{"url_path":"/sec/okyo/10-k/2026/item-3","section_key":"item-3","section_title":"Item 3 KEY INFORMATION**","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-07-20","source_url":"https://www.sec.gov/Archives/edgar/data/1849296/0001493152-26-033847-index.html","accession_number":"0001493152-26-033847","cik":"0001849296","ticker":"OKYO","issuer_name":"OKYO Pharma Ltd","edgar_url":"https://www.sec.gov/Archives/edgar/data/1849296/0001493152-26-033847-index.html","primary_entity_key":"0001849296","primary_entity_name":"OKYO Pharma Ltd"},"word_count":23741,"has_tables":true,"body_markdown":"**ITEM\n3: KEY INFORMATION**\n\n \n\n**A.\nSelected Financial Data**\n\n \n\nSee Item 5. “Operating\nand Financial Review”—\n\n \n\n**B.\nCapitalization and Indebtedness**\n\n \n\nNot\napplicable.\n\n \n\n**C.\nReasons for the Offer and Use of Proceeds**\n\n \n\nNot\napplicable.\n\n \n\n1\n\n \n\n \n\n**D.\nRisk Factors**\n\n \n\n*Our\nbusiness has significant risks. You should consider carefully the risks described below, together with the other information contained\nin this Annual Report, including our financial statements and the related notes. If any of the following risks occur, our business, financial\ncondition, results of operations and future growth prospects could be materially and adversely affected. Our results could materially\ndiffer from those anticipated in these forward-looking statements, as a result of certain factors including the risks described below\nand elsewhere in this Annual Report and our other SEC filings. See “Cautionary Statement Regarding Forward-Looking Statements”\nabove.*\n\n \n\n**Risks\nRelating to Our Business**\n\n \n\n**Our\nproduct candidates are in the early to mid stages of development and it may be some years until we generate revenue, if at\nall.**\n\n \n\nOur\nproduct candidates urcosimod (formally known as OK-101) is in the mid stage and OK-201, is in the early stage of development. Our ability to generate product revenue, which is not expected to occur for several years, if ever, will depend heavily on\nthe successful development of the product candidates, many stages of clinical trials, regulatory approval and eventual\ncommercialization. We currently generate no revenue from sales of any product and may never be able to develop or commercialize a\nmarketable product.\n\n \n\n**There\nis a high degree of failure for product candidates as they progress through clinical trials and clinical trial data may be interpreted\nin varying ways which may delay, limit or prevent future regulatory approvals.**\n\n \n\nMany\ncompanies in the life sciences and biotechnology sector have made significant initial progress only to suffer significant setbacks in\nlater stage clinical trials and there is a high failure rate for product candidates as they proceed through clinical trials. Data obtained\nfrom pre-clinical and clinical activities is subject to varying interpretations which may delay, limit or prevent applications for regulatory\napprovals.\n\n \n\n**The\ndevelopment of pharmaceutical products carries significant risk of failure in early and late stage development programs.**\n\n \n\nThe\ndevelopment of pharmaceutical products is inherently uncertain, even in late-stage product development programs. There is a high failure\nrate in the development of pharmaceutical products and there is a substantial risk of adverse, undesirable, unintended or inconclusive\nresults from testing or pre-clinical or clinical trials, which may substantially delay, or halt entirely, or make uneconomic, any further\ndevelopment of our products and may prevent or limit the commercial use of such products.\n\n \n\nWhile\nthe pre-clinical development of urcosimod and initial studies in animal models and humans have been encouraging, the scope of these studies\nis limited, and significant risks exist that urcosimod may never progress to a commercially viable product. Laboratory studies in animal\nmodels carry the risk that similar results may not be seen or reproduced in future tests and trials, and there can be no guarantee that\na successful test in a mouse or other animal model will be capable of being reproduced in a human clinical trial. Small scale trials\nand the results thereof, can be misleading as to efficacy, safety and other findings, as the outcome may be influenced by laboratory\nor demographic factors and not due to the chemistry or biological effect of the drug candidate being evaluated. Larger scale trials often\nfail to produce the same positive results seen in small scale trials for a variety of reasons and clinical trials in humans frequently\nfail to reproduce efficacy seen in animal trials in the laboratory. Failure can often result after significant sums have been expended\non research and often where initial trial results (both in animals and in humans) have shown very encouraging results.\n\n \n\n2\n\n \n\n \n\nManagement\nintends to continue to conduct laboratory and pre-clinical trials to establish safety and efficacy of our products. Due to the inherent\nrisks involved in developing pharmaceutical products, there is a risk that some or all of our products will not ultimately be successfully\ndeveloped or launched. In addition, our clinical trials may fail to show the desired safety and efficacy. Successful completion of one\nstage of development of a pharmaceutical product does not ensure that subsequent stages of development will be successful. Our inability\nto market any of our products currently under development would adversely affect our business and financial condition.\n\n \n\nAny\ncommercial development of urcosimod is highly dependent on a number of factors, including:\n\n \n\n \n●\nthe\nsuccessful conduct of further human trials in the initial indications of neuropathic corneal pain (NCP) and other Corneal and Anterior\nSegment Diseases;\n\n \n \n \n\n \n●\nreceipt\nof marketing approvals for urcosimod in the United States and other jurisdictions where separate approval is required and where we\nsubsequently choose to market urcosimod;\n\n \n \n \n\n \n●\nlaunching\ncommercial sales of urcosimod, if and when approved;\n\n \n \n \n\n \n●\nacceptance\nof urcosimod by patients, the medical community and third-party payers;\n\n \n \n \n\n \n●\nUrcosimod\ncompeting effectively with existing therapies and in particular with established products addressing the same clinical needs;\n\n \n \n \n\n \n●\nUrcosimod\ninfluencing the treatment guidelines in relevant territories; and\n\n \n \n \n\n \n●\nfurther\nclinical trials to provide additional data to support commercialization of urcosimod and to permit wider label claims.\n\n \n\nIf\nany of these milestones are not met, our business, financial condition, prospects and results of operations could be materially adversely\naffected.\n\n \n\n**Risks\nRelated to Our Financial Position and Need for Capital.**\n\n \n\n**We\nwill need to raise substantial additional capital to develop and commercialize our product candidates and our failure to obtain funding\nwhen needed may force us to delay, reduce or eliminate our product development programs or collaboration efforts.**\n\n \n\nAs\nof March 31, 2026, our cash and cash equivalents, plus cash classified as a short term investment balance was approximately $20.6 million and our working capital surplus was approximately\n$12.3 million. Due to our recurring losses from operations and the expectation that we will continue to incur losses in the future, we\nwill be required to raise additional capital to complete the development and commercialization of our current product candidates. We\nhave historically relied upon private and public sales of our equity, as well as debt financings to fund our operations. In order to\nraise additional capital, we may seek to sell additional equity and/or debt securities or obtain a credit facility or other loan, which\nwe may not be able to do on favorable terms, or at all. Our ability to obtain additional financing will be subject to a number of factors,\nincluding market conditions, our operating performance and investor sentiment. If we are unable to raise additional capital when required\nor on acceptable terms, we may have to significantly delay, scale back or discontinue the development and/or commercialization of our\nproduct candidate, restrict our operations or obtain funds by entering into agreements on unfavorable terms. Failure to obtain additional\ncapital at acceptable terms would result in a material and adverse impact on our operations.\n\n \n\n3\n\n \n\n \n\n**We\nanticipate that we will continue to incur significant losses for the foreseeable future.**\n\n \n\nThe\namount of our future net losses will depend, in part, on the rate of our future expenditures, including further research and development\nactivity. The amount of net losses will also depend on our success in developing and commercializing urcosimod and other products that\nmay generate significant revenue. Any failure by us to become and remain profitable could depress the value of our ordinary shares and\ncould impair our ability to expand our business, maintain our research and development efforts, diversify our product offerings or continue\nour operations.