, and (ii) imposes rebates with respect to certain drugs and biologics covered under Medicare Part B or Medicare Part D to penalize price increases that outpace inflation. The IRA permits HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years. These provisions took effect progressively starting in fiscal year 2023 and the MFPs for the first ten drugs selected for negotiation took effect on January 1, 2026. On August 15, 2024, HHS announced the agreed-upon prices of the first ten drugs that were subject to price negotiations, although the Medicare Drug Price Negotiation program is currently subject to legal challenges. On January 17, 2025, HHS selected fifteen additional products covered under Part D for price negotiation in 2025. Each year thereafter more Part B and Part D products will become subject to the Medicare Drug Price Negotiation Program. Since taking office in January 2025, the Trump administration has pursued policies to reduce regulations and expenditures across government including at HHS, the FDA, CMS and related agencies, including through significant workforce reductions, organizational restructuring, and rescission of predecessor-administration initiatives. These actions directed by executive orders or memoranda from the Office of Management and Budget, have introduced and may continue to introduce policy changes that create additional uncertainty for our business. These actions have included, among others, directives to reduce agency workforce, rescinding a Biden administration executive order tasking the Center for Medicare and Medicaid Innovation to consider new payment and healthcare models to limit drug spending, eliminating the Biden administration’s executive order that directed HHS to establishing an AI task force and developing a strategic plan, and directing certain federal agencies to enforce existing law regarding hospital and price plan transparency and by standardizing prices across hospitals and health plans.\n\nIn addition, on May 12, 2025, the President issued Executive Order 14297, directing HHS and other federal agencies to take action to ensure that Americans pay no more for prescription drugs than patients in comparable developed countries (commonly referred to as “most favored nation” or “MFN” pricing). The administration has also announced a direct-to-consumer drug sales platform referred to as “TrumpRx,” and has entered into voluntary arrangements with a number of pharmaceutical manufacturers incorporating MFN or MFN-adjacent pricing commitments. The scope, legal durability, and economic impact of any MFN program remain uncertain, and MFN-based initiatives are likely to continue to be the subject of litigation.\n\nAdditionally, in its June 2024 decision in Loper Bright Enterprises v. Raimondo, the U.S. Supreme Court overturned the longstanding Chevron doctrine, under which courts were required to give deference to regulatory agencies’ reasonable interpretations of ambiguous federal statutes. The Loper Bright decision could result in additional legal challenges to current regulations and guidance issued by federal agencies applicable to our operations, including those issued by the FDA. Congress may introduce and ultimately pass health care related legislation that could impact the drug approval process and make changes to the Medicare Drug Price Negotiation Program created under the IRA.\n\n51\n\n[Table of Contents](#TOC)\n\nAt the state level, legislatures are increasingly 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 cases, designed to encourage importation from other countries and bulk purchasing. For example, on January 5, 2024, the FDA approved Florida’s Section 804 Importation Program (SIP) proposal to import certain drugs from Canada for specific state healthcare programs. It is unclear how this program will be implemented, including which drugs will be chosen, and whether it will be subject to legal challenges in the United States or Canada. Other states have also submitted SIP proposals that are pending review by the FDA. Any such approved importation plans, when implemented, may result in lower drug prices for products covered by those programs.\n\nManufacturing and Supply\n\nWe rely on third party manufacturing and supply partners for our supply for, preclinical studies and clinical trials. We currently do not have in-house facilities to manufacture our research and development, preclinical and clinical drug supplies.\n\nLegal Proceedings\n\nFrom time to time, we may become involved in litigation or other legal proceedings relating to claims arising from the ordinary course of business. There are currently no claims or actions pending against us that, in the opinion of our management, are likely to have a material adverse effect on our results of operations, financial condition or cash flows.\n\nC. Organizational Structure\n\nThe following diagram illustrates our corporate structure related to the description of our significant subsidiaries and material minority investments at the issuance date of this Annual Report:\n\nD. Property, Plants and Equipment.\n\nOur registered office is located in 12, Chemin des Aulx, Plan-les-Ouates, Geneva, Switzerland. Under the service agreement, we used at zero cost the administrative offices of Neurosterix Group located in Campus Biotech, Chemin des Mines 9, Geneva, Switzerland until February 28, 2026. Since that date, we assumed responsibility for the rent of our administrative offices in Campus Biotech following Neurosterix relocation.\n\n52\n\n[Table of Contents](#TOC)"}