{"url_path":"/sec/casif/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/1962738/0001104659-26-061632-index.html","accession_number":"0001104659-26-061632","cik":"0001962738","ticker":"CASIF","issuer_name":"CASI Pharmaceuticals, Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1962738/0001104659-26-061632-index.html","primary_entity_key":"0001962738","primary_entity_name":"CASI Pharmaceuticals, Inc."},"word_count":17928,"has_tables":true,"body_markdown":"**ITEM 4. INFORMATION ON THE COMPANY**\n\n**A.**\n\n**History and Development of the Company**\n\nCASI Pharmaceuticals, Inc. is a biopharmaceutical company focused on developing and commercializing innovative therapeutics and pharmaceutical products in China, the United States, and throughout the world.\n\nWe were incorporated in 1991, and in 2012, with new leadership, we shifted our business strategy to China and has since built an infrastructure in China that includes sales and marketing, medical affairs, regulatory and clinical development and in the foreseeable future, manufacturing. We are focused on acquiring, developing and commercializing products that augment our hematology oncology, autoimmune and organ transplant rejection therapeutic area focus as well as other unmet medical need. We are executing our plan to become a biopharmaceutical leader by launching medicines in the greater China market, leveraging our China-based regulatory, clinical and commercial competencies and our global drug development expertise. The majority of our operations and activities are now located in China and are conducted primarily through two of our subsidiaries, CASI China and CASI Wuxi. In China, we have staff currently consists of 205 full-time employees which includes our commercial team of 128 hematology and oncology sales and marketing specialists based in China. We expect our operations in China to continue to grow.\n\nIn August 2012, we established CASI China, which is headquartered in Beijing with an office in Shanghai established in 2020. Among its activities, CASI China’s operations oversee the Company’s sales and marketing of EVOMELA® and FOLOTYN®, and the anticipated commercial activities of our pipeline products, technology transfer, local pre-clinical and clinical operation activities, as well as our NMPA regulatory activities. In addition, CASI China’s operations include business development activities and executive management activities, and our global management decisions are primarily being made out of CASI China where our executive team spends a significant amount of time.\n\nIn December 2018, together with Wuxi LP, we established CASI Wuxi. CASI Wuxi is part of the long-term strategy to support the Company’s future clinical and commercial manufacturing needs, to manage its supply chain for certain products, and to develop a GMP manufacturing facility in China. In November 2019, CASI Wuxi entered into a lease agreement for the right to use state-owned land in China for the construction of a manufacturing facility. Construction of the manufacturing facility began in the fourth quarter of 2020. Since our business focus has been shifted from ANDAs to the hematology-oncology therapeutic area, a substantial  investment in GMP manufacturing facilities does not fit the current business focus. Therefore, in December 2022, we returned the land use right to\n\n38\n\n[Table of Contents](#TOC)\n\nthe Wuxi local government for an amount of RMB 44.42 million, equivalent to the payment for land use right. Meanwhile, all construction in progress on the land was disposed and the Company recorded a disposal loss for the cost of the initial infrastructure development which amounted to RMB 15.8 million. Since we failed to meet the land development milestone, the local land administration authority requested CASI Wuxi to pay a land vacancy fee equivalent to 20% of the price for the land use rights according to the PRC Land Administration Law. We paid such a fee in the amount of RMB 8.88 million to the local land administration authority in December 2022. Additionally, the Company received a government grant for the land development in April 2020 and November 2021 respectively, in the total amount of RMB 18.9 million. We are currently in negotiation with the local Wuxi government on the further treatment of the grant. The Wuxi government may require the Company to fully or partially return the grant and the Company may incur further losses.\n\nIn May 2022, we completed a 10-to-1 reverse stock split. In March 2023, we completed a redomicile merger, pursuant to which CASI Delaware merged with and into CASI Cayman, with CASI Cayman surviving the merger as the surviving company and successor issuer, and CASI Cayman’s ordinary shares continued trading on the Nasdaq Capital Market under the symbol “CASI.” As described in “Item 10.E. Taxation—United States Federal Income Tax Considerations,” CASI Cayman is treated for U.S. federal income tax purposes as a U.S. corporation, including with respect to any dividends paid by it, which dividends may be subject to U.S. withholding taxes.\n\nIn November 2023, CASI Wuxi obtained the Drug Manufacturing Permit from local NMPA. In December 2023, the Company entered into a series of agreements, including a capital reduction agreement, a long term borrowing agreement, and four guarantee agreements, with Wuxi LP, CASI China and CASI Wuxi, pursuant to which, (i) CASI Wuxi will reduce its registered capital and return to Wuxi LP the investment principal made by Wuxi LP in CASI Wuxi in the amount of RMB134.2 million (equivalent to its original investment of US$20 million, the “Investment Principal”), together with certain investment return in the amount of RMB26.2 million to be paid in instalments, and Wuxi LP shall cease to be a shareholder of CASI Wuxi, (ii) Wuxi LP shall reinvest the Investment Principal into a three-year long term borrowing to CASI Wuxi (the “Long term borrowing”), which shall have a non-compounding annual interest rate of 4.05% and can, from the beginning date of the Long term borrowing term till the six month anniversary after the maturity of the Long term borrowing, be partially or fully converted into the equity interest of any subsidiaries of the Company at the conversion date fair value, solely at Wuxi LP’s discretion, and (iii) each of the Company and CASI China will provide irrevocable joint and several liability guarantees on the above-mentioned payment obligations. The term of the Long term borrowing will start on December 25, 2023 and end on December 31, 2026.\n\nOn June 26, 2024, we entered into Subscription Agreements and Subscription and Purchase Agreements with certain investors including Dr. Wei-Wu He and his family trust. On July 15, 2024, the transaction contemplated under such agreements closed, pursuant to which we issued 1,020,000 ordinary shares at a price of US$5.00 per ordinary share and pre-funded warrants to purchase 1,980,000 ordinary shares to two investors at an issuance price of US$4.9999 (with an exercise price of US$0.0001).\n\nOn May 3, 2024, we filed a registration statement on Form F-3, or the Prior Registration Statement, with SEC, related to the offer and sale of up to an aggregate of $50.0 million of our ordinary shares, preferred shares, warrants, subscription rights, and/or units, from time to time in one or more offerings, pursuant to a combined base prospectus. The Prior Registration Statement was subsequently declared effective on May 10, 2024. On December 20, 2024, we filed a registration statement on Form F-3, which combined the Prior Registration Statement, all of which remain unissued, with the additional securities registered thereby for offer and sale by us, to enable the offer and sale of up to an aggregate of $200.0 million of our ordinary shares, preferred shares, warrants, subscription rights, and/or units, from time to time in one or more offerings, pursuant to a combined base prospectus. On January 16, 2025, we submitted the required filing with the CSRC for this offering. Additionally, this registration statement contains a Sales Agreement prospectus covering the offering, issuance and sale by us of up to $50.0 million of our ordinary shares that may be issued and sold from time to time under an Open Market Sale Agreement we have entered into with Jefferies LLC, as sales agent, or the Sales Agreement. To date, we have sold 4,053,836 ordinary shares pursuant to the Open Market Sale Agreement for net proceeds of $5.7 million, after deducting sales agent commission. The Company may cancel its at-the-market program at any time upon written notice, pursuant to its terms.\n\nIn April 2025, we entered into an Equity Transfer Agreement with PAT and Wuxi Zhihe Daukang II Venture Capital Partnership, a venture capital partnership of which Dr. Wei-Wu He is a general partner, to acquire all of the equity interest in PAT owned by such fund at an aggregate consideration of RMB28.4 million (being ETP’s original investment amount) plus certain investment returns thereof calculated based on a 15% simple rate of interest per annum from the date of investment through the date of payment. In January 2026, CASI China paid the first installment of RMB7.0 million (approximately $1.0 million), the remaining consideration shall be paid by June 30, 2026.\n\n39\n\n[Table of Contents](#TOC)\n\nOn May 12, 2025, the Company entered into a definitive equity and assets transfer agreement with Kaixin Pharmaceuticals Inc. (\"Kaixin Pharmaceuticals\"), a Cayman Islands incorporated entity wholly-owned by Dr. Wei-Wu He, the then Chairman of the board of directors and CEO of the Company and two direct wholly-owned subsidiaries of the Company in China (the \"Target Companies\"), pursuant to which the Company shall sell and transfer, and Kaixin Pharmaceuticals shall purchase and acquire, 100% equity interests in both Target Companies (the \"Target Equity Interests\"), and all licensing rights, distribution rights, supply arrangements and related rights related to BI-1206 (in China), CID-103(in Asia excluding Japan) and Thiotepa (in China excluding Hong Kong, Macau and Taiwan) (the \"Target Pipeline Products\") for an aggregate purchase price of $20.0 million, which shall include assumption of up to $20.0 million of indebtedness of the Company (the \"Transaction\"). The closing of the Transaction shall be subject to certain customary conditions, including resolution of certain judicial freeze on the Target Equity Interests issued in connection with certain ongoing legal dispute of the Company. As part of the Transaction, the Company and Kaixin Pharmaceuticals plan to enter into certain novation and/or assignment agreements with relevant licensors to effect the transfer of rights related to the Target Pipeline Products, which is expected to be completed concurrently with the transfer of the Target Equity Interests. After the closing of the Transaction, the Company expects to retain the rights related to CID-103 (in Japan and non-Asian regions), EVOMELA®, FOLOTYN®, CNCT19 and CB-5339, and remain firmly committed to progressing CID-103 at an accelerated pace.\n\nOn December 11, 2025, we entered into a convertible note purchase agreement (the “Purchase Agreement”) with ETP Global III Fund LP, a partnership controlled by Dr. Wei-Wu He (the “Purchaser”), pursuant to which the Company would issue and sell convertible notes in an aggregate principal amount of US $20 million to the Purchaser through a private placement transaction. This investment was planned to provide runway to fund the Company through a Phase 1 study in China in renal allograft anti-body-mediated rejection (AMR) as well as development toward a stable, high concentration protein solution for subcutaneous formulation. The sale of the convertible notes was in tranches and subject to multiple closings with certain closing conditions, including Purchaser being satisfied with the business results and financials status of the Company and the use of proceeds upon each closing. Each convertible note issued pursuant to the Purchase Agreement will mature in 36 months, bearing interest of 12% per annum from the issuance date. Upon maturity, each note may, at the Company’s option, be convertible into ordinary shares of the Company, par value US $0.0001 per share (the “Shares”), at a conversion price of the volume weighted average closing price of the Company’s Shares during the five consecutive trading days immediately preceding the maturity date. The Purchaser also has the right to convert each note into Shares at any time from and including the 91st day after the issuance thereof to and including the maturity date at a conversion price of the volume weighted average closing price of the Company’s Shares during the five consecutive trading days immediately preceding the date of conversion notice by the Purchaser. In no event shall the conversion price be higher than US $2 per ordinary Share or lower than US $1 per Share. As of the date of this annual report, notes with an aggregate principal amount of US $20 million in four tranches have been issued.\n\nOn January 7, 2026, the Company’s board of directors received from Dr. Wei-Wu He, the chairman of the Company’s board of directors, a preliminary non-binding proposal, which was further amended by an updated preliminary non-binding proposal dated January 9, 2026 (the \"Proposal\"), to acquire all of the outstanding ordinary shares that are not already beneficially owned by Dr. He for a proposed purchase price of US$1.15 per ordinary share. As of the date of this report, no decisions have been made with respect to the Proposal. There can be no assurance that any definitive offer will be received, that any definitive agreement will be executed relating to the transaction contemplated by the Proposal, or that the transaction contemplated by the Proposal, or any other similar transaction will be approved or consummated.\n\nOn February 23, 2026, we received a determination letter from the Hearings Panel (the “Panel”) of The Nasdaq Stock Market (“Nasdaq”), notifying the Company that the Panel determined to delist the Company’s securities from Nasdaq. As a result, the Company securities was suspended and delisted from Nasdaq. Our ordinary shares started to trade on OTCQB market under the ticker “CASIF” on April 14, 2026.\n\nOur principal executive offices are located at 1701-1702, China Central Office Tower 1, No. 81 Jianguo Road Chaoyang District, Beijing, 100025, People’s Republic of China. Our telephone number at this address is +86 (10) 6508 6063. Our registered office in the Cayman Islands is located at Maples Corporate Services Limited, P.O. Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands. Our agent for service of process in the United States is located 601 Gateway Blvd, Suite 1250, South San Francisco, California 94080.\n\nThe SEC maintains an Internet website that contains reports, proxy and information statements, and other information regarding us that filed electronically with the SEC, which can be accessed at *http://www.sec.gov*. Our annual reports, quarterly results, press release and other SEC filings can also be accessed via our investor relations session at *https://www.casipharmaceuticals.com/overview*.