\n\n \n\n**We\nwill need to spend extensively on further research activities and there can be no guarantee that we will have access to sufficient funds\nto fully realize our research and development plan or to commercialize any products derived from research activities.**\n\n \n\nWe\nexpect to incur further significant expenses in connection with our ongoing research and development activities in relation to our products,\nincluding funding future clinical studies, registration, manufacturing, marketing, sales and distribution. In order to finance fully\nour strategy, we may require more capital than is available from our existing cash balances.\n\n \n\nAccess\nto adequate additional financing, whether through debt financing, an equity capital raise or a suitable partnering transaction may not\nbe available to us on acceptable terms, or at all. If we are unable to raise capital, we could be forced to delay, reduce or eliminate\nour research and development programs or commercialization efforts. Any additional equity fundraising may be dilutive for our shareholders.\n\n \n\nAny\nof these events could have a material adverse effect on our business financial condition, prospects and results of operation and may\nlead us to delay, reduce or abandon research and development programs or commercialization of some of our products.\n\n \n\n**Risks\nRelated to Commercialization of Our Product Candidates**\n\n \n\n**Even\nif we successfully develop a product which shows efficacy in human subjects there remain high barriers to commercial success**\n\n \n\nEven\nif we were to receive regulatory approval for urcosimod or any other products, we may be unable to commercialize them.\n\n \n\nThere\nare a number of factors that may inhibit our efforts to commercialize urcosimod or any other products on our own, including:\n\n \n\n \n●\nour\ninability to recruit, train and retain adequate numbers of effective sales and marketing personnel;\n\n \n \n \n\n \n●\nthe\ninability of sales personnel to obtain access to or persuade adequate numbers of potential practitioners to prescribe any future\nproducts;\n\n \n \n \n\n \n●\nunforeseen\ncosts and expenses associated with creating an independent sales and marketing organization;\n\n \n \n \n\n \n●\ncosts\nof marketing and promotion above those anticipated by us; and\n\n \n \n \n\n \n●\nthe\ninability to secure a suitable level of pricing and/or reimbursement approval from the relevant regulatory authorities in the countries\nwe are targeting.\n\n \n\nWhile\nwe may only seek to enter into arrangements with third parties to perform sales and marketing services in non-core territories, any such\narrangements could result in our product revenues (or the profitability of such product revenues) being lower than if we were to market\nand sell the products itself. In addition, we may not be successful in entering into arrangements with third parties to sell and market\nour products or may be unable to do so on terms that are favorable to us. Acceptable third parties may fail to devote the necessary resources\nand attention to sell and market our products effectively. If we do not establish sales and marketing capabilities successfully, either\non our own or in collaboration with third parties, we will not be successful in commercializing our products, which in turn would have\na material adverse effect on our business, prospects, financial condition and results of operations.\n\n \n\n4\n\n \n\n \n\nWe\nhave also invested and will continue to invest resources into the development of other products, such as OK-201. Even where these products\nare successfully developed and marketing approval is secured from relevant regulatory authorities, these products might not achieve commercial\nsuccess. Factors which could limit commercial success of a product include but are not limited to:\n\n \n\n \n●\nlimited\nmarket acceptance or a lack of recognition of the unmet medical need for the product amongst prescribers;\n\n \n \n \n\n \n●\nnew\ncompetitor products entering the market;\n\n \n \n \n\n \n●\nthe\nnumber and relative efficacy, safety or cost of competitive products;\n\n \n \n \n\n \n●\nan\ninability to supply a sufficient amount of the product to meet market demand;\n\n \n \n \n\n \n●\ninsufficient\nfunding being available to market the product adequately;\n\n \n \n \n\n \n●\nan\ninability to enforce intellectual property rights, or the existence of third-party intellectual property rights;\n\n \n \n \n\n \n●\nsafety\nconcerns arising pre- or post-launch resulting in negative publicity or product withdrawal or narrowing of the product label and\nthe group of persons who may receive the product;\n\n \n \n \n\n \n●\nlabelling\nbeing restricted/narrowed in the future by regulatory agencies; and\n\n \n \n \n\n \n●\nrefusals\nby government or other healthcare payors to fund the purchase of the products by healthcare providers at a commercially viable level\n(or at all) or otherwise to restrict the availability of approved products on other grounds.\n\n \n\nIf\nany of the foregoing were to occur, it could materially and adversely affect our business, financial condition, prospects and results\nof operations.\n\n \n\n**We\nface significant competition from pharmaceutical companies. We have competitors internationally, including major multinational\npharmaceutical companies, universities and research institutions. There are a number of established companies engaged in the\ndevelopment and marketing of preparations addressing the markets which we are targeting. In addition, there are a wide range of\nproducts addressing Ocular surface disease market currently approved and marketed by a\nnumber of large and small pharmaceutical companies**\n\n \n\nMany\nof our competitors have substantially greater financial, technical and other resources, such as larger research and development teams,\nproven marketing and manufacturing organizations and well-established sales forces. Our competitors may succeed in developing, acquiring\nor licensing drug products that are more effective or less costly than products which we are currently developing or which we may develop.\n\n \n\nEstablished\npharmaceutical companies may invest heavily to accelerate the discovery and development of products that could make our products less\ncompetitive. In addition, any new product that competes with an approved product must demonstrate compelling advantages in efficacy,\nconvenience, tolerability or safety in order to overcome price competition and to be commercially successful. Accordingly, our competitors\nmay succeed in obtaining patent protection, receiving approval from the FDA, the European Medicines Agency, or MHRA, or that of another\nrelevant regulatory authority or discovering, developing and commercializing pharmaceutical products before we do, which would have a\nmaterial adverse effect on our business.\n\n \n\nThe\navailability and price of our competitors’ products could limit the demand, and the price we are able to charge, for any of our\nproducts, if approved for sale. We will not achieve our business plan if acceptance is inhibited by price competition or the reluctance\nof physicians to switch from existing drug products to our products, or if physicians switch to other new drug products or choose to\nreserve our products for use in limited circumstances. Competition from lower-cost generic pharmaceuticals may also result in significant\nreductions in sales volumes or prices for our products, which could materially adversely affect our business, prospects, financial condition\nand results of operations.\n\n \n\nWe\nare dependent on third party supply, development and manufacturing and clinical service relationships and on single manufacturing sites\nfor certain products. Our business strategy utilizes the expertise and resources of third parties in a number of areas, including the\nconduct of clinical trials, other product development, manufacture and the protection of our intellectual property rights in various\ngeographical locations. This strategy creates risks for us by placing critical aspects of our business in the hands of third parties\nwhom we may not be able to manage or control adequately and who may not always act in our best interests.\n\n \n\n5\n\n \n\n \n\nWhere\nwe are dependent upon third parties for the development or manufacture of certain products, our ability to procure or manufacture in\na manner which complies with regulatory requirements may be constrained, and our ability to develop and deliver such material on a timely\nand competitive basis may be materially adversely affected, which may impact revenues.\n\n \n\nRegulatory\nrequirements for pharmaceutical products tend to make the substitution of suppliers and contractors costly and time-consuming. Alternative\nsuppliers may not be able to manufacture products effectively or obtain the necessary manufacturing licenses from relevant regulatory\nauthorities. The unavailability of adequate commercial quantities, the inability to develop alternative sources, a reduction or interruption\nin supply of contracted services, or a significant increase in the price of materials and services, could have a material adverse effect\non our ability to manufacture and market our products or to fulfill orders from our distributors or licensees, which in turn would have\na material adverse impact on our cash flows.\n\n \n\n**Insurance\ncoverage and reimbursement may be limited, unavailable or may be reduced over time in certain market segments for our products.**\n\n \n\nGovernment\nauthorities and third-party payers, such as private health insurers, decide which pharmaceutical products they will cover and the amount\nof reimbursement. Reimbursement may depend upon a number of factors, including the payer’s determination that use of a product\nis:\n\n \n\n \n●\na\ncovered benefit under the payor’s health plan;\n\n \n \n \n\n \n●\nsafe,\neffective and medically necessary;\n\n \n \n \n\n \n●\nappropriate\nfor the specific patient;\n\n \n \n \n\n \n●\ncost-effective;\nand\n\n \n \n \n\n \n●\nneither\nexperimental nor investigational.\n\n \n\nObtaining\ncoverage and reimbursement approval for a product from a government or other third- party payer is a time-consuming and costly process\nthat could require us to provide supporting scientific, clinical and cost-effectiveness data for the use of our products.\n\n \n\nWe\nmay not be able to provide data sufficient to gain acceptance with respect to coverage and reimbursement, or to demonstrate commercial\nvalue compared to existing established treatments. Even if we are able to furnish the requested data, there is no guarantee that a third-party\npayor will cover a product. If reimbursement of our products is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory\nlevels, we may be unable to achieve or sustain profitability.\n\n \n\nWe\nmay, in the future, seek approval to market our products in the UK, EU, the U.S. and in selected other jurisdictions. In the UK and EU,\nthe pricing of prescription pharmaceuticals is subject to national governmental control and pricing negotiations with governmental authorities\ncan, in some circumstances, take several years after obtaining marketing approval for a product. In addition, market acceptance and sales\nof our products will depend significantly on the availability of adequate coverage and reimbursement from third-party payers and may\nbe affected by existing and future healthcare reform measures.\n\n \n\nThe\ncontinuing efforts of governments, insurance companies, managed care organizations and other payers of healthcare services to contain\nor reduce costs of healthcare and/or impose price controls may materially adversely affect our ability to set prices for our products,\ngenerate revenues and achieve or maintain profitability. Any reduction in government reimbursement programs may result in a similar reduction\nin payments from private payers, which may materially adversely affect our business, prospects, financial condition and results of operations.\n\n \n\n6\n\n \n\n \n\n**Risks\nRelated to Our Intellectual Property**\n\n \n\n**The\nexpiration of certain intellectual property rights or an inability to obtain, maintain or enforce adequate intellectual property rights\nfor products that are marketed or in development may result in additional competition from other third-party products. Third parties\nmay have blocking intellectual property rights which could prevent the sale of products by us or require that compensation be paid to\nsuch third parties**\n\n \n\nThe\nextent of our success will, to a significant degree, depend on our ability to establish, maintain, defend and enforce adequate intellectual\nproperty rights and to operate without infringing the proprietary or intellectual property rights of third parties. We have been granted,\nor have in-licensed rights under, a number of key patent families for urcosimod (or other proprietary rights), and patent applications\nare pending in the UK, U.S., the EU, and certain other jurisdictions. We may develop or acquire further technology or products that are\nnot patentable or otherwise protectable. The strength of patents in the pharmaceutical field involves complex legal and scientific questions\nand can be uncertain. Patents or other rights might not be granted under any pending or future applications filed or in-licensed by us\nand any claims allowed might not be sufficiently broad to protect our technologies and products from competition. Competitors may also\nsuccessfully design around key patents held by us, thereby avoiding a claim of infringement. There is a risk that not all relevant prior\nart has been identified with respect to any particular patent or patent application and the existence of such prior art may invalidate\nany patents granted (or result in a patent application not proceeding to grant). Patents or other registerable rights might also be revoked\nfor other reasons after grant. Third parties may challenge the validity, enforceability or scope of any granted patents. Our defence\nof our proprietary rights could involve substantial costs (even if successful) and could result in declarations of invalidity or significantly\nnarrow the scope of those rights, limiting their value.\n\n \n\nCompetitors\nmay have filed applications or been granted patents, or obtained additional patents and proprietary rights, which relate to and could\nbe infringed by our products. An adverse outcome with respect to third party rights such as claims of infringement of patents or third-party\nproprietary rights by us could subject us to significant liabilities or require us to obtain a license for the continued use of the affected\nrights, which may not be available on acceptable terms or at all, or require us to cease commercialization and development efforts, or\nthe sale of the relevant products, in whole or in part in the relevant jurisdictions.\n\n \n\nWe\ncould be subject to claims for compensation by third parties claiming an ownership interest in the intellectual property rights relating\nto a commercially successful product. This may include claims from employee inventors in territories which permit such claims even where\nwe own the intellectual property rights in question. Any such failure to defend our proprietary intellectual property could have a material\nadverse effect on our business, prospects, financial condition and results of operations.\n\n \n\n**We\nmay not be able to obtain, maintain, defend or enforce the intellectual property rights covering our products**\n\n \n\nTo\ndate, we have had certain patents licensed to us in jurisdictions we consider to be important to our business. However, we cannot predict:\n\n \n\n \n●\nthe\ndegree and range of protection any patents will afford against competitors and competing technologies, including whether third parties\nwill find ways to invalidate or otherwise circumvent the patents by developing a competitive product that falls outside its scope;\n\n \n \n \n\n \n●\nif,\nor when any patents will be granted;\n\n \n \n \n\n \n●\nthat\ngranted patents will not be contested, invalidated or found unenforceable;\n\n \n \n \n\n \n●\nwhether\nor not others will obtain patents claiming aspects similar to those covered by the Company’s patents and patent applications;\n\n \n \n \n\n \n●\nwhether\nwe will need to initiate litigation or administrative proceedings, or whether such litigation or proceedings will be initiated by\nthird parties against us, which may be costly and time consuming; and\n\n \n \n \n\n \n●\nwhether\nthird parties will claim that our technology infringes upon their rights.\n\n \n\nWhile\nwe believe that we have novel composition of matter on the urcosimod peptide and novel methods of its use in treating either NCP or other ocular diseases,\nwe cannot be sure that these patent applications will issue as patents. Each patent office has different patentability requirements,\nbut we believe that the license patent applications contain patentable subject matter. The process for issuance of a patent involves\ncorrespondence with each local patent office in the jurisdictions in which the patent application is filed. That process, patent prosecution,\ninvolves a discussion of any relevant prior art and typically a discussion of the scope of the claims. The patent prosecution process\ncan take several years depending on the jurisdiction and is not in the control of the patent owner, but in the control of the local patent\noffice. We cannot be sure the outcome of the patent prosecution will be successful and result in issued patents.\n\n \n\nPatent\nprotection is of importance to us in maintaining our competitive position in our planned product lines and a failure to obtain or retain\nadequate protection could have a material adverse effect on our business, prospects, financial condition and results of operations.\n\n \n\n7\n\n \n\n \n\n**We\nmay not be able to prevent disclosure of our trade secrets, know-how or other proprietary information.**\n\n \n\nWe\nrely on trade secret protection to protect our interests in proprietary know-how and in processes for which patents are difficult to\nobtain or enforce. If we are unable to protect our trade secrets adequately the value of our technology and products could be significantly\ndiminished. Furthermore, our employees, consultants, contract personnel or third-party partners, either accidentally or through willful\nmisconduct, may cause serious damage to our programs and/or our strategy by disclosing confidential information to third parties. It\nis also possible that confidential information could be obtained by third parties as a result of breaches of our physical or electronic\nsecurity systems. Any disclosure of confidential data into the public domain or to third parties could allow third parties to access\nconfidential information and use it in competition with us. In addition, others may independently discover the confidential information.