\n\n40\n\n[Table of Contents](#TOC)\n\n**B.**\n\n**Business Overview**\n\nThe Company has historically built and operated a fully integrated biopharmaceutical organization dedicated to the development and commercialization of innovative therapeutics, with a primary focus on the hematology/oncology field and the China market. On May 9, 2025, the Company entered into a definitive agreement to sell its two wholly-owned subsidiaries in China and to transfer certain regional rights to the pipeline products BI-1206, CID-103 (in Asia excluding Japan) and Thiotepa to an entity wholly-owned by its Chairman and then CEO. This transaction marked a fundamental shift in the Company’s corporate structure and strategic focus. With the divestiture of its China-based operations, the Company has repositioned itself as a clinical-stage biopharmaceutical company developing CID-103, an anti-CD38 monoclonal antibody, for patients with organ transplant rejection and autoimmune diseases. The Company now concentrates its resources on the accelerated global development of CID-103, for which it retains rights in Japan and all non-Asian regions. In parallel, the Company continues to manage its other retained assets, including EVOMELA®, FOLOTYN®, CNCT19 and CB-5339, with a primary strategic emphasis on advancing CID-103 toward key clinical and regulatory milestones.\n\n**Development of Our****Core Product****s******\n\nWe launched our first commercial product, EVOMELA® (Melphalan for Injection) in China in August 2019. In China, EVOMELA® is approved for use as a conditioning treatment prior to stem cell transplantation and as a palliative treatment for patients with multiple myeloma. EVOMELA®, was originally licensed from Spectrum Pharmaceuticals, Inc. (“Spectrum”). We had a supply agreement with Spectrum to support our application for import drug registration and for commercialization purposes. Spectrum completed the sale of its portfolio of FDA-approved hematology/oncology products including EVOMELA® to Acrotech on March 1, 2019. The original supply agreement with Spectrum was assumed by Acrotech, and Spectrum agreed to continue with a short-term supply agreement for EVOMELA® for the initial commercial product supply in connection with the launch, with the long-term supply assumed by Acrotech.\n\nIn July 2023, we entered into a tripartite assignment agreement with MICL, MMCo and Acrotech, pursuant to which, MICL’s rights and obligations under that certain License, Development and Commercialization Agreement (as amended and restated) dated as of May 29, 2013 for the commercialization of FOLOTYN® (Pralatrexate) in China, with certain terms of such rights and obligations amended as agreed to by the parties, is assigned to us. FOLOTYN® is a dihydrofolate reductase inhibitor indicated for the treatment of patients with relapsed or refractory peripheral T-cell lymphoma (“PTCL”). This product was approved by both the US FDA and China’s NMPA for PTCL. We also entered into a supply agreement with Acrotech. pursuant to which Acrotech. will supply to the Company FOLOTYN® subject to terms and on the conditions. On August 27, 2025, the Company received verbal communication from the CDE of the NMPA that the renewal application for the original Import Drug Registration License for FOLOTYN® had not been granted and that, as a result, the current Import Drug Registration License for FOLOTYN® expired as of August 25, 2025. Later, the Company received a formal notice from the NMPA that the Company’s renewal application was not approved. As a result, the Company ceased the sale of FOLOTYN® in China pursuant to the relevant regulations and rules. In the meantime, the Company may continue FOLOTYN® clinical trial activities in China as permitted by relevant governmental authorities. The Company will continue to monitor relevant developments and take commercially reasonable measures with respect to the commercialization plan of FOLOTYN® in China.\n\nIn May 2025, we received NMPA marketing approval for MAFALAN® (generic melphalan), our first self-manufactured commercial product in China. MAFALAN® is approved for high-dose conditioning treatment prior to hematopoietic stem cell transplantation in patients with multiple myeloma and for palliative treatment of patients with multiple myeloma for whom oral therapy is not appropriate. Manufactured at our own cGMP facility in the Wuxi Huishan Economic Development Zone, MAFALAN® is positioned as a domestically produced alternative to the imported originator product, EVOMELA®, leveraging localized production to achieve competitive cost structure while maintaining international quality standards. We will continue to invest our time, resources, and efforts in the commercialization of MAFALAN® in China, and, over time, in global markets, including hospital formulary inclusions, physician engagement, and reimbursement opportunities.\n\nIn February 2026, we received NMPA’s approval for thiotepa, we intend to advance and commercialize this product in China. The Company has an exclusive China license and distribution rights to a novel formulation of thiotepa, a chemotherapeutic agent, which has multiple indications including as a conditioning treatment for use prior to certain allogeneic haemopoietic stem cell transplants. Thiotepa has a long history of established use in the hematology/oncology setting.\n\n41\n\n[Table of Contents](#TOC)\n\n**Other****Candidat****es**\n\nCID-103 (anti-CD38 monoclonal antibody)\n\nCID-103 is a full human IgG1 anti-CD38 monoclonal antibody recognizing a unique epitope that has demonstrated an encouraging pre-clinical efficacy and safety profile compared to other anti-CD38 monoclonal antibodies, and which we have exclusive global rights. CID-103 is being developed for the treatment of patients with multiple myeloma. The Phase 1 dose escalation and expansion study of CID-103, in patients with previously treated, relapsed or refractory multiple myeloma has been suspended in France and the UK. A separate IND for the R/R MM indication has been approved by the Center for Drug Evaluation (CDE) of China's National Medical Products Administration (NMPA) in June 2024. Peer-reviewed medical literature, including important articles in the New England Journal of Medicine, points to the promise of the anti-CD38 approach in organ transplant rejection and autoimmune diseases such as immune thrombocytopenia (ITP). In May 2024, we announced the clearance of IND application with the US FDA for the initiation of a phase 1/2 study of CID-103 in adults with ITP. In October 2024, the CDE approved the CTA for a phase 1/2 study of CID-103 in patients with chronic Immune Thrombocytopenia (ITP). The Chinese ITP study is part of the global study that was approved by the US FDA in May 2024. In January 2025, we announced the first patient was enrolled and dosed in the ITP trial. In August 2025, we announced FDA clearance of an IND application for CID-103 in adults with active and chronic active renal allograft antibody mediated rejection (AMR). In January 2026, we announced that China NMPA has approved a CTA conduct a Phase 1/2 clinical trial for CID-103 in adults with chronic active renal allograft AMR. The Phase 1/2 clinical trial is a dose-ranging and safety study evaluating the tolerability and efficacy of CID-103 in patients with renal allograft AMR.\n\nBI-1206 (anti-FcyRIIB antibody)\n\nIn October 2020, the Company entered into an exclusive licensing agreement with BioInvent International AB (“BioInvent”) for the development and commercialization of novel anti-FcγRIIB antibody, BI-1206, in mainland China, Taiwan, Hong Kong and Macau. BioInvent is a biotechnology company focused on the discovery and development of first-in-class immune-modulatory antibodies for cancer immunotherapy. BI-1206 is being investigated in a Phase 1/2 trial, in combination with anti-PD1 therapy Keytruda® (pembrolizumab), in patients with solid tumors, and in a Phase 1/2 trial in combination with MabThera® (rituximab) in patients with relapsed/refractory non-Hodgkin lymphoma (NHL).\n\nCTA was approved by NMPA in December 2021 and ethics committee approvals have been received in January of 2022. The Company obtained approval from HGRAO in April 2022. The Company is planning a Phase 1 study of BI-1206 in combination with rituximab in patients with NHL (mantle cell lymphoma, marginal zone lymphoma, and follicular lymphoma) to assess PK, safety and tolerability, with a goal to select the Recommended Phase 2 Dose based on early signs of clinical efficacy as part of its development program for BI-1206 in China. The study received regulatory approval from the China Center for Drug Evaluation (“CDE”) in the second quarter of 2022, and the first patient was enrolled and dosed in the third quarter of 2022. The enrollment for Phase 1 study has been completed in December 2025.\n\nCNCT19 (Inaticabtagene Autoleucel)\n\nIn November 2023, The NMPA has granted market approval for Juventas' investigational cell therapy, CNCT19, for the treatment of relapsed and refractory B-cell acute lymphoblastic leukemia (r/r B-ALL) in China. In June 2019, the Company acquired worldwide license and commercialization rights to CNCT19 from Juventas, a China-based domestic company engaged in cell therapy. Juventas continues to be responsible for the clinical development and regulatory submission and maintenance of CNCT19 regulatory applications and we are responsible for the launch and commercial activities of CNCT19 under the direction of a joint steering committee.\n\nCNCT19 is an autologous CD19 CAR-T investigative product (CNCT19) being developed by our partner Juventas for which we have exclusive worldwide co-commercial and profit-sharing rights. CNCT19 is being developed as a potential treatment for patients with hematological malignancies which express CD19 including, B-cell acute lymphoblastic leukemia (“B-ALL”) and B-cell non-Hodgkin lymphoma (“B-NHL”). CNCT19 targets CD19, a B-cell surface protein widely expressed during all phases of B-cell development and a validated target for B-cell driven hematological malignancies. CD19 targeted CAR constructs from several different institutions have demonstrated consistently high antitumor efficacy in children and adults with relapsed B-cell acute lymphoblastic leukemia (B-ALL), chronic lymphocytic leukemia (CLL), and B-cell non-Hodgkin lymphoma (B-NHL). In November 2023, the NMPA\n\n42\n\n[Table of Contents](#TOC)\n\nhas granted market approval for Juventas' investigational cell therapy, CNCT19 (Inaticabtagene Autoleucel), for the treatment of relapsed and refractory B-cell acute lymphoblastic leukemia (r/r B-ALL) in China.\n\nCB-5339 (VCP/p97inhibitor)\n\nCB-5339 is a novel VCP/p97 inhibitor focused on valosin-containing protein (VCP)/p97 as a novel target in protein homeostasis, DNA damage response and other cellular stress pathways for therapeutic use in the treatment of patients with various malignancies. We entered into an exclusive license on March 21, 2021,with Cleave Therapeutics, Inc. (“Cleave”) for the development and commercialization of CB-5339 in mainland China, Hong Kong, Macau and Taiwan. On July 18, 2023, we entered into an assignment agreement with Cleave, pursuant to which we obtained the global intellectual property rights related to CB-5339. CB-5339, an oral second-generation, small molecule VCP/p97 inhibitor, has been evaluated in a Phase 1 clinical trial in patients with acute myeloid leukemia (AML) and myelodysplastic syndrome (MDS). We submitted the CB-5339 CTA application for the multiple myeloma indication in March 2022 and received approval from the NMPA in January 2023.\n\n**Product We Distribute**\n\nIn January 2025, we entered into a distribution agreement with Guangzhou Gloria Biosciences Co., Ltd. for the distribution of YuTuo® (Zimberelimab). Zimberelimab is the world's first fully human anti-PD-1 monoclonal antibody in market developed by the transgenic rat platform, OmniRat®.The first indication of relapsed or refractory classical Hodgkin's lymphoma (r/r HL) was approved in China in August 2021. Zimberelimab has been selected into the \"Chinese Society of Clinical Oncology (CSCO) Diagnosis and Treatment Guidelines for Malignant Lymphoma\" for 4 consecutive years since 2020. Zimberelimab's second indication for recurrent or metastatic cervical cancer (r/m CC) was designated for Breakthrough Therapy and was approved in China in 2023. Additionally, it was included in the NRDL in December 2024.\n\n**License and Distribution Agreements**\n\nEVOMELA® License Arrangements with Acrotech\n\nThe Company has product rights and perpetual exclusive licenses from Acrotech to develop and commercialize its commercial product EVOMELA® in the greater China region (which includes mainland China, Taiwan, Hong Kong and Macau).\n\nAs previously disclosed, beginning in December 2024, the Company had a dispute with Acrotech concerning the License Agreement (the “License Agreement”), dated September 17, 2014, between Spectrum Pharmaceuticals, Inc. and the Company, granting the exclusive rights to the Company to commercialize Evomela® in China, which was later assigned to Acrotech on March 1, 2019. In April 2026, the Company and Acrotech resolved their dispute through an amicable settlement and entered into a binding term sheet.  The parties are currently negotiating a longer-form settlement agreement. See “Item 8 — Financial Information — A. Consolidated Statements and Other Financial Information – Legal Proceedings”.\n\nFOLOTYN® (Pralatrexate) License Agreement with MICL, MMCo and Acrotech\n\nOn July 31, 2023, the Company entered into a tripartite assignment agreement (the “FOLOTYN® Assignment Agreement”) with MICL, MMCo and Acrotech, pursuant to which, MICL’s rights and obligations under that certain License, Development and Commercialization Agreement (as amended and restated) dated as of May 29, 2013 for the commercialization of FOLOTYN® (Pralatrexate) in China, with certain terms of such rights and obligations amended as agreed to by the parties, is assigned to the Company.