\nAny action to enforce our rights against any misappropriation or unauthorized use and/or disclosure of confidential information is likely\nto be time-consuming and expensive, and may ultimately be unsuccessful, or may result in a remedy that is not commercially valuable.\nAny such loss of confidential information or failure to enforce our rights in relation to such confidential information, or unsatisfactory\noutcome of any related litigation could have a material adverse effect on our business, prospects, financial condition or results of\noperation.\n\n \n\n**Our\nproduct candidates could infringe patents and other intellectual property rights of third parties.**\n\n \n\nOur\ncommercial success depends upon our ability, and the ability of any third party with which we may partner to develop, manufacture, market\nand sell our products and use our patent- protected technologies without infringing the patents of third parties.\n\n \n\nOur\nproducts may infringe or may be alleged to infringe existing patents or patents that may be granted in the future which may result in\ncostly litigation and could result in our having to pay substantial damages or limit our ability to commercialize our products.\n\n \n\nBecause\nsome patent applications in Europe, the U.S. and many foreign jurisdictions may be maintained in secrecy until the patents are issued,\npatent applications in such jurisdictions are typically not published until 18 months after filing, and publications in the scientific\nliterature often lag behind actual discoveries. Accordingly, we cannot be certain that others have not filed patents that may cover our\ntechnologies, our products or the use of our products. Additionally, pending patent applications which have been published can, subject\nto certain limitations, be later amended in a manner that could cover our technologies, our products or the use of our products. As a\nresult, we may become party to, or threatened with, future adversarial proceedings or litigation regarding patents with respect to our\nproducts and technology.\n\n \n\nIf\nwe are sued for patent infringement, we would need to demonstrate that our products or methods either do not infringe the patent claims\nof the relevant patent or that the patent claims are invalid, and we may not be able to do this. If we are found to infringe a third\nparty’s patent, we could be required to obtain a license from such third party to continue developing and marketing our products\nand technology or we may elect to enter into such a license in order to settle litigation or in order to resolve disputes prior to litigation.\nHowever, we may not be able to obtain any required license on commercially reasonable terms or at all. Even if we are able to obtain\na license, it could be non- exclusive, thereby giving our competitors access to the same technologies that are licensed to us and could\nrequire us to make substantial royalty payments. We could also be forced, including by court order, to cease commercializing the infringing\ntechnology or products. A finding of infringement could prevent us from commercializing our products or force us to cease some of our\nbusiness operations, which could materially harm our business. Claims that we have misappropriated the confidential information or trade\nsecrets of third parties could have a similarly negative impact on our business.\n\n \n\nAny\nsuch claims are likely to be expensive to defend, and some of our competitors may be able to sustain the costs of complex patent litigation\nmore effectively than us because they have substantially greater resources. Moreover, even if we are successful in defending any infringement\nproceedings, we may incur substantial costs and divert management’s time and attention in doing so, which could materially adversely\naffect our business, prospects, results of operations or financial condition.\n\n \n\n**Risks\nRelated to Our Operations**\n\n \n\n**Risks\nrelating to managing growth, employee matters and other risks relating to our business**\n\n \n\nGrowth\nmay place significant demands on our management and resources. We expect to experience growth in the number of our employees and the\nscope of our operations in connection with the continued development and, in due course, the potential commercialization of our products.\n\n \n\nThis\npotential growth will place a significant strain on our management and operations, and we may have difficulty managing this future potential\ngrowth.\n\n \n\nWe\nare highly dependent on our current executive officers and their services are critical to the successful implementation of our product\ndevelopment and regulatory strategies. While suitable contracts of employment and consultancy agreements are in place, including six\nto 12 months’ notice periods for all executive officers, they may give notice to terminate their employment or services with us\nat any time. The loss of the services of any of our executive officers and our inability to find suitable replacements could harm our\nbusiness, prospects, financial condition, results of operations and ability to achieve the successful development or commercialization\nof our products.\n\n \n\n8\n\n \n\n \n\nChallenges\nin identifying and retaining key personnel could impair our ability to conduct and grow our operations effectively. Our ability to compete\nin the highly competitive pharmaceutical industry depends upon our ability to attract and retain highly qualified management and sales\nteams. We are intending to recruit our own commercial team and expand our existing central infrastructure team. Many of the other pharmaceutical\ncompanies and academic institutions that we compete against for qualified personnel have greater financial and other resources, different\nrisk profiles and a longer history in the industry than we do. We might not be able to attract or retain these key people on conditions\nthat are economically feasible. Our inability to attract and retain these key people could have a material adverse effect on our business,\nprospects, financial conditions and results of operation.\n\n \n\n**We\nmay become subject to product liability claims.**\n\n \n\nWe\nface an inherent risk of product liability and associated adverse publicity as a result of the clinical testing of our products and sales\nof our products once marketing approval is received from relevant regulatory authorities.\n\n \n\nCriminal\nor civil proceedings might be filed against us by any study subjects, patients, relevant regulatory authorities, pharmaceutical companies,\nand any other third party using or marketing our products. Any such product liability claims may include allegations of defects in manufacturing\nor design, negligence, strict liability, a breach of warranties and a failure to warn of dangers inherent in the product.\n\n \n\nIf\nwe cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit\ncommercialization of our products, if approved. Even if we successfully defend ourselves against such product liability claims it could\nrequire significant financial and management resources. Regardless of the merits or eventual outcome, product liability claims may result\nin:\n\n \n\n \n●\ndecreased\ndemand for our products due to negative public perception;\n\n \n \n \n\n \n●\ninjury\nto our reputation;\n\n \n \n \n\n \n●\nwithdrawal\nof clinical study participants or difficulties in recruiting new study participants;\n\n \n \n \n\n \n●\ninitiation\nof investigations by regulators;\n\n \n \n \n\n \n●\ncosts\nto defend or settle the related litigation;\n\n \n \n \n\n \n●\ndiversion\nof management’s time and our resources;\n\n \n \n \n\n \n●\nsubstantial\nmonetary awards to patients, study participants or subjects;\n\n \n \n \n\n \n●\nproduct\nrecalls, withdrawals or labelling, marketing or promotional restrictions;\n\n \n \n \n\n \n●\nloss\nof revenues from product sales; or\n\n \n \n \n\n \n●\nthe\ninability to commercialize any of our products, if approved.\n\n \n\nAlthough\nwe will maintain levels of insurance customary for our sector to cover our current and future business operations, any claim that may\nbe brought against us could result in a court judgment or settlement in an amount that is not covered, in whole or in part, by our insurance\nor that is in excess of the limits of our insurance coverage. Our insurance policies also have various exclusions, and we may be subject\nto a product liability claim for which we have no coverage. In such cases, we would have to pay any amounts awarded by a court or negotiated\nin a settlement that exceed our coverage limitations or that are not covered by our insurance, and we may not have, or be able to obtain,\nsufficient capital to pay such amounts.\n\n \n\n9\n\n \n\n \n\nIf\nwe or our partners, licensees and subcontractors were unable to obtain and maintain appropriate insurance coverage at an acceptable cost,\nor to protect ourselves in any way against actions for damages, this would seriously affect the marketing of our products and, more generally,\nbe detrimental to our business, prospects, results of operations or financial condition.\n\n \n\n**Our\nemployees, contractors, consultants and commercial partners may engage in misconduct or other improper activities, including non-compliance\nwith regulatory standards.**\n\n \n\nWe\nare exposed to the risk of employees, independent contractors, principal investigators, consultants, commercial partners or vendors engaging\nin fraud or other misconduct. Misconduct could include intentional failures to comply with FDA, MHRA or EMA regulations or those of other\nrelevant regulatory authorities, to provide accurate information to the FDA,MHRA, EMA or other relevant regulatory authorities, or to\ncomply with manufacturing standards we have established.\n\n \n\nIn\nparticular, sales, marketing and business arrangements in the life sciences and biotechnology sector are subject to extensive laws and\nregulations intended to prevent fraud, misconduct, bribery and other abusive practices. These laws and regulations may restrict or prohibit\na wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements.\n\n \n\nEmployee\nmisconduct could also involve the improper use of information obtained in the course of clinical studies, which could result in regulatory\nsanctions and serious harm to our reputation. It is not always possible to identify and deter employee misconduct, and the precautions\nwe take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting\nus from governmental or relevant regulatory authority investigations or other actions or lawsuits stemming from a failure to be in compliance\nwith such laws or regulations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting\nour rights, those actions could have a significant impact on our business, including the imposition of significant fines or other sanctions,\nand our reputation.\n\n \n\nWe\nmay be vulnerable to disruptions of information technology systems or breaches of data security. We are dependent on information technology\nsystems and infrastructure to operate our business. In the ordinary course of our business, we collect, store and transmit confidential\ninformation, including intellectual property, proprietary business information and personal information. It is important that we do so\nin a secure manner to maintain confidentiality and integrity of such confidential information. Any failure to do so could adversely affect\nour business, prospects, results of operation or financial condition.\n\n \n\n**The\nrelationship of the UK with the EU could impact our ability to operate efficiently in certain jurisdictions or in certain markets.**\n\n \n\nThe\nUK formally exited the EU on January 31, 2020, which is commonly known as Brexit. Under the terms of its departure, the UK entered a\ntransition period during which it continued to follow all EU rules until December 31, 2020, or the Transition Period. On December 30,\n2020, the UK and EU signed the Trade and Cooperation Agreement, which includes an agreement on free trade between the two parties.\n\n \n\nThere\nis considerable uncertainty resulting from a lack of precedent and the complexity of the UK and EU’s intertwined legal regimes\nas to how Brexit (following the Transition Period) will impact the pharmaceutical industry in Europe. Since a significant proportion\nof the regulatory framework in the UK applicable to our business and product candidates is derived from EU directives and regulations,\nBrexit could materially impact the regulatory regime with respect to the development, manufacture, importation, approval and commercialization\nof our product candidates in the UK or the EU. The impact will largely depend on the extent to which the UK chooses to diverge from the\nEU regulatory framework over time. For example, the UK is no longer covered by the centralized procedures for obtaining EU-wide marketing\nauthorizations and our product candidates will therefore require a separate marketing authorization for such products to be marketed\nin the UK. Any delay in obtaining, or an inability to obtain, any marketing approvals would prevent us from, or delay commercialization\nof, product candidates in the UK and/or the EEA and restrict our ability to generate revenue and achieve and sustain profitability.\n\n \n\n10\n\n \n\n \n\nIf\nany of these outcomes occur, we may be forced to restrict or delay efforts to seek regulatory approval in the UK for its product candidates,\nwhich could significantly and materially harm our business.\n\n \n\nFurther,\nthe UK’s withdrawal from the EU has resulted in the relocation of the EMA from the UK to the Netherlands. This relocation has caused,\nand may continue to cause, disruption in the administrative and medical scientific links between the EMA and the MHRA, including delays\nin granting clinical trial authorization or marketing authorization, disruption of importation and export of medical devices, active\nsubstance and other components of new drug formulations, and disruption of the supply chain for clinical trial product and final authorized\nformulations. The cumulative effects of the disruption to the regulatory framework may add considerably to the development lead time\nto marketing authorization and commercialization of product candidates in the EU and/or the UK.\n\n \n\n**Risks\nRelated to Government Regulation**\n\n \n\n**Even\nif we complete the necessary clinical trials, we cannot predict when, or if, we will obtain regulatory approval to commercialize our\nproduct candidates and whether the approval may be for a narrower indication than we seek.**\n\n \n\nWe\ncannot commercialize a product candidate until the appropriate regulatory authorities have reviewed and approved the product candidate.\nThe FDA must review and approve any new pharmaceutical product before it can be marketed and sold in the United States. The FDA regulatory\nreview and approval process, which includes evaluation of preclinical studies and clinical trials of a product candidate and proposed\nlabelling, as well as the evaluation of the manufacturing process and manufacturers’ facilities, all of which is lengthy, expensive\nand uncertain. To obtain approval, we must, among other things, demonstrate with substantial evidence from well-controlled clinical trials\nthat the product candidate is both safe and effective for each indication where approval is sought. Even if our product candidates meet\nthe FDA’s safety and effectiveness endpoints in clinical trials, the FDA may not complete their review processes in a timely manner,\nor we may not be able to obtain regulatory approval. The FDA has substantial discretion in the review and approval process and may refuse\nto file our application for substantive review or may determine after review of our data that our application is insufficient to allow\napproval of our product candidates. The FDA may require that we conduct additional preclinical studies, clinical trials or manufacturing\nvalidation studies and submit that data before it will reconsider our application. Additional delays may result if an FDA Advisory Committee\nor other regulatory authority recommends non-approval or restrictions on approval. In addition, we may experience delays or rejections\nbased upon additional government regulation from future legislation or administrative action, or changes in regulatory authority policy\nduring the period of product development, clinical trials and the review process.\n\n \n\nThe\nFDA, MHRA, EMA or other regulatory authorities also may approve a product candidate for more limited indications than requested or may\nimpose significant limitations in the form of narrow indications, warnings or a risk evaluation and mitigation strategy, or REMS. These\nregulatory authorities may require precautions or contraindications with respect to conditions of use or may grant approval subject to\nthe performance of costly post-marketing clinical trials. In addition, the FDA, EMA or other regulatory authorities may not approve the\nlabelling claims that are necessary or desirable for the successful commercialization of our product candidates. Any of the foregoing\nscenarios could harm the commercial prospects for our product candidates and negatively impact our business, financial condition, results\nof operations and prospects.\n\n \n\n**Delays\nin obtaining regulatory approval of our manufacturing process and facility or disruptions in our manufacturing process may delay or disrupt\nour product development and commercialization efforts.**\n\n \n\nWe\ndo not currently operate manufacturing facilities for clinical or commercial production of our product candidates. Before we can begin\nto commercially manufacture our product candidates, whether in a third-party facility or in our own facility, if and when established,\nwe must obtain regulatory approval from the FDA for our manufacturing process and facility. A manufacturing authorization must also be\nobtained from the appropriate European Union and UK regulatory authorities and from other foreign regulatory authorities, as applicable.