\n\nIn relation to the FOLOTYN® Assignment Agreement, the Company and MICL entered into a payment agreement (the “Payment Agreement”), pursuant to which the Company will pay MICL a total of US$ 12 million, including (i) a one-time payment of US$ 2 million which will be paid upon completion of the quality audit; (ii) a one time, non-refundable and non-creditable payment of US$ 2 million to be paid when the aggregate net sales of FOLOTYN® in China equals to or exceeds US$ 30,000,000, and (iii) in each calendar quarter, a one-time, non-refundable and non-creditable payment of an amount equal to 10% of net sales of FOLOTYN® in China in the preceding calendar quarter, until an aggregate amount of US$ 8 million is paid in such quarterly instalments. In the event that the Company has not paid the full amount of payment of US$10 million under (ii) and (iii) above (the “Deferred Payments”) on July 31, 2028, the remaining amount shall become immediately due and payable, unless the drug approval in China is not renewed by relevant regulatory authorities. On August 27, 2025, the Company received verbal communication from the CDE of the NMPA that the\n\n43\n\n[Table of Contents](#TOC)\n\nrenewal application for the original Import Drug Registration License for FOLOTYN®  had not been granted and that, as a result, the current Import Drug Registration License for FOLOTYN®  expired as of August 25, 2025. Later, the Company received a formal notice from the NMPA that the Company’s renewal application was not approved. As a result, the Company ceased the sale of FOLOTYN® in China pursuant to the relevant regulations and rules. In the meantime, the Company may continue FOLOTYN® clinical trial activities in China as permitted by relevant governmental authorities. The Company will continue to monitor relevant developments and take commercially reasonable measures with respect to the commercialization plan of FOLOTYN® in China.\n\nDistribution Agreement with China Resources Pharmaceutical Commercial Group International Trading Co., Ltd. (previously known as China Resources Guokang Pharmaceuticals Co., Ltd.)\n\nIn March 2019, the Company entered into a three-year exclusive distribution agreement with China Resources Pharmaceutical Commercial Group International Trading Co., Ltd. (“CRPCGIT”), to appoint CRPCGIT on an exclusive basis as its distributor to distribute EVOMELA® in the territory of China, subject to certain terms and conditions. The Company’s internal marketing and sales team are responsible for commercial activities, including, for example, direct interaction with therapeutic area experts, physicians, hospital centers and the generation of sales. The agreement was renewed in March 2022 for two years, and further extended in February 2024 for an additional three years. In June 2025, the Company and CRPCGIT entered into a modified distribution agreement, in which the Company allows CRPCGIT to return goods that are close to expiration dates and cannot be sold.\n\nDistribution Agreement with China National Medicines Corporation Ltd.\n\nOn December 6, 2023, the Company entered into an exclusive distribution agreement with China National Medicines Corporation Ltd. (“CNMC”) and CASI China. Under the terms of the Agreement, the Company appointed CNMC on an exclusive basis as its sole distributor for the sale of Pralatrexate for Injection (FOLOTYN®) in the territory of China during the term of one year, subject to certain terms and conditions. The agreement was extended for another two years and valid until December 5, 2026. CNMC may appoint sub-distributors of its choice in furtherance of this goal provided that the Company has been notified in writing and received the due diligence or any other information of the sub-distributor as the Company requests. CASI China is authorized to coordinate and communicate with parties to the Agreement and provide supports for the performance of the Agreement.\n\nDistribution Agreement with Guangzhou Gloria Biosciences Co., Ltd.\n\nIn January 2025, CASI Wuxi entered into a distribution agreement with Guangzhou Gloria Biosciences Co., Ltd., pursuant to which CASI Wuxi was appointed as a distributor for the sales of YuTuo® (Zimberelimab) in the territory of China during the term of three years, subject to certain terms and conditions.\n\nPrecision Autoimmune Therapeutics Co., Ltd., (previously known as Beijing Tianshi Tongda Pharmaceuticals Technology Co., Ltd)\n\nIn May 2022, the Company entered into a Sublicense Agreement (the “PAT Sublicense Agreement”) with PAT, a company established under the laws of China, pursuant to which the Company granted PAT an exclusive (subject to the commercialization and co-marketing rights), perpetual, worldwide license, with the right to freely grant further sublicenses subject to terms and conditions in the PAT Sublicense Agreement, for the investigational anti-CD38 monoclonal antibody TSK011010 licensed and controlled by the Company from Black Belt Therapeutics Limited, in the treatment, prevention and diagnosis of autoimmune diseases, conditions and disorders in humans. Pursuant to the PAT Sublicense Agreement, PAT will make an upfront payment of US$10,000,000 equivalent in two equal instalments upon completion of its first and second financing, respectively, plus potential future payments or reimbursement of development and sales milestones and royalties to the Company.\n\nJuventas License Arrangements\n\nIn June 2019, the Company entered into a license agreement for exclusive worldwide license to commercialize an autologous anti-CD19 T-cell therapy product (CNCT19) from Juventas (the “Exclusive License Agreement”). Juventas is a China-based company engaged in cell therapy. The terms of the agreement include RMB 70 million of milestone payments upon the registration of Phase II clinical trial of CNCT19 and sales royalty payments. The milestone was met during the third quarter of 2020, the Company paid the milestone payment of RMB 70 million to Juventas in September 2020, and recognized it as acquired in-process research and development expenses in the consolidated statement of operations and comprehensive loss in 2020.\n\n44\n\n[Table of Contents](#TOC)\n\nIn September 2020, Juventas and its shareholders (including CASI Biopharmaceuticals, a subsidiary of the Company) agreed to certain terms and conditions required by a new third-party investor to facilitate the Series B financing of Juventas, pursuant to which the Company agreed to amend and supplement the original licensing agreement (the \"Supplementary Agreement\") by agreeing to pay Juventas certain percentage of net profits generated from commercial sales of CNCT19 in addition to the royalty fee payment calculated as a percentage of net sales. The Supplementary Agreement also specifies a minimum annual target net profit to be distributed to Juventas and certain other terms and obligations. In return, the Company obtained additional equity interests in Juventas.\n\nUnder the Supplementary Agreement, Juventas and the Company will jointly market CNCT19, including, but not limited to, establishing medical teams, developing medical strategies, conducting post-marketing clinical studies, establishing Standardized Cell Therapy Centers, establishing and training providers with respect to cell therapy, testing for cell therapy, and monitoring quality controls (cell collection and transfusion, etc.), and patient management (adverse reactions treatment, patients’ follow-up visits, and establishment of a database). The Company also will reimburse Juventas for a portion of Juventas’ marketing expenses as reviewed and approved by a joint commercial committee to be constituted. The Company will continue to be responsible for recruiting and establishing a sales team to commercialize CNCT19.\n\nOn October 26, 2021, Juventas completed its Series C financing. Upon the completion of Juventas Series C financing, the Company’s equity ownership in Juventas decreased to 12.01% on a fully diluted basis, with the total fair value of the equity interest amounted to RMB 206 million.\n\nIn September 2022, CASI Biopharmaceuticals entered into an Equity Transfer Agreement with Shenzhen Jiadao Gongcheng Equity Investment Fund, LLP (“Jiadao Gongcheng”), pursuant to which CASI Biopharmaceuticals agreed to transfer its equity interest in Juventas to Jiadao Gongcheng in the amount of RMB 240.9 million (approximately US$33.9 million). The transaction was closed in November 2022, and the Exclusive License Agreement is still effective after this equity transfer.\n\nThe Company is currently involved in arbitration proceedings against Juventas in relation to Juventas’ purported termination of the CNCT19 Agreements. See “Item 8 — Financial Information — A. Consolidated Statements and Other Financial Information – Legal Proceedings” for further information.\n\nBioInvent International AB\n\nIn October 2020, the Company entered into an exclusive licensing agreement with BioInvent for the development and commercialization of novel anti-FcγRIIB antibody, BI-1206, in mainland China, Taiwan, Hong Kong and Macau. BioInvent is a biotechnology company focused on the discovery and development of first-in-class immune-modulatory antibodies for cancer immunotherapy. BI-1206 is being investigated in a Phase 1/2 trial, in combination with anti-PD1 therapy Keytruda® (pembrolizumab), in patients with solid tumors, and in a Phase I trial in combination with MabThera® (rituximab) in patients with relapsed/refractory non-Hodgkin lymphoma (NHL). CTA was approved by NMPA in December 2021 and ethics committee approvals have been received in January of 2022. The Company obtained approval from HGRAO in April 2022. The Company is planning a Phase 1 study of BI-1206 in combination with rituximab in patients with NHL (mantle cell lymphoma, marginal zone lymphoma, and follicular lymphoma) to assess PK, safety and tolerability, with a goal to select the Recommended Phase 2 Dose based on early signs of clinical efficacy as part of its development program for BI-1206 in China. The study received regulatory approval from the CDE in the second quarter of 2022, and the first patient was enrolled and dosed in the third quarter of 2022. The enrollment for Phase 1 study has been completed in December 2025.\n\nUnder the terms of the license agreement, BioInvent and CASI will develop BI-1206 in both hematological malignancies and solid tumors, with CASI responsible for commercialization in China and associated markets. CASI made a US$5.9 million upfront payment in November 2020 to BioInvent and will pay up to US$83 million in development and commercial milestone payments plus tiered royalties in the high-single to mid-double-digit range on net sales of BI-1206.\n\nIn conjunction with our license agreement entered into with BioInvent, we made a SEK 53.8 million investment in 1.2 million new shares of BioInvent, and 588,000 new warrants, each warrant with a right to subscribe for 1 new share in BioInvent within a period of five years and at a subscription price of SEK 78.50 per share. As of December 31, 2025, we have sold all ordinary shares of BioInvent and all warrants held by us were expired.\n\n45\n\n[Table of Contents](#TOC)\n\nAs an import drug product into China, we expect that future supply of BI-1206 will be met by our partner BioInvent and its contract manufacturers. For local development in China, we expect that our clinical materials and commercial inventory will be supplied by one or more contract manufacturers.\n\nBlack Belt Therapeutics Limited\n\nIn April 2019, the Company entered into a license agreement with a newly established, privately held UK Company Black Belt Therapeutics Limited (“Black Belt”) for exclusive worldwide rights to CID-103, an investigational anti-CD38 monoclonal antibody (Mab) (formerly known as TSK011010). In conjunction with the license agreement, CASI invested 2 million euros in Black Belt Tx Ltd. (“Black Belt Tx”), the holding company of Black Belt. In July 2021, Alesta Therapeutics B.V. (“Alesta”) was incorporated as the parent company holding all shares of Black Belt Tx with same ownership structure as Black Belt Tx.\n\nThe Company expects that its clinical materials and commercial inventory will be supplied by one or more contract manufacturers with whom the Company has contracted with. Under the terms of the agreement, we obtained global rights to CID-103 for an upfront payment of 5 million euros as well as certain milestone and royalty payments. In June 2021, we achieved the First-Patient-In (FPI) in the Phase 1 dose escalation and expansion study of CID-103, and made US$750,000 milestone payment in June 2021 and €250,000 payment in August 2021 under the terms of the agreement. As mentioned above, in May 2022, the Company entered into the Sublicense Agreement to grant PAT an exclusive, perpetual, worldwide license to the investigational anti-CD38 monoclonal antibody TSK011010 for autoimmune indications.\n\nCleave Therapeutics, Inc.\n\nIn March 2021, the Company entered into an exclusive license agreement (the “Cleave License Agreement”) with Cleave Therapeutics, Inc. (“Cleave”) for the development and commercialization of CB-5339, an oral novel VCP/p97 inhibitor, in both hematological malignancies and solid tumors, in mainland China, Hong Kong, Macau and Taiwan . Cleave is a clinical-stage biopharmaceutical company focused on valosin-containing protein (VCP)/p97 as a novel target in protein homeostasis, DNA damage response and other cellular stress pathways for therapeutic use in the treatment of patients with cancer.\n\nCB-5339 has been evaluated by Cleave in a Phase 1 clinical trial in patients with acute myeloid leukemia (AML) and myelodysplastic syndrome (MDS). Under the terms of the agreement, the Company is responsible for development and commercialization in China and associated markets. The Company paid a US$5.5 million upfront payment to Cleave in 2021 and will pay up to US$74 million in development and commercial milestone payments plus tiered royalties in the high-single to mid-double-digit range on net sales of CB-5339. In conjunction with the license agreement, the Company made a US$5.5 million investment in Cleave through a convertible note.\n\nOn July 18, 2023, the Company entered into an assignment agreement with Cleave (the “Cleave Assignment Agreement”), pursuant to which the Company obtained the global intellectual property rights related to CB-5339. The Cleave Assignment Agreement also terminated and superseded the Cleave License Agreement for CB-5339 the Company previously entered into with Cleave. Pursuant to the Cleave Assignment Agreement and partially in exchange for the transfer of the global intellectual property rights for CB-5339 as well as all remaining CB-5339 drug substance and drug product to the Company and a repayment in the amount of USD $1 million to the Company, the Company agreed to the termination of that certain outstanding convertible promissory note issued by Cleave to the Company in 2021 with a principal amount of USD $5.5 million. Cleave is also eligible to receive up to US$66 million in commercial and sales milestone payments, plus a 2.5% royalty on net sales of CB-5339 and any other VCP/p97 inhibitor covered by the Cleave Assignment Agreement, in each case subject to the terms and on the conditions set forth in the Cleave Assignment Agreement.\n\nRiemser Pharma GmbH\n\nIn August 2019, the Company entered into an exclusive license and distribution agreement with Riemser Pharma GmbH (“Riemser”), pursuant to which the Company obtained exclusive distribution rights for Thiotepa in China. Under the agreement, Riemser will be responsible for manufacturing and supplying the Company with clinical trials materials and commercial drug product, and costs of clinical trials (if any) for the registration, product launch and commercialization of Thiotepa in China. In January 2020, Riemser was acquired by Esteve Healthcare, S.L. (“ESTEVE”), an international pharmaceutical company headquartered in Barcelona, Spain. In November 2022, the Company entered into an Amendment with Esteve, pursuant to which the Company and Esteve will equally share the costs of clinical trials (if any) for the registration of Thiotepa in China. After the product is launched, the Company will be subject to annual minimum purchase as prescribed in the agreement.