\nIn order to obtain approval, we will need to ensure that all of our processes, methods and equipment are compliant with Current Good\nManufacturing Practice (‘cGMP’), and perform extensive audits of vendors, contract laboratories and suppliers. If any of\nour vendors, contract laboratories or suppliers are found to be non-compliant with cGMP, we may experience delays or disruptions in manufacturing\nwhile we work with these third parties to remedy the violation or while we work to identify suitable replacement vendors. The cGMP requirements\ngovern quality control of the manufacturing process and documentation policies and procedures. In complying with cGMP, we will be obligated\nto expend time, money and effort in production, record keeping and quality control to assure that the product meets applicable specifications\nand other requirements. If we fail to comply with these requirements, we would be subject to possible regulatory action and may not be\npermitted to sell any product candidate that we may develop.\n\n \n\n11\n\n \n\n \n\nIf\nwe or our third-party manufacturers fail to comply with applicable cGMP regulations, the FDA, MHRA, EMA and other regulatory authorities\ncan impose regulatory sanctions including, among other things, refusal to approve a pending application for a new product candidate or\nsuspension or revocation of a pre-existing approval. Such an occurrence may cause our business, financial condition, results of operations\nand prospects to be harmed.\n\n \n\nAdditionally,\nif the supply of our products from our third-party manufacturers to us is interrupted for any reason, including due to regulatory requirements\nor actions (including recalls), adverse financial developments at or affecting the supplier, failure by the supplier to comply with cGMP\nrequirements, contamination, business interruptions or labor shortages or disputes, there could be a significant disruption in commercial\nsupply of our products. We do not currently have a backup manufacturer of our product candidate supply for clinical trials or commercial\nsale. An alternative manufacturer would need to be qualified through a supplement to its regulatory filing, which could result in further\ndelays. The regulatory authorities also may require additional clinical trials if a new manufacturer is relied upon for commercial production.\nSwitching manufacturers may involve substantial costs and could result in a delay in our desired clinical and commercial timelines.\n\n \n\n**If\nour competitors are able to obtain orphan drug exclusivity for products that constitute the same drug and treat the same indications\nas our product candidates, we may not be able to have competing products approved by applicable regulatory authorities for a significant\nperiod of time. In addition, even if we obtain orphan drug exclusivity for any of our products, such exclusivity may not protect us from\ncompetition.**\n\n \n\nRegulatory\nauthorities in some jurisdictions, including the United States and the European Union, may designate products for relatively small patient\npopulations as orphan drugs. Under the Orphan Drug Act of 1983, the FDA may designate a product candidate as an orphan drug if it is\nintended to treat a rare disease or condition, which is generally defined as having a patient population of fewer than 200,000 individuals\nin the United States, or a patient population greater than 200,000 in the United States where there is no reasonable expectation that\nthe cost of developing the drug will be recovered from sales in the United States. In the United States, orphan drug designation entitles\na party to financial incentives such as opportunities for grant funding towards clinical trial costs, tax advantages and user-fee waivers.\nIn the European Union, the EMA’s Committee for Orphan Medicinal Products grants orphan drug designation to promote the development\nof products that are intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition\naffecting not more than five in 10,000 people in the European Union. Additionally, orphan drug designation is granted for products intended\nfor the diagnosis, prevention or treatment of a life-threatening, seriously debilitating or serious and chronic condition and when, without\nincentives, it is unlikely that sales of the drug in the European Union would be sufficient to justify the necessary investment in developing\nthe drug or biologic product. In the European Union, orphan drug designation entitles a party to a number of incentives, such as protocol\nassistance and scientific advice specifically for designated orphan medicines, and potential fee reductions depending on the status of\nthe sponsor.\n\n \n\nThe\ndesignation as an orphan product does not guarantee that any regulatory agency will accelerate regulatory review of, or ultimately approve,\nthat product candidate, nor does it limit the ability of any regulatory agency to grant orphan drug designation to product candidates\nof other companies that treat the same indications as our product candidates prior to our product candidates receiving exclusive marketing\napproval.\n\n \n\nGenerally,\nif a product candidate with an orphan drug designation receives the first marketing approval for the indication for which it has such\ndesignation, the product is entitled to a period of marketing exclusivity, which precludes the FDA, the MHRA or the EMA from approving\nanother marketing application for a product that constitutes the same drug treating the same indication for that marketing exclusivity\nperiod, except in limited circumstances. If another sponsor receives such approval before we do (regardless of our orphan drug designation),\nwe will be precluded from receiving marketing approval for our product for the applicable exclusivity period. The applicable period is\nseven years in the United States and 10 years in the European Union and the UK. The exclusivity period in the European Union and the\nUK can be reduced to six years if a product no longer meets the criteria for orphan drug designation or if the product is sufficiently\nprofitable so that market exclusivity is no longer justified. Orphan drug exclusivity may be revoked if any regulatory agency determines\nthat the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantity of the product\nto meet the needs of patients with the rare disease or condition.\n\n \n\n12\n\n \n\n \n\nEven\nif we obtain orphan drug exclusivity for a product candidate, that exclusivity may not effectively protect the product candidate from\ncompetition because different drugs can be approved for the same condition. In the United States, even after an orphan drug is approved,\nthe FDA may subsequently approve another drug for the same condition if the FDA concludes that the latter drug is not the same drug or\nis clinically superior in that it is shown to be safer, more effective or makes a major contribution to patient care. In the European\nUnion, marketing authorization may be granted to a similar medicinal product for the same orphan indication if:\n\n \n\n \n●\nthe\nsecond applicant can establish in its application that its medicinal product, although similar to the orphan medicinal product already\nauthorized, is safer, more effective or otherwise clinically superior;\n\n \n \n \n\n \n●\nthe\nholder of the marketing authorization for the original orphan medicinal product consents to a second orphan medicinal product application;\nor\n\n \n \n \n\n \n●\nthe\nholder of the marketing authorization for the original orphan medicinal product cannot supply sufficient quantities of orphan medicinal\nproduct.\n\n \n\n**Even\nif we obtain regulatory approval for a product candidate, our product candidates will remain subject to regulatory oversight.**\n\n \n\nEven\nif we obtain regulatory approval for our product candidates, they will be subject to ongoing regulatory requirements for manufacturing,\nlabelling, packaging, storage, advertising, promotion, sampling, record-keeping and submission of safety and other post-market information.\nAny regulatory approvals that we receive for our product candidates may also be subject to limitations on the approved indicated uses\nfor which the product may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing\ntesting, including Phase 4 clinical trials, and surveillance to monitor the quality, safety and clinical effectiveness of the product.\n\n \n\nSome\nof our product candidates are classified as biologics in the United States, and therefore, can only be sold if we obtain a biologics\nlicense application, or BLA, from the FDA. The holder of an approved BLA also must submit new or supplemental applications and obtain\nFDA approval for certain changes to the approved product, product labelling or manufacturing process. In addition, the holder of an approved\nBLA must comply with the FDA’s advertising and promotion requirements, such as those related to the prohibition on promoting products\nfor uses or in patient populations that are not described in the product’s approved labelling (known as “off-label use”).\nAdvertising and promotional materials must comply with FDA rules and are subject to FDA review, in addition to other potentially applicable\nfederal and state laws.\n\n \n\nIn\naddition, product manufacturers and their facilities are subject to payment of user fees and continual review and periodic inspections\nby the FDA and other regulatory authorities for compliance with cGMP requirements and adherence to commitments made in an NDA or foreign\nmarketing application. If we, or a regulatory authority, discover previously unknown problems with a product, such as adverse events\nof unanticipated severity or frequency, or problems with the facility where the product is manufactured or if a regulatory authority\ndisagrees with the promotion, marketing or labelling of that product, a regulatory authority may impose restrictions relative to that\nproduct, the manufacturing facility or us, including requiring recall or withdrawal of the product from the market or suspension of manufacturing.\n\n \n\nIf\nwe fail to comply with applicable regulatory requirements following approval of our product candidates, a regulatory or enforcement authority\nmay:\n\n \n\n \n●\nissue\na warning letter asserting that we are in violation of the law;\n\n \n \n \n\n \n●\nseek\nan injunction or impose administrative, civil or criminal penalties or monetary fines;\n\n \n \n \n\n \n●\nsuspend\nor withdraw regulatory approval;\n\n \n\n13\n\n \n\n \n\n \n●\nsuspend\nany ongoing clinical trials;\n\n \n \n \n\n \n●\nrefuse\nto approve a pending NDA or comparable foreign marketing application (or any supplements thereto) submitted by us or our strategic\npartners;\n\n \n \n \n\n \n●\nrestrict\nthe marketing or manufacturing of the product;\n\n \n \n \n\n \n●\nseize\nor detain the product or otherwise require the withdrawal of the product from the market;\n\n \n \n \n\n \n●\nrefuse\nto permit the import or export of the product; or\n\n \n \n \n\n \n●\nrefuse\nto allow us to enter into supply contracts, including government contracts.\n\n \n\nAny\ngovernment investigation of alleged violations of law could require us to expend significant time and resources in response and could\ngenerate negative publicity. The occurrence of any event or penalty described above may inhibit our ability to commercialize our product\ncandidates and adversely affect our business, financial condition, results of operations and prospects.\n\n \n\nIn\naddition, the FDA’s policies, and those of the EMA and other regulatory authorities, may change and additional government regulations\nmay be enacted that could prevent, limit or delay regulatory approval of our product candidates. We cannot predict the likelihood, nature\nor extent of government regulation that may arise from future legislation or administrative action, either in the United States or abroad.\nIf we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not\nable to maintain regulatory compliance, we may lose any marketing approval that we may have obtained and we may not achieve or sustain\nprofitability, which would negatively impact our business, financial condition, results of operations and prospects.\n\n \n\n**Even\nif we obtain and maintain approval for our product candidates in a major pharmaceutical market such as the United States, we may never\nobtain approval for our product candidates in other major markets.**\n\n \n\nIn\norder to market any products in a country or territory, we must establish and comply with numerous and varying regulatory requirements\nof such countries or territories regarding safety and effectiveness. Clinical trials conducted in one country may not be accepted by\nregulatory authorities in other countries, and regulatory approval in one country does not mean that regulatory approval will be obtained\nin any other country. Approval procedures vary among countries and can involve additional product testing and validation and additional\nadministrative review periods. Seeking regulatory approvals in all major markets could result in significant delays, difficulties and\ncosts for us and may require additional preclinical studies or clinical trials, which would be costly and time-consuming. Regulatory\nrequirements can vary widely from country to country and could delay or prevent the introduction of our product candidates in those countries.\nFor example, in many jurisdictions outside of the United States, a product candidate must be approved for reimbursement before it can\nbe approved for sale in that jurisdiction. In some cases, the price that we intend to charge for our products would also be subject to\napproval. Satisfying these and other regulatory requirements is costly, time consuming, uncertain and subject to unanticipated delays.\nIn addition, our failure to obtain regulatory approval in any country may delay or have negative effects on the process for regulatory\napproval in other countries. We currently do not have any product candidates approved for sale in any jurisdiction, whether in the United\nStates, the European Union, the UK or any other international markets, and we do not have experience in obtaining regulatory approval\nin international markets. If we fail to comply with regulatory requirements in international markets or to obtain and maintain required\napprovals, our target market will be reduced and our ability to realize the full market potential of our product candidates will be compromised.\n\n \n\n**We\nmay seek a conditional marketing authorization in the European Union or the UK for some or all of our current product candidates, but\nwe may not be able to obtain or maintain such designation.**\n\n \n\nAs\npart of its marketing authorization process, the EMA and the UK may grant marketing authorizations for certain categories of medicinal\nproducts on the basis of less complete data than is normally required, when doing so may meet unmet medical needs of patients and serve\nthe interest of public health. In such cases, it is possible for the Committee for Medicinal Products for Human Use, or CHMP, to recommend\nthe granting of a marketing authorization, subject to certain specific obligations to be reviewed annually, which is referred to as a\nconditional marketing authorization.\n\n \n\n14\n\n \n\n \n\nThis\nmay apply to medicinal products for human use that fall under the jurisdiction of the EMA, including those that aim at the treatment,\nthe prevention, or the medical diagnosis of seriously debilitating or life-threatening diseases and those designated as orphan medicinal\nproducts.\n\n \n\nA\nconditional marketing authorization may be granted when the CHMP finds that, although comprehensive clinical data referring to the safety\nand therapeutic utility of the medicinal product have not been supplied, all the following requirements are met:\n\n \n\n \n●\nthe\nrisk-benefit balance of the medicinal product is positive;\n\n \n \n \n\n \n●\nit\nis likely that the applicant will be in a position to provide the comprehensive clinical data;\n\n \n \n \n\n \n●\nunmet\nmedical needs will be fulfilled; and\n\n \n \n \n\n \n●\nthe\nbenefit to public health of the immediate availability on the market of the medicinal product concerned outweighs the risk inherent\nin the fact that additional data is still required.\n\n \n\nThe\ngranting of a conditional marketing authorization is restricted to situations in which only the clinical part of the application is not\nyet fully complete. Incomplete preclinical or quality data may only be accepted if duly justified and only in the case of a product intended\nto be used in emergency situations in response to public health threats. Conditional marketing authorizations are valid for one year,\non a renewable basis. The holder will be required to complete ongoing trials or to conduct new trials with a view to confirming that\nthe benefit-risk balance is positive. In addition, specific obligations may be imposed in relation to the collection of pharmacovigilance\ndata.\n\n \n\nGranting\na conditional marketing authorization allows medicines to reach patients with unmet medical needs earlier than might otherwise be the\ncase and will ensure that additional data on a product is generated, submitted, assessed and acted upon.\n\n \n\n**Healthcare\nlegislative reform measures may have a negative impact on our business and results of operations.**\n\n \n\nIn\nthe United States and some foreign jurisdictions, there have been, and continue to be, several legislative and regulatory changes and\nproposed changes regarding the healthcare system that could prevent or delay marketing approval of our product candidates, restrict or\nregulate post-approval activities and affect our ability to profitably sell any product candidates for which we obtain marketing approval.\n\n \n\nIn\nthe United States, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, or the MMA, changed the way Medicare covers\nand pays for pharmaceutical products. The MMA expanded Medicare coverage for outpatient drug purchases by adding a new Medicare Part\nD program and introduced a new reimbursement methodology based on average sales prices for Medicare Part B physician-administered drugs.\nIn addition, the MMA authorized Medicare Part D prescription drug plans to limit the number of drugs that will be covered in any therapeutic\nclass in their formularies. The MMA’s cost reduction initiatives and other provisions could decrease the coverage and price that\nwe receive for any approved products. While the MMA applies only to drug benefits for Medicare beneficiaries, private payors often follow\nMedicare coverage policy and payment limitations in setting their own reimbursement rates. Therefore, any reduction in reimbursement\nthat results from the MMA may result in a similar reduction in payments from private payors. Similar regulations or reimbursement policies\nmay be enacted in international markets, which could similarly impact our business.