\n\n46\n\n[Table of Contents](#TOC)\n\nPharmathen Global BV\n\nIn October 2019, the Company entered into an exclusive distribution agreement with Pharmathen Global BV (\"Pharmathen\") for the development and distribution of Octreotide LAI microsphere in China. Octreotide LAI formulations, which are approved in various European countries, are considered a standard of care for the treatment of acromegaly and the control of symptoms associated with certain neuroendocrine tumors. The Company paid and expensed an upfront payment of 1 million euros in 2019 and milestone payment of 1.5 million euros in 2020 with achievements of certain milestones.\n\nOn February 2, 2023, the Company entered into a termination agreement and release with Pharmathen, pursuant to which (i) both parties agreed to terminate the exclusive distribution license agreement in 2019 with respect to product Octreotide LAI, (ii) the Company returned all confidential information provided by Pharmathen and cancelled all regulatory approvals or other registrations it had obtained as an authorized distributor; and (iii) Pharmathen refunded 1.25 million euros to the Company.\n\n**Intellectual Property**\n\nWe generally seek patent protection for our technology and product candidates in China, the United States, Canada and other key markets. The patent position of biopharmaceutical companies generally is highly uncertain and involves complex legal and factual questions. Our success will depend, in part, on whether we can: (i) obtain patents to protect our own products; (ii) obtain licenses to use the technologies of third parties, which may be protected by patents; (iii) protect our trade secrets and know-how; and (iv) operate without infringing the intellectual property and proprietary rights of others.\n\nWith regards to our commercial drug EVOMELA® licensed for greater China rights from our partner, we have acquired exclusive licenses to intellectual property to enable us to develop and continue to commercialize EVOMELA® in China.\n\nWith regards to our commercial drug FOLOTYN® licensed for China rights from our partner, we have acquired exclusive licenses to intellectual property to enable us to develop and continue to commercialize FOLOTYN® in China.\n\nWith regards to CNCT19, we have acquired an exclusive license to intellectual property from our partner Juventas to enable us to co-commercialize CNCT19 in China and as well the rest of the world. Juventas is responsible for prosecuting and maintaining the licensed intellectual property.\n\nWith regards to BI-1206, we have acquired an exclusive license to intellectual property and the know-how from our partner BioInvent to enable us to develop and commercialize BI-1206 in our greater China commercial markets. BioInvent is responsible for prosecuting and maintaining the licensed BioInvent intellectual property.\n\nWith regards to CB-5339, we have obtained all rights and global intellectual property rights, as well as all remaining CB-5339 drug substance and drug product. Additionally, we will assume responsibility of CB-5339 IND application in the US.\n\nWith regards to our in-licensed anti-CD38 antibody candidate CID-103, we have acquired an exclusive worldwide license to patents around CID-103 and other anti-CD38 antibodies, covering multiple pending applications worldwide, directed to the antibodies themselves and treatment methods using the antibodies. We have since filed additional applications, with current pending applications including U.S., Australia, Canada, China, Europe, India, Japan, Korea, New Zealand, Singapore and Hong Kong. We intend to further expand our patent portfolio and in the submission stage of additional applications. The patent term for any patents granted from the earliest of these pending applications will expire in June 2038, assuming all annuities are paid and not considering any term extensions for regulatory approval that might be available.\n\nWith regards to the Thiotepa drug candidate, we have acquired exclusive licenses to intellectual property and/or the know-how to enable us to develop and commercialize this drug candidate in the China market.\n\nWe hold certain intellectual property in connection with a proprietary aurora kinase inhibitor that we no longer devote resources to. Our intellectual property for this asset remains available for business development partnering.\n\n47\n\n[Table of Contents](#TOC)\n\nWe currently own a number of registered trademarks and pending trademark applications for CASI, including our corporate logo and product name in China, the United States and other jurisdictions, and we are seeking further trademark protection for CASI, including our corporate logo, product name, and other marks in jurisdictions where available and appropriate.\n\nWe review and assess our portfolio on a regular basis to secure protection and to align our intellectual property strategy with our overall business strategy.\n\n**Sales and Marketing**\n\nWe rely on third-party distributors to distribute our approved medicines. For example, we have a long-standing business relationship with our sole distributor CRPCGIT for the in-licensed product EVOMELA®, and we established a business relationship with a sole distributor CNMC for the in-licensed product FOLOTYN®. In addition, we have developed and expanded our commercial capabilities to support our self-manufactured and other in-licensed products. MAFALAN® (melphalan for injection) is manufactured at our own facility in Wuxi, China, and was approved for marketing by the NMPA in May 2025. YuTuo® (zimberelimab injection) is distributed in China pursuant to a three-year distribution agreement we entered into with Guangzhou Gloria Biosciences Co., Ltd. in 2025, under which CASI China was appointed as a non-exclusive distributor. Our ability to maintain and grow our business will depend on our ability to maintain effective distribution channels that ensure the timely delivery of our medicines, as well as our ability to successfully manage our own manufacturing and supply operations.\n\n**Competition**\n\nCompetition in the pharmaceutical, biotechnology and biopharmaceutical industries is intense and based significantly on scientific and technological factors, the availability of patent and other protection for technology and products, the ability and length of time required to obtain governmental approval for testing, manufacturing and marketing and the ability to commercialize products in a timely fashion. Moreover, the biopharmaceutical industry is characterized by rapidly evolving technology that could result in the technological obsolescence of any products that we develop.\n\nWe compete with many specialized biopharmaceutical firms, as well as a growing number of large pharmaceutical companies that are applying biotechnology to their operations. It is probable that the number of companies seeking to develop products and therapies for the treatment of unmet needs in oncology will increase. Many biopharmaceutical companies have focused their development efforts in the human therapeutics area, including oncology and inflammation, and many major pharmaceutical companies have developed or acquired internal biotechnology capabilities or made commercial arrangements with other biopharmaceutical companies. These companies, as well as academic institutions, governmental agencies and private research organizations, also compete with us in recruiting and retaining highly qualified scientific personnel and consultants.\n\nThe biopharmaceutical industry has undergone, and is expected to continue to undergo, rapid and significant technological change. Consolidation and competition are expected to intensify as technical advances in each field are achieved and become more widely known. In order to compete effectively, we will be required to continually expand our scientific expertise and technology, identify and retain capable personnel and pursue scientifically feasible and commercially viable opportunities.\n\nOur competition will be determined in part by the potential indications for which our product candidates may be developed and ultimately approved by regulatory authorities. The relative speed with which we develop new products, complete clinical trials, obtain regulatory approvals, and complete the other requirements to get a pharmaceutical product on the market are critical factors in gaining a competitive advantage. We may rely on third parties to commercialize our products, and accordingly, the success of these products will depend in significant part on these third parties’ efforts and ability to compete in these markets. The success of any collaboration will depend in part upon our collaborative partners’ own competitive, marketing and strategic considerations, including the relative advantages of alternative products being developed and marketed by our collaborative partners and our competitors.\n\nMany of our existing or potential competitors have substantially greater financial, technical and human resources than we do and may be better equipped to develop, manufacture and market products. In addition, many of these competitors have extensive experience in pre-clinical testing and human clinical trials and in obtaining regulatory approvals. The existence of competitive products, including products or treatments of which we are not aware, or products or treatments that may be developed in the future, may adversely affect the marketability of products that we may develop. Our competitors’ drugs may be more effective than any drug we may\n\n48\n\n[Table of Contents](#TOC)\n\ncommercialize and may render our product candidates obsolete or non-competitive before we can recover the expenses of developing our product candidates.\n\nIn September 2022, Xi’An Libang Pharmaceuticals Co., Ltd. introduced the first domestically produced injectable melphalan formulated with propylene glycol as a co-solvent. Subsequently, in March 2025, Sichuan Huiyu Pharmaceutical Co., Ltd. launched the second domestically produced injectable melphalan, utilizing Captisol® as a co-solvent. These domestically manufactured injectable melphalan products directly compete with our marketed product EVOMELA® as well as our generic melphalan product, and have negatively impacted, and may continue to negatively impact, the marketability of our current and future products.\n\nCNCT19 faces promotional challenge, primarily due to the saturation of CAR-T clinical trials in China. The abundance of ongoing studies within this therapeutic area creates intense competition for eligible patients, making it increasingly difficult to find enough self-paid patients.\n\nFOLOTYN® has no direct competitors with the same mechanism of action; however, as a traditional chemotherapy, it faces competition from treatments with novel targets. In the indication of R/R PTCL, its main competitors include Chidamide, Liposomal Mitoxantrone, and Golidocitinib, all of which are listed in the NRDL. The inclusion of these alternatives in the NRDL has led to increased competition, resulting in market share erosion and an impact on FOLOTYN®'s revenue stream.\n\nFor CID103, Biogen has initiated a phase 3 trial to evaluate Felzartamab  for the treatment of late Antibody-Mediated Rejection (AMR) in Kidney Transplant patients and  is also developing Felzartamab in IgA nephropathy and primary membranous nephropathy. Takeda is developing Mezagitamab in a global phase 3 trial in Immune Thrombocytopenia. Additionally, Keymed Biosciences and Timberlyne Therapeutics are developing CM313, amonoclonal antibody that targets CD38 for diseases of high unmet medical needs, including treatment-refractory Immune Thrombocytopenia.\n\n**Regulations**\n\nU.S. Food and Drug Administration (FDA)\n\nOur research, development, testing, manufacture, labeling, sale, marketing, advertising, and distribution of therapeutics in the United States, China and other countries are subject to extensive regulations by federal, state, local and foreign governmental authorities.\n\nIn the United States, the FDA regulates the development and commercialization of drugs and biologics. Drugs are subject to regulation under the Federal Food, Drug, and Cosmetic Act (FFDCA), and biological products, in addition to being subject to certain provisions of the FFDCA, are regulated under the Public Health Service Act (PHSA). We believe that the FDA will regulate the products currently being developed by us or our collaborators as drugs or biologics. Both the FFDCA and PHSA and corresponding regulations govern, among other things, the testing, manufacturing, safety, efficacy, labeling, storage, record keeping, advertising and other promotion of biologics and drugs, as the case may be.\n\nFrom time to time, legislation is drafted, introduced and passed in Congress that could significantly change the statutory provisions governing the approval, manufacturing and marketing of products regulated by the FDA. In addition to new legislation, FDA regulations and policies are often revised or reinterpreted by the agency in ways that may significantly affect our business and our product candidates or any future product candidates we may develop. It is impossible to predict whether further legislative or FDA regulation or policy changes will be enacted or implemented and what the impact of such changes, if any, may be.\n\nPreparing drug and biologic candidates for regulatory approval is a costly and time-consuming process. Generally, a developer first must conduct pre-clinical studies in the laboratory and in animal model systems in accordance with applicable FDA requirements, including Good Laboratory Practice regulations, to gain preliminary information on an agent’s effectiveness and to identify any safety problems. The results of these studies, together with manufacturing information and analytical data as well as protocols and detailed descriptions for proposed clinical investigations, are submitted to FDA as a part of an Investigational New Drug Application (IND) for a drug or biologic, which must become effective before human clinical trials of an investigational drug can begin. An IND application will automatically become effective 30 days after receipt by the FDA, unless before that time the FDA raises concerns or questions about issues, such as the conduct of the clinical trials as outlined in the IND application, and places the clinical trial(s) on a clinical hold. In such a case, the IND application sponsor and the FDA must resolve any outstanding FDA concerns or questions before clinical trials can proceed. We cannot be certain that submission of an IND application will result in the FDA allowing clinical trials to begin.\n\n49\n\n[Table of Contents](#TOC)\n\nWe or our collaborators must then conduct adequate and well-controlled clinical trials, in accordance with applicable IND regulations, Good Clinical Practices (“GCPs”), and other clinical-trial related regulations, to establish the safety and efficacy of the candidate for each proposed indication. We or our collaborators will be required to select qualified investigators (usually physicians within medical institutions) to supervise the administration of the products, test or otherwise assess patient results, and collect and maintain patient data; monitor the investigations to ensure that they are conducted in accordance with applicable requirements, including the requirements set forth in the general investigational plan and protocols contained in the IND; and comply with applicable reporting and recordkeeping requirements. The study protocol and informed consent information for study subjects in clinical trials must also be approved by an IRB for each institution where the trials will be conducted before the trial can begin, and each IRB must monitor the study until completion. Study subjects must provide informed consent and sign an informed consent form before participating in a clinical trial.\n\nClinical trials of drugs or biologics are normally done in three phases, although the phases may overlap or be combined. Phase 1 trials usually involve the initial introduction of the investigational candidate into humans to evaluate its short-term safety, dosage tolerance, metabolism, pharmacokinetics and pharmacologic actions, and, if possible, to gain an early indication of its effectiveness. Phase 2 trials normally involve trials in a limited patient population to evaluate dosage tolerance and appropriate dosage, identify possible adverse effects and safety risks, and evaluate preliminarily the efficacy of the candidate for specific target indications. Phase 3 trials are expanded clinical trials with larger numbers of patients which are intended to evaluate the overall benefit-risk relationship of the drug and to gather additional information for proper dosage and labeling of the drug. Phase 3 clinical trials may take several years to complete. Annual progress reports detailing the results of the clinical studies must be submitted to the FDA and IND safety reports must be submitted to the FDA and investigators within 15 calendar days for serious and unexpected adverse events, any findings from other studies, tests in laboratory animals or in vitro testing that suggest a significant risk for human subjects, or any clinically important increase in the rate of a serious suspected adverse reaction over that listed in the protocol or investigator brochure. We or our collaborators, the FDA, or an IRB (with respect to a particular study site) may suspend or terminate clinical trials at any time on various grounds, including a finding that the subjects or patients are being exposed to an unacceptable health risk.\n\nPost-approval trials, sometimes referred to as Phase 4 clinical trials, may be conducted after receiving initial marketing approval. These trials are used to gain additional experience from the treatment of patients in the intended therapeutic indication and are commonly intended to generate additional safety data regarding use of the product in a clinical setting. In certain instances, the FDA may mandate the performance of Phase 4 clinical trials as a condition of approval of the product or, in certain circumstances, post-approval.\n\nThe FDA has various programs, including fast track designation, breakthrough therapy designation, priority review, accelerated approval, and, for regenerative medicine therapies, regenerative medicine advanced therapy designation, which are intended to expedite or simplify the process for the development, and FDA’s review, of drugs and biologics (e.g., granting approval on the basis of surrogate endpoints subject to post-approval trials). Generally, drugs or biologics that may be eligible for one or more of these programs are those intended to treat serious or life-threatening diseases or conditions, those with the potential to address unmet medical needs for those disease or conditions, and/or those that provide a meaningful benefit over existing treatments. Moreover, if a sponsor submits a marketing application for a product intended to treat certain rare pediatric or tropical diseases or for use as a medical countermeasure for a material threat, and that meets other eligibility criteria, upon approval such sponsor may be granted a priority review voucher that can be used for a subsequent application. Even if a product qualifies for one or more of these programs, the FDA may later decide that the product no longer meets the conditions for qualification or decide that the time period for FDA review or approval will not be shortened. Furthermore, these programs do not change the standards for approval and may not ultimately expedite the development or approval process.\n\nIf clinical trials of a product candidate are completed successfully, the sponsor of the product may seek FDA marketing approval. If the product is classified as a new drug, an applicant must file a New Drug Application (NDA). For biological products, an applicant must file a Biologics License Application (BLA). In each case, FDA must approve the application before the product can be marketed commercially. NDAs and BLAs must include, among other things, detailed information about the product’s chemistry, manufacture, controls, and proposed labeling and the results of pre-clinical studies and clinical trials. To support marketing approval, the data submitted must be sufficient in quality and quantity to establish the safety and efficacy of a drug, and safety, purity, and potency of a biologic, to the satisfaction of the FDA. A user fee must be paid with the submission of an NDA or BLA (unless a fee waiver applies) in order to support the cost of agency review, which is currently almost US$3 million. FDA usually will inspect the facility or the facilities at which the drug is manufactured and will not approve the product unless the manufacturing and production and testing\n\n50\n\n[Table of Contents](#TOC)\n\nfacilities are in compliance with cGMP regulations. In addition, FDA may also inspect clinical trial sites that generated data for the NDA or BLA as well as us or our collaborators as a clinical trial sponsor.\n\nThe testing and approval processes require substantial time and effort, and there can be no assurance that FDA will accept the application for filing or that any approval will be obtained on a timely basis, if at all. Under the goals and policies agreed to by the FDA under the Prescription Drug User Fee Act, the FDA has ten months from the 60 day filing date in which to complete its initial review of a standard application and respond to the applicant. However, the time required by the FDA to review and approve NDAs and BLAs is variable and, to a large extent, beyond our control. Notwithstanding the submission of relevant data, the FDA may ultimately decide that an NDA or BLA does not satisfy its regulatory criteria and deny the approval. In such instance, FDA will issue a Complete Response Letter, describing all the deficiencies that the FDA has identified in an application that must be satisfactorily addressed before it can be approved. A Complete Response Letter may require additional clinical data and/or an additional pivotal Phase 3 clinical trial(s), and/or other significant, expensive and time-consuming requirements related to clinical trials, pre-clinical studies or manufacturing. Further, even if such additional information is submitted, the FDA may ultimately decide that the application does not satisfy the criteria for approval. The FDA may also refer the application to an appropriate advisory committee, typically a panel of clinicians, for review, evaluation and a recommendation as to whether the application should be approved. The FDA is not bound by the recommendations of the advisory committee, but the Agency historically has tended to follow such recommendations. In addition, the FDA may condition marketing approval on the conduct of specific post-marketing studies to further evaluate safety and effectiveness or a REMS that may include both special labeling and controls, known as Elements to Assure Safe Use, on the distribution, prescribing, dispensing and use of a drug product. After approval is obtained, a marketed product is subject to continuing regulatory requirements and review relating to cGMP, adverse event reporting, promotion and advertising, and other matters. The FDA strictly regulates labeling, advertising, promotion and other types of information on products that are placed on the market. Products may be promoted only for the approved indications and consistent with the provisions of the approved label. Discovery of previously unknown problems or failure to comply with the applicable regulatory requirements may result in restrictions on the marketing of a product, mandated labeling changes, or withdrawal of the product from the market, as well as possible civil or criminal sanctions.\n\nDrugs and biological products may be eligible to receive certain regulatory exclusivities upon approval. For example, a drug that constitutes a new chemical entity (i.e., an active moiety that has not been previously approved in another NDA) is entitled to five years of exclusivity during which FDA may not accept an ANDA or 505(b)(2) NDA for filing referencing such chemical entity, unless a “Paragraph IV certification” is made in which case FDA may accept such applications four years after initial approval of the new chemical entity. In addition, three years of exclusivity can be awarded for applications (including supplements) containing the results of new clinical investigations (other than bioavailability studies) conducted by the applicant and essential to the FDA’s approval of new versions or conditions of use of previously approved drug products, such as new indications, delivery mechanisms, dosage forms, strengths, or other conditions of use. A reference biological product is granted twelve years of data exclusivity from the time of first licensure of the product, and the FDA will not accept an application for a biosimilar or interchangeable product based on the reference biological product until four years after the date of first licensure of the reference product. Moreover, a drug or biologic may receive orphan drug designation if intended to treat a rare disease or condition, which is generally a disease or condition that affects fewer than 200,000 individuals in the United States, or more than 200,000 individuals in the United States and for which there is no reasonable expectation that the cost of developing and making the product available in the United States for this type of disease or condition will be recovered from sales of the product in the United States. If a product that has orphan designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to orphan drug exclusivity, which restricts FDA from approving any other applications to market the same drug for the same indication for seven years from the date of such approval, except in limited circumstances, such as a showing of clinical superiority to the product with orphan exclusivity by means of greater effectiveness, greater safety, by providing a major contribution to patient care, or in instances of an inability to assure drug supply.\n\nFDA may approve generic drugs and biological products through abbreviated pathways. Generic drugs may be marketed upon approval of an ANDA, which contains information to show that the proposed product is identical in active ingredient, dosage form, strength, route of administration, labeling, quality, performance characteristics, and intended use, among other things, to a previously approved drug. Approval is generally supported by data from bioequivalence studies, rather than complete pre-clinical and clinical studies. Biological products that are biosimilar to or interchangeable with an FDA-licensed reference biological product are eligible for an abbreviated approval pathway. Although licensure of biosimilar or interchangeable products is generally expected to require less than the full complement of product-specific pre-clinical and clinical data required for reference products, the FDA has considerable discretion over the kind and amount of scientific evidence required to demonstrate biosimilarity and interchangeability. Under section 610 of the Further Consolidated Appropriations Act, 2020, entitled “Actions for Delays of Generic Drugs and Biological Products”,\n\n51\n\n[Table of Contents](#TOC)\n\ngeneric drug and biosimilar developers may sue brand manufacturers, or generic or biosimilar manufacturers, to obtain sufficient quantities of reference product necessary for approval of the developers’ generic or biosimilar product. If a generic drug or biosimilar developer is successful in its suit, the defendant manufacturer would be required to provide sufficient quantities of product on commercially-reasonable, market-based terms and may be required to pay the developer’s reasonable attorney’s fees and costs as well as financial compensation under certain circumstances. While intended to facilitate the timely entry of lower-cost generic and biosimilar products, we cannot determine what effect this new private right of action may have on the development and approval of generic drug and biosimilar products at this time.\n\nThe Generic Drug Enforcement Act of 1992 establishes penalties for wrongdoing in connection with the development or submission of an application. In general, the FDA is authorized to temporarily or permanently bar companies and individuals, from submitting or assisting in the submission of applications to FDA, and to temporarily deny approval and suspend applications to market drugs under certain circumstances. FDA’s debarment authority has also been expanded to apply to certain import-related offenses. In addition to debarment, the FDA has numerous enforcement and disciplinary powers, including the authority to withdraw approval of an application or to approve an application under certain circumstances, to suspend the distribution of all drugs approved or developed in connection with certain wrongful conduct, and various civil and criminal penalties. The FDA may also withdraw product approval or take other corrective measures if, among other things, ongoing regulatory requirements are not met or if safety or efficacy questions are raised after the product reaches the market.\n\nManufacturers and other entities involved in the manufacturing and distribution of approved products are required to register their establishments with the FDA and certain state agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMP and other laws. The cGMP requirements apply to all stages of the manufacturing process, including the production, processing, sterilization, packaging, labeling, storage and shipment of the product. Manufacturers must establish validated systems to ensure that products meet specifications and regulatory requirements, and test each product batch or lot prior to its release. We rely, and expect to continue to rely, on third parties for the production of clinical quantities of our product candidates and any future product candidates we may develop. Future FDA and state inspections may identify compliance issues at the facilities of our contract manufacturers that may disrupt production or distribution or may require substantial resources to correct.