\n\n \n\n15\n\n \n\n \n\nFor\nexample, in 2010, the Affordable Care Act, or the ACA, was enacted in the United States. Among other provisions, the ACA established\nan annual, nondeductible fee on any entity that manufactures or imports specified branded prescription drugs and biologic agents; extended\nmanufacturers’ Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations;\nexpanded the entities eligible for discounts under the 340B drug pricing program; increased the statutory minimum rebates a manufacturer\nmust pay under the Medicaid Drug Rebate Program; established a new Patient-Centered Outcomes Research Institute to oversee, identify\npriorities in and conduct comparative clinical effectiveness research, along with funding for such research; and established a Center\nfor Medicare & Medicaid Innovation at the Centers for Medicare & Medicaid Services, or CMS, to test innovative payment and service\ndelivery models to lower Medicare and Medicaid spending.\n\n \n\nSince\nits enactment, there have been executive, judicial and Congressional challenges to certain aspects of the ACA. On June 17, 2021, the\nU.S. Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically ruling on the\nconstitutionality of the ACA.\n\n \n\nAdditionally,\nin the United States, the Biologics Price Competition and Innovation Act of 2009 created an abbreviated approval pathway for biologic\nproducts that are demonstrated to be biosimilar or “interchangeable” with an FDA-approved biologic product. This new pathway\ncould allow competitors to reference data from biologic products already approved after 12 years from the time of approval. This could\nexpose us to potential competition by lower-cost biosimilars even if we commercialize a product candidate faster than our competitors.\nMoreover, the creation of this abbreviated approval pathway does not preclude or delay a third party from pursuing approval of a competitive\nproduct candidate via the traditional approval pathway based on their own clinical trial data.\n\n \n\nIn\naddition, other legislative changes have been proposed and adopted since the ACA was enacted. For example, beginning April 1, 2013, Medicare\npayments to providers were reduced under the sequestration required by the Budget Control Act of 2011, which will remain in effect through\nthe 2032 fiscal year, unless additional Congressional action is taken. Additionally, on January 2, 2013, the American Taxpayer Relief\nAct of 2012 was signed into law, which, among other things, further reduced Medicare payments to several types of providers. On March\n11, 2021, the American Rescue Plan Act of 2021 was signed into law, which eliminated the statutory cap on drug manufacturers’ Medicaid\ndrug rebate liability, beginning January 1, 2024. The rebate was previously capped at 100% of a drug’s average manufacturer price.\nFurther, there has been heightened governmental scrutiny in the United States of pharmaceutical pricing practices in light of the rising\ncost of prescription drugs. Such scrutiny has resulted in several recent congressional inquiries and proposed and enacted federal and\nstate legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing\nand manufacturer patient assistance programs, and reform government program reimbursement methodologies for products.\n\n \n\nMost\nsignificantly, the Inflation Reduction Act, or the IRA, was enacted in 2022. Among other things, the IRA requires manufacturers of certain\ndrugs to engage in price negotiations with Medicare, with prices that can be negotiated subject to a cap (with resulting prices for the\ninitial ten drugs first effective in 2026), imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that\noutpace inflation (first due in 2023), redesigns the Medicare Part D benefit (beginning in 2025), and replaces the Part D coverage gap\ndiscount program with a new discounting program (which began on January 1, 2025). Under the IRA, small molecule drugs and biologics that\notherwise qualify for selection first become eligible for price negotiation seven and eleven years, respectively, after U.S. FDA approval.\nThe IRA permits the Secretary of Health and Human Services, or HHS, to implement many of these provisions through guidance, as opposed\nto regulation, for the initial years. CMS published the negotiated prices for the initial ten drugs, which went into effect in January\n2026, and for the subsequent 15 drugs, which will first be effective in 2027, as well as the next 15 drugs that will be subject to price\nnegotiation. Each year thereafter, more Part B and Part D products will become subject to the HHS price negotiation program. HHS has\nissued and will continue to issue guidance implementing the IRA, although the program is currently subject to legal challenges. While\nthe impact of the IRA on us and the pharmaceutical industry cannot yet be fully determined, it is likely to be significant. Additional\ndrug pricing proposals could appear in future legislation.\n\n \n\nThe\nOne Big Beautiful Bill Act, which was enacted in July 2025, imposes significant reductions in the funding of the Medicaid program. Such\nreductions are expected to decrease the number of persons enrolled in Medicaid and reduce the services covered by Medicaid, which could\nadversely affect our sales of any product candidate that we commercialize. The Trump administration is also pursuing a two-fold strategy\nto reduce drug costs in the U.S. While it is unclear whether and how the Trump proposals will be implemented, the Trump policies are\nlikely to have a negative impact on the pharmaceutical industry and on our ability to receive adequate revenues for our product candidates,\nif approved. On the one hand, President Trump has threatened to impose significant tariffs on pharmaceutical manufacturers that do not\nadopt pricing policies such as most favored nation pricing, which would tie the price for drugs in the U.S. to the lowest price in a\ngroup of other countries. In response, multiple manufacturers have reportedly entered into confidential pricing agreements with the federal\ngovernment. On the other hand, the Trump administration is pursuing traditional regulatory pathways to impose drug pricing policies,\nalthough final regulations have not yet been published. Even regulatory proposals or executive actions that are ultimately deemed unlawful\ncould negatively impact the U.S. pharmaceutical sector and our business. In addition, pharmaceutical pricing and marketing has long been\nthe subject of considerable discussion in Congress and among policymakers, and it is possible that Congress could enact additional laws\nthat negatively affect the pharmaceutical industry.\n\n \n\n16\n\n \n\n \n\nAt\nthe state level, state governments have increasingly passed legislation and implemented regulations designed to control pharmaceutical\nand biological product pricing, including price or reimbursement constraints, discounts, restrictions on certain product access, marketing\ncost disclosure, drug price reporting and other transparency measures, and, in some cases, designed to encourage importation from other\ncountries and bulk purchasing. Some states have enacted legislation creating so-called prescription drug affordability boards with the\ngoal of imposing price limits on certain drugs in these states, and at least one state board is imposing an upper payment limit. States\nare also seeking to implement general, across the board price caps for pharmaceuticals, or are seeking to regulate drug distribution.\nLegally mandated price controls on payment amounts by third-party payors or other restrictions could harm our business, financial condition,\nresults of operations and prospects. In addition, regional healthcare authorities and individual hospitals are increasingly using bidding\nprocedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other healthcare\nprograms. These measures could reduce the ultimate demand for any of our current and future product candidates, if approved, or put pressure\non our product pricing, which could negatively affect our business, financial condition, results of operations and prospects.\n\n \n\nAdditional\nchanges that may affect our business include those changes governing enrollment in federal healthcare programs, reimbursement changes,\nrules regarding prescription drug benefits under the health insurance exchanges and fraud and abuse and enforcement. Continued implementation\nof the PPACA and the passage of additional laws and regulations may result in the expansion of new programs such as Medicare payment\nfor performance initiatives, and may impact existing government healthcare programs, such as by improving the physician quality reporting\nsystem and feedback program.\n\n \n\nFor\neach state that does not choose to expand its Medicaid program, there likely will be fewer insured patients overall, which could impact\nthe sales, business and financial condition of manufacturers of branded prescription drugs. Where patients receive insurance coverage\nunder any of