\n\n*Healthcare Regulation*\n\nFederal and state healthcare laws in the United States, including fraud and abuse and health information privacy and security laws, also apply to our business. If we fail to comply with those laws, we could face substantial penalties and our business, results of operations, financial condition and prospects could be adversely affected. The laws that may affect our ability to operate include, but are not limited to: the federal Anti-Kickback Statute, which prohibits, among other things, soliciting, receiving, offering or paying remuneration, directly or indirectly, to induce, or in return for, the purchase or recommendation of an item or service reimbursable under a federal healthcare program, such as the Medicare and Medicaid programs; and federal civil and criminal false claims laws and civil monetary penalty laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other third-party payers that are false or fraudulent. Additionally, we are subject to state law equivalents of each of the above federal laws, which may be broader in scope and apply regardless of whether the payer is a federal healthcare program, and many of which differ from each other in significant ways and may not have the same effect, further complicate compliance efforts.\n\nNumerous federal and state laws, including state security breach notification laws, state health information privacy laws and federal and state consumer protection laws, govern the collection, use and disclosure of personal information. Other countries also have, or are developing, laws governing the collection, use and transmission of personal information. In addition, most healthcare providers who are expected to prescribe our products and from whom we obtain patient health information, are subject to privacy and security requirements under the Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology and Clinical Health Act (HIPAA). Although we are not directly subject to HIPAA, we could be subject to criminal penalties if we obtain and/or disclose individually identifiable health information from a HIPAA-covered entity, including healthcare providers, in a manner that is not authorized or permitted by HIPAA. The legislative and regulatory landscape for privacy and data protection continues to evolve, and there has been an increasing amount of focus on privacy and data protection issues with the potential to affect our business, including recently enacted laws in a majority of states requiring security breach notification. These laws could create liability for us or increase our cost of doing business.\n\n52\n\n[Table of Contents](#TOC)\n\nIn addition, the Patient Protection and Affordable Care Act, as amended by the Health Care Education Reconciliation Act (PPACA), created a federal requirement under the federal Open Payments program, that requires certain manufacturers to track and report to the Centers for Medicare and Medicaid Services, or CMS, annually certain payments and other transfers of value provided to physicians and teaching hospitals made in the previous calendar year. In addition, there are also an increasing number of state laws that require manufacturers to make reports to states on pricing and marketing information. These laws may affect our sales, marketing, and other promotional activities by imposing administrative and compliance burdens on us. In addition, given the lack of clarity with respect to these laws and their implementation, our reporting actions could be subject to the penalty provisions of the pertinent state and federal authorities.\n\nFor those marketed products which are covered in the United States by certain government healthcare programs (e.g., Medicare and Medicaid), we have various obligations, including government price reporting and rebate requirements, which generally require products be offered at substantial rebates/discounts to Medicaid and certain purchasers (including “covered entities” purchasing under the 340B Drug Discount Program). We are also required to discount such products to authorized users of the Federal Supply Schedule of the General Services Administration, under which additional laws and requirements apply. These programs require submission of pricing data and calculation of discounts and rebates pursuant to complex statutory formulas, as well as the entry into government procurement contracts governed by the Federal Acquisition Regulations, and the guidance governing such calculations is not always clear. Compliance with such requirements can require significant investment in personnel, systems and resources, but failure to properly calculate prices, or offer required discounts or rebates could subject us to substantial penalties.\n\nNational Medical Products Administration (NMPA, formerly the China Food and Drug Administration)\n\nIn the PRC, the NMPA is the authority under the State Administration for Market Regulation (SAMR) that monitors and supervises the administration of pharmaceuticals products, medical appliances and equipment, and cosmetics. We are also subject to regulation and oversight by different levels of the Medical Products Administration and Administration of Market Regulation in China. For clinical-stage product candidates, our development activities in China can follow two purposes: (1) to obtain clinical data to support our global FDA-regulated trials as is the case for our proprietary investigational product like CID-103, and (2) to obtain clinical data to support local registration with the NMPA. For late-stage product candidates that we in-license for greater China rights, such as EVOMELA®, which has been launched, CID-103, BI-1206 and CB-5339, our development activities in China are to secure clinical trial notification, and marketing approval from the Center of Drug Evaluation (CDE) under the NMPA by conducting import drug registration. The “Law of the PRC on the Administration of Pharmaceuticals,” as last amended on August 26, 2019 and effective as of December 1, 2019, provides the basic legal framework for the administration of the production and sale of pharmaceuticals in China and covers the manufacturing, distributing, packaging, pricing and advertising of pharmaceutical products in China.\n\nWe are also subject to other PRC laws and regulations that are applicable to pharmaceutical manufacturers and distributors in general such as “Drug Registration Regulation (DRR)”, which was updated on January 22, 2020 and became effective on July 1, 2020.\n\n*The Marketing Authorization Holder System*\n\nPursuant to the amended Law of the PRC on the Administration of Pharmaceuticals, the Marketing Authorization Holder System, previously implemented in a few pilot regions in China, is now implemented nationwide. Companies and research and development institutions can be drug marketing authorization holders after they receive drug approvals. The drug marketing authorization holder are responsible for their products throughout the life cycle, including nonclinical studies, clinical trials, production and distribution, post-market studies, and the monitoring, reporting, and handling of adverse reactions in connection with pharmaceuticals in accordance with the amended law.\n\nThe marketing authorization holders may engage contract manufacturers for manufacturing, provided that the contract manufacturers are licensed pharmaceutical manufacturers, and may engage pharmaceutical distribution enterprises with a valid drug distribution license to sell their products. Upon receiving the marketing authorizations from the NMPA, a drug marketing authorization holder may transfer its drug marketing authorization and the transferee should have the capability of quality management, risk prevention and control, and liability compensation to ensure the safety, effectiveness and quality controllability of drugs, and fulfill the obligations of the drug marketing authorization holder.\n\n*Product Manufacturing*\n\n53\n\n[Table of Contents](#TOC)\n\nFor the registration of locally manufactured drugs, the drug products need to be manufactured in China through either a self-owned facility or a contract manufacturing organization. The study drug to be used for clinical trials must be manufactured in compliance with NMPA Good Manufacturing Practice (GMP) guidelines. A domestic manufacturer of pharmaceutical products and active pharmaceutical ingredient (API) must obtain the drug manufacturing license to produce pharmaceutical products and API for marketing in China. Pursuant to the newly amended Law of the PRC on the Administration of Pharmaceuticals, the GMP certification has been cancelled, but with its cancellation, drug manufacturing enterprises are still required to strictly comply with GMP requirements. GMP requirements include institution and staff qualifications, production premises and facilities, equipment, raw materials, hygiene conditions, production management, quality controls, product distributions, maintenance of records and manner of handling customer complaints and adverse reaction reports. The drug manufacturing license is valid for five years, and must be renewed at least six months before its expiration date.\n\nIn addition, before commencing business, a pharmaceutical manufacturer must also obtain a business license from the Administration of Market Regulation at the local level.\n\n*Pre-clinical Research and Clinical Trials*\n\nFor an investigational new drug application, a clinical trial approval issued from CDE was historically required to conduct clinical trials. However, since July 24, 2018, the NMPA announced to adopt a negative notification system for clinical trial approvals. In particular, if the applicant does not receive negative comments within 60 days after the CDE accepts the clinical trial application, the applicant can proceed with the clinical trial immediately based on the protocol submitted without waiting to receive an explicit clinical trial approval. Chemical generics, on the other hand, only need to undergo bioequivalent studies upon a filing for record with the NMPA. In order to apply for a clinical trial application approval to support local registration in China, a pharmaceutical company is required to conduct a series of pre-clinical research including research on chemistry, pharmacology, toxicology and pharmacokinetics of pharmaceuticals.\n\nThis pre-clinical research should be conducted in compliance with the relevant regulatory guidelines issued by the NMPA. In particular, safety evaluation research must be conducted in compliance with China’s Good Laboratory Practice (GLP). To further clarify the GLP certification requirement, the NMPA issued the Administrative Measures for the Certification of Good Laboratory Practices for Non-clinical Laboratory Studies (《药物非临床研究质量管理规范认证管理办法》) on January 19, 2023, which took effect on July 1, 2023, and pursuant to such Administration Measures, the institutions intending to carry out non-clinical safety evaluation studies in China for the purpose of drug registration applications are required to apply for the certification of GLP. The GLP certificate is valid for 5 years. Any entity without such certification must engage a qualified third party to conduct non-clinical studies.\n\nAfter completion of pre-clinical studies and obtaining permission to conduct the clinical trial from the NMPA, clinical trials are generally conducted in three sequential phases that may overlap or be combined, known as Phase 1, Phase 2, and Phase 3 clinical trials, and Phase 4 clinical trials may be conducted at the post-marketing surveillance stage, in compliance with China’s Good Clinical Practice (GCP):\n\n*Phase 1* – preliminary trial of clinical pharmacology and human safety evaluation studies. The primary objective is to observe the pharmacokinetics and the tolerance level of the human body to the new medicine as a basis for ascertaining the appropriate methods of dosage.\n\n*Phase 2* – preliminary exploration on the therapeutic efficacy. The purpose is to assess preliminarily the efficacy and safety of pharmaceutical products on patients with the target indication of the pharmaceutical products and to provide the basis for the design and dosage tests for Phase 3. The dosing and methodology of research in this phase generally adopts double-blind, random methods with limited sample sizes.\n\n*Phase 3* – confirm the therapeutic efficacy. The objective is to further verify the efficacy and safety of pharmaceutical products on patients within the target indication, to evaluate the benefits and risks and finally to provide sufficient experimentally proven evidence to support the registration application of the pharmaceutical products. In general, the trial should adopt double-blind random methods with sufficient sample sizes.\n\n*Phase 4* –assess therapeutic efficacy and adverse reactions post-approval. The purpose is, by conducting a new drug’s post-marketing study, to assess therapeutic efficacy and adverse reactions when the drug is widely used, to evaluate overall\n\n54\n\n[Table of Contents](#TOC)\n\nbenefit-risk relationships of the drug when used among the general population or specific groups and to adjust the administration dose, among others.\n\nIn April 2020, the NMPA and the National Health Commission (NHC) released the amended GCP, which took effect on July 1, 2020. The amended GCP is harmonized with the ICH-GCP. Compared to the previous GCP, the amended GCP provides comprehensive and substantive requirements on the design and conduct of clinical trials in China. In particular, the amended GCP enhances the protection for study subjects and tightens the control over bio-samples collected under clinical trials.\n\n*Collecting and Using Patients’ Biospecimens and Derived Data*\n\nForeign-invested sponsors that collect and use patients’ biospecimens in clinical trials are required to file with the HGR Agency, under the National Health Commission, or the NHC.\n\nIn 2017, the Ministry of Science and Technology, or the MOST issued the Circular on Optimizing the Administrative Examination and Approval of Human Genetic Resources, which simplified the approval for collecting and using human genetic resources for the purpose of commercializing a drug or medical device in the PRC. In June 2019, the State Council of the PRC issued the Regulation on the Administration of PRC Human Genetic Resources (effective as of July 1, 2019), which formalized the approval requirements pertinent to research collaborations between Chinese and foreign-owned entities. This regulation was revised in March 2024, transferring primary regulatory authority from MOST to the NHC.\n\nPursuant to this new HGR Regulation, a new notification system (as opposed to the advance approval approach originally in place) was put in place for clinical trials using PRC patients’ biospecimens and data at clinical study sites without involving the export of such specimens outside of China. The notification filing must specify the type, quantity, volume size and usage of the biospecimens, among others, with the HGR Agency is required before conducting such clinical trials. The collection and use of PRC patients’ biospecimens and data in international basic research collaboration are still subject to the approval of the HGR Agency. The notification filing with the HGR Agency also applies to access to clinical study data by foreign entities.\n\nIn October 2020, the Standing Committee of the NPC promulgated the PRC Biosecurity Law, which took effect on April 15, 2021, and was amended on April 26, 2024. The PRC Biosecurity Law, the higher law to the HGR Regulation, reaffirms the regulatory requirements stipulated by the HGR Regulation while potentially increasing the administrative fines significantly in cases where foreign entities are alleged to have collected, preserved or exported Chinese human genetic resources.\n\nTo accommodate with the upper-level governing laws’ requirements, the MOST promulgated the Implementing Rules of the Regulation on the Administration of Human Genetic Resources (《人类遗传资源管理条例实施细则》) on May 26, 2023, which took effect on July 1, 2023. The Implementing Rules provide specific requirements on the collection, preservation, utilization and providing human genetic resources out of China.\n\n*Import Drug Registration or Multi Regional Clinical Trials*\n\nNMPA regulations allow foreign drug developers to conduct import drug registration or multi regional clinical trials in China for a new drug as part of a global drug development program. An International Multicenter Clinical Trial (IMCT) Application needs to be filed with the CDE for conducting the clinical trials.\n\nIn October, 2017, the NMPA released the Decision on Adjusting Items concerning the Administration of Imported Drug Registration, as well as current requirement in DRR, which includes the following key points:\n\n●Phase 1 IMCT is allowed to be conducted in China. The IMCT drug does not need to gain prior approval or have entered into either a Phase 2 or 3 clinical trial in a foreign country before the IMCT could be conducted in China, except for preventive biological products.\n\n●If the IMCT is conducted in China, the application for drug marketing authorization can be submitted directly after the completion of the IMCT. When submitting such application, the applicant shall comply with the requirements under the DDR and other relevant documents.\n\n55\n\n[Table of Contents](#TOC)\n\n●With respect to clinical trial and market authorization applications for imported innovative chemical drugs and therapeutic biological products, the marketing authorization in the country or region where the foreign drug manufacturer is located will not be required.\n\n●With respect to drug applications that have been accepted before the release of this Decision, importation permission can be granted if such applications request exemption of clinical trials for the imported drugs based on the data generated from IMCT and if relevant requirements under the Administrative Measures of the Drug Registration are met.\n\nThe NMPA Decision on IMCT and the application for imported new drugs has streamlined and accelerated the applications for imported new drugs.\n\nIn order to apply for an IMCT Application in China, a biopharmaceutical company is required to submit a comprehensive investigation new drug application package filed with foreign regulatory agency, i.e. the FDA in our case, in a format compliant with NMPA guidance.\n\nAfter obtaining the IMCT permit from the CDE, clinical trials should be conducted in compliance with both the FDA/ICH and NMPA Good Clinical Practice guidelines.\n\nData derived from IMCT can be used for the marketing authorization applications with the NMPA. When using IMCT data to support marketing authorization applications in China, applicants shall submit completed global clinical trial report, statistical analysis report and database, along with relevant supporting data in accordance with the ICH-CTD (International Conference on Harmonization-Common Technical Document) content and format requirements; subgroup research results summary and comparative analysis shall also be conducted concurrently.\n\n*Marketing Authorization Application*\n\nAfter completion of the first 3 phases of clinical trials demonstrating the safety and effectiveness of a pharmaceutical in its targeted indication, a Marketing Authorization Application needs to be filled with the NMPA, which includes research data of chemistry, manufacturing and controls, pre-clinical studies and clinical trial report in order to register the new drug. For imported drugs, the New Drug Registration Application is also known as the Import Drug License Application.\n\nOnce a marketing authorization is received, the product can be sold nationwide in China.\n\n*Pricing*\n\nThe government regulates prices for pharmaceuticals (except for narcotic and Type 1 psychotropic drugs) mainly by establishing a price negotiation, consolidated procurement mechanism, and revising medical insurance reimbursement standards. The Chinese government has initiated several rounds of price negotiations with manufacturers of patented drugs, drugs with an exclusive source of supply, and oncology drugs since 2016. The average percentage of price reduction has been over 50%. Once the government agreed with the drug manufacturers on the supply prices, the drugs would be automatically listed in the NRDL and qualified for public hospital purchase.\n\n*Reimbursement*\n\nMarket access in China was effectively transformed from 2016 and 2017 when the first annual negotiations were held for novel drugs to gain coverage under the NRDL. There was initially strong enthusiasm to participate from the majority of market players, with innovative drug makers willing to accept the price cuts demanded by the National Healthcare Security Administration (NHSA) in return for rapid public hospital system access at the earliest stages of a drug’s lifecycle. That enthusiasm has waned as the returns have dwindled, reflecting a combination of overly intense market competition and a natural ceiling on the government’s medical payment capabilities. Statistics shows that this year, over 52% of products eligible for NRDL inclusion decided to refrain from seeking entry.\n\nSince the inception of negotiated reimbursement under China’s Basic Medical Insurance (BMI) system, the NHSA has led 7 rounds of NRDL negotiations, with the latest held in late October 2024. During that time, a total of 835 drugs have been newly added to the NRDL. It’s clear that despite having a reputation for excessive price pressure, the NRDL continues to play a primary role in drug\n\n56\n\n[Table of Contents](#TOC)\n\ncommercialization in China, and for many remains a sought-after avenue for pharma firms with the right product. Including traditional Chinese medicines (TCMs), the NRDL now covers 3,159 products following the 2024 updates, including 1,765 western medicines.\n\nThe NHSA’s NRDL negotiations are focused purely on payment capability at present. Despite being the national payor, the NHSA and the BMI system simply cannot cover the demands of all parties involved. The national government has long advocated for a diversified response to China’s healthcare needs, with the hope that development of the commercial insurance sector can provide support alongside the public system. The private sector contribution has certainly been expanding. According to the NHSA, in 2022, premiums generated in the commercial health insurance sector reached RMB 865.3 billion, while insurers paid out RMB 360 billion in compensation. Chinese citizens have also accumulated ‘life insurance’ product savings of over RMB 1.6 trillion, a form of private pension product that will reduces financial worries, unleashing consumption potential, and promoting economic development. A total of 21 private insurance companies are also involved in supporting the urban and rural major illness insurance schemes, providing reimbursement to over 70 million people in the last ten years.\n\n*Hospital Listing*\n\nGovernment hospitals currently represent over 90% of the pharmaceutical market in China. In order for a new drug to be prescribed at a government hospital, it has to be listed in the hospital formulary. The process of entering into the formulary is commonly referred to as “hospital listing”, and typically requires a long lead time. These decisions are made on a hospital-by-hospital basis with timing that can range from every six months to every five years. Some hospitals also have temporary listing procedures that can accelerate timing. Private hospital and non-hospital pharmacies, which represent less than 10% of the drug market in China, do not require a formulary process to sell a drug.\n\n*Centralized Procurement and Tenders*\n\nProvincial and municipal government agencies will establish a provincial drug procurement agency to operate a mandatory collective tender process for purchases by government hospitals of a medicine included in provincial or local medicine procurement catalogs. The provincial or local medicine procurement catalogs are determined by the provincial drug procurement agency based on the National Essential Drugs List, the NRDL, local hospital formularies, etc. If a new drug has been included in a government hospital formulary, the NRDL or the provincial reimbursement drug list, the relevant hospitals must participate in collective tender processes for the purchase of such new drug. The centralized tender process is in principle conducted once every year in the relevant province or city in China. During the collective tender process, the provincial drug procurement agency will establish a committee consisting of recognized pharmaceutical experts. The committee will assess the bids submitted by the various participating pharmaceutical manufacturers, taking into consideration, among other things, the quality and price of the drug product and the service and reputation of the manufacturer. Only drug products that have been selected in the collective tender processes may be purchased by participating hospitals.\n\n*“4+7” Volume-based Drug Procurement and Tenders.* In June 2018, the State Council decided to launch a new round of drug pricing and procurement reform. The reform policy aims to lower drug costs for patients, reduce transaction costs for enterprises, regulate drug use of hospitals, and improve the centralized drug procurement and pricing system. This reform is implemented mainly by the NHSA. The NHC supports the reform by introducing policy that encourages purchasing and prescribing of the selected drug. The NMPA is responsible for the quality assurance of the drugs submitted for tenders.\n\nThe national pilot scheme for centralized volume-based drug procurement and tenders under the reform was launched in November 2018. The selected drugs must pass the GQCE on quality and effectiveness.\n\nThe centralized volume-based procurement is open to all approved enterprises that manufacture drugs on the government-set procurement list in China. The NHSA organized ten rounds of volume-based procurement and tenders to this date. On December 12, 2024, the results of the tenth round of the volume-based procurement and tender were announced. All of the 62 listed products were successfully qualified to enter into a supply agreement with the group procurement organization.\n\n**Regulations on PRC Company Law******\n\nThe formation, operation and management of enterprises in the PRC are governed by the Company Law of the People’s Republic of China (《中华人民共和国公司法》) (the “Company Law”), which was promulgated by the Standing Committee of the NPC (NPCSC) on December 29, 1993, effective on July 1, 1994, and subsequently amended on December 25, 1999, August 28, 2004,\n\n57\n\n[Table of Contents](#TOC)\n\nOctober 27, 2005, December 28, 2013 and October 26, 2018, respectively. The Company Law also applies to foreign-invested companies. On December 29, 2023, the NPCSC further amended the Company Law, and this amendment mainly improves, optimizes and streamlines the provisions with respect to the company’s establishment and dissolution, corporate governance, capitalization management, and accountability of controlling shareholders and management personnel, and further promotes company’s social responsibilities. This amendment  took effective on July 1, 2024.\n\nIn accordance with the current regulatory framework governing foreign-invested enterprises in China, China adopts a pre-access national treatment plus negative list management system for foreign-investments. Pursuant to the provisions of the Law of the People’s Republic of China on Foreign Investment (《中华人民共和国外商投资法》),  the Special Administrative Measures for Access of Foreign Investment (Negative List) (2024 Edition) (《外商投资准入特别管理措施（负面清单）（2024年版）》) issued by the NDRC and the Ministry of Commerce on November 1, 2024, are required to adhere to the corresponding pre-investment approval procedures, while, foreign-investments in industries not listed in the Negative List are only required to comply with registration and filing procedures as outlined in the Measures for the Reporting of Foreign Investment Information  (《外商投资信息报告办法》), which were issued by the Ministry of Commerce and the State Administration for Market Supervision and Administration on December 30, 2019, and came into effect on January 1, 2020.\n\n**Regulations on****Overseas Listing and Offering******\n\nOn February 17, 2023, the CSRC released the Trial Administrative Measures of the Overseas Securities Offering and Listing by Domestic Companies (《境内企业境外发行证券和上市管理试行办法》) and five ancillary interpretive guidelines (collectively, the “Overseas Listing Trial Measures”), which apply to overseas offerings and listing by PRC-based companies, or domestic companies, of equity shares, depository receipts, corporate bonds convertible to equity shares, and other equity securities, and came into effect on March 31, 2023. According to the Overseas Listing Trial Measures, (1) domestic companies that seek to offer or list securities overseas, both directly and indirectly, should fulfill the filing procedure and report relevant information to the CSRC, and if a overseas-listed PRC-based issuer issues new securities in the same overseas market after the overseas offering and listing, it is also required to file with the CSRC within three business days after the completion of the issuance; if a domestic company fails to complete the filing procedure or conceals any material fact or falsifies any major content in its filing documents, such domestic company may be subject to administrative penalties, such as order to rectify, warnings, fines, and its controlling shareholders, actual controllers, the person directly in charge and other directly liable persons may also be subject to administrative penalties, such as warnings and fines; (2) if the a foreign-incorporated issuer meets both of the following conditions, its overseas offering and listing shall be determined as an indirect overseas offering and listing by a domestic company of the PRC: (i) any of the total assets, net assets, revenues or profits of the domestic operating entities of the issuer in the most recent accounting year accounts for more than 50% of the corresponding line item in the issuer’s audited consolidated financial statements for the same period; and (ii) its major operational activities are carried out in China or its main places of business are located in China, or the senior managers in charge of operation and management of the issuer are mostly Chinese citizens or are domiciled in China; and (3) where a PRC domestic company seeks to indirectly offer and list securities in an overseas market (including issuance of new securities after its overseas offering and listing), the issuer shall designate a major domestic operating entity responsible for all filing procedures with the CSRC.\n\nFurthermore, in case any of the following major events occurs after the overseas offering and listing, the issuer is also required to report the concrete information to the CSRC within three business days of the occurrence and the announcement of the relevant events: (1) change of control; (2) the foreign securities regulatory body or the relevant competent authority has taken such measures as investigation and punishment; (3) conversion of listing status or listing board; and (4) voluntary of compulsory termination of listing. Where there is any material change in the major business and operation of the issuer after overseas offering and listing, and such change does not fall within the scope of filing, the issuer shall, within three business days of the occurrence of such change, submit a special report and a legal opinion issued by a domestic law firm to the CSRC to explain the relevant situation.\n\nAs substantially all of our operations are currently based in the PRC, our future offerings and major changes shall be subject to the foregoing filing procedures under the Overseas Listing Trial Measures. We cannot assure you that we could meet such requirements, obtain such permit from the relevant government authorities, or complete such filing in a timely manner or at all. Any failure may significantly limit or completely hinder our ability to continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless. In addition, as the Overseas Listing Trial Measures was recently promulgated, there remains substantial uncertainties as to its interpretation and implementation and how it may impact our ability to raise or utilize fund and business operation.\n\n58\n\n[Table of Contents](#TOC)\n\nOn February 24, 2023, the CSRC and other relevant government authorities promulgated the Provisions on Strengthening the Confidentiality and Archives Administration of Overseas Securities Issuance and Listing by Domestic Enterprises (《关于加强境内企业境外发行证券和上市相关保密和档案管理工作的规定》) (the “Provision on Confidentiality”), which became effective on March 31, 2023. Pursuant to the Provision on Confidentiality, where a domestic enterprise provides or publicly discloses documents and materials involving state secrets and working secrets of national government authorities (the “State Confidential Information”) to the relevant securities companies, securities service institutions, overseas regulatory authorities and other entities and individuals, or provides or publicly discloses State Confidential Information through its overseas listing entity, it shall report to the competent governmental department with the examination and approval authority for approval in accordance with the law, and submit to the secrecy administration department of the same level for filing. Domestic enterprises providing accounting archives or copies thereof to entities and individuals concerned such as securities companies, securities service institutions and overseas regulatory authorities shall complete the corresponding procedures pursuant to the relevant national regulations.\n\n**Regulations on Foreign Exchange******\n\n*General Administration of Foreign Exchange*\n\nUnder the PRC Foreign Currency Administration Rules promulgated by the State Council on January 29, 1996, and last amended on August 5, 2008 and various regulations issued by the SAFE and other relevant PRC government authorities, Renminbi is convertible into other currencies for the purpose of current account items, such as trade related receipts and payments, payment of interest and dividends. The conversion of Renminbi into other currencies and remittance of the converted foreign currency outside China for the purpose of capital account items, such as direct equity investments, loans and repatriation of investment, requires the prior approval from the SAFE or its local branches. Payments for transactions that take place within China must be made in Renminbi. Unless otherwise provided by laws and regulations, PRC companies may repatriate foreign currency payments received from abroad or retain the same abroad. Foreign exchange proceeds under the current accounts may be either retained or sold to a financial institution engaging in settlement and sale of foreign exchange pursuant to relevant PRC rules and regulations. For foreign exchange proceeds under the capital accounts, approval from the SAFE is required for its retention or sale to a financial institution engaging in settlement and sale of foreign exchange, except where such approval is not required under the relevant PRC rules and regulations.\n\n*Regulations Relating to Offshore Investment*\n\nOn July 4, 2014, the SAFE promulgated the Notice of the State Administration of Foreign Exchange on Relevant Issues Concerning Foreign Exchange Administration for Domestic Residents to Engage in Overseas Investment, Financing and Round-Trip Investment via Special Purpose Vehicles, or SAFE Circular 37, which regulates the relevant matters involving foreign exchange registration for round-trip investment. Under SAFE Circular 37, a PRC resident must register with the local SAFE counterpart before contributing assets or equity interests in an offshore special purpose vehicle, that is directly established or indirectly controlled by such PRC resident for the purpose of conducting investment or financing. In addition, following the initial registration, in the event of any major change in respect of the offshore special purpose vehicle, including, among other things, a change of offshore special purpose vehicle’s PRC resident shareholder(s), the name of the offshore special purpose vehicle, terms of operation, or any increase or reduction of the offshore special purpose vehicle’s capital, share transfer or swap, and merger or division, the PRC resident shall complete the change of foreign exchange registration procedures for offshore investment with the local SAFE counterpart. According to the procedural guideline as attached to SAFE Circular 37, the principle of review has been changed to “the domestic individual resident shall only register the offshore special purpose vehicle directly established or controlled (first level).” At the same time, the SAFE has issued the Operation Guidance for the Issues Concerning Foreign Exchange Administration over Round-trip Investment with respect to the procedures for SAFE registration under SAFE Circular 37, which became effective on July 4, 2014, as an attachment to SAFE Circular 37. Under the relevant rules, failure to comply with the registration procedures set out in SAFE Circular 37 may result in restrictions being imposed on the foreign exchange activities of the relevant onshore company, including the payment of dividends and other distributions to its offshore parent or affiliate, and may also subject relevant PRC residents to penalties under PRC foreign exchange administration regulations. PRC residents who hold any shares in the company from time to time are required to register with the SAFE in connection with their investments in the company.\n\nOn February 13, 2015, the SAFE promulgated the Notice of the State Administration of Foreign Exchange on Further Simplifying and Improving Foreign Exchange Administration Policy on Direct Investment, or SAFE Notice 13, effective on June 1, 2015, which further amended SAFE Circular 37 by requiring domestic residents to register with qualified banks rather than SAFE or its\n\n59\n\n[Table of Contents](#TOC)\n\nlocal counterpart in connection with their establishment or control of an offshore entity established for the purpose of overseas investment or financing.\n\nOn March 30, 2015, SAFE promulgated the Circular of the State Administration of Foreign Exchange on Reforming the Administration Measures on Conversion of Foreign Exchange Registered Capital of Foreign-invested Enterprises, or SAFE Circular 19, effective on June 1, 2015, according to which the foreign exchange capital of foreign-invested enterprises must be subject to the Discretional Foreign Exchange Settlement, which refers to the foreign exchange capital in the capital account of a foreign-invested enterprise for which the rights and interests of monetary contribution has been confirmed by the local foreign exchange bureau (or the book-entry registration of monetary contribution by the banks) can be settled at the banks based on the actual operational needs of the foreign-invested enterprise. The proportion of Discretional Foreign Exchange Settlement of the foreign exchange capital of a foreign-invested enterprise is temporarily determined to be 100%. The Renminbi converted from the foreign exchange capital will be kept in a designated account, and if a foreign-invested enterprise needs to make further payment from such account, it still needs to provide supporting documents and go through the review process with the banks.\n\nSAFE issued the Circular of the State Administration of Foreign Exchange on Reforming and Regulating Policies on the Control over Foreign Exchange Settlement of Capital Accounts, or SAFE Circular 16, on June 9, 2016, which became effective on the same day. Pursuant to SAFE Circular 16, enterprises registered in China may also convert their foreign debts from foreign currency to Renminbi on a discretionary basis. SAFE Circular 16 provides an integrated standard for conversion of foreign exchange under capital account items (including but not limited to foreign currency capital and foreign debts) on a discretionary basis which applies to all enterprises registered in China. SAFE Circular 16 reiterates the principle that Renminbi converted from foreign currency-denominated capital of a company may not be directly or indirectly used for purposes beyond its business scope or prohibited by PRC laws or regulations, while such converted Renminbi shall not be provided as loans to its non-affiliated entities. On October 23, 2019, SAFE promulgated the Circular of the State Administration of Foreign Exchange on Further Promoting the Facilitation of Cross-Border Trade and Investment, or SAFE Circular 28, which became effective on the same day. SAFE Circular 28 allows non-investment foreign- invested enterprises to use their capital funds to make equity investments in China as long as such investments do not violate the currently effective Negative List and the target investment projects are genuine and in compliance with laws. In addition, SAFE Circular 28 stipulates that qualified enterprises in certain pilot areas may use their capital income from registered capital, foreign debt, and overseas listing for the purpose of domestic payments without providing authenticity certifications to the relevant banks in advance for those domestic payments. On September 12, 2025, SAFE issued the Circular on Matters Concerning Deepening the Reform of Foreign Exchange Management for Cross-border Investment and Financing, or 2025 Circular 43, which took effect on the same date. 2025 Circular 43 streamlines cross-border investment administration by eliminating registration requirements for preliminary expenses and domestic reinvestment, expands external debt quotas for high-tech enterprises, and optimizes capital account income usage by narrowing the negative list.\n\n**C.**\n\n**Organizational Structure**\n\nBelow set forth is an organization chart of CASI as of April 30, 2026:\n\n60\n\n[Table of Contents](#TOC)\n\n​\n\nNote: Currently CASI Hong Kong has no meaningful operations.\n\nOn May 12, 2025, the Company entered into a definitive equity and assets transfer agreement with Kaixin Pharmaceuticals Inc. (\"Kaixin Pharmaceuticals\"), a Cayman Islands incorporated entity wholly-owned by Dr. Wei-Wu He, the chairman of the board of directors and then CEO of the Company and two direct wholly-owned subsidiaries of the Company in China (the \"Target Companies\"), pursuant to which the Company shall sell and transfer, and Kaixin Pharmaceuticals shall purchase and acquire, 100% equity interests in both Target Companies (the \"Target Equity Interests\"), and all licensing rights, distribution rights, supply arrangements and related rights related to BI-1206 (in China), CID-103(in Asia excluding Japan) and Thiotepa (in China excluding Hong Kong, Macau and Taiwan) (the \"Target Pipeline Products\") for an aggregate purchase price of $20.0 million, which shall include assumption of up to $20.0 million of indebtedness of the Company (the \"Transaction\"). The closing of the Transaction shall be subject to certain customary conditions, including resolution of certain judicial freeze on the Target Equity Interests issued in connection with certain ongoing legal dispute of the Company.\n\n**D.**\n\n**Property, Plant and Equipment**\n\nAs of April 30, 2026, our principal executive offices are located in Beijing, China, consisting of approximately 890 square meters of leased office space, which serves as the center of our commercial as well as general administration functions. CASI Wuxi leased a workshop and office space of approximately 10,000 square meters. In May 2025, CASI Wuxi was approved by CDE to manufacture generic products and its cGMP injectable products manufacturing line was put to use. The productive capacity of the manufacturing line is 100,000 vials a year and our current utilization is approximately 30%. The lessors of offices in Beijing and Wuxi are independent third parties, and we plan to renew these leases from time to time as needed. We also use certain office facilities of Human Longevity Inc. (“HLI”) in South San Francisco, California, for US’s business development and general administration functions. Dr. Wei-Wu He, one of the Company’s board of directors, is also the Executive Chairman of HLI. We believe that our facilities are adequate for our current needs and, should we need additional space, we believe we will be able to obtain additional space on commercially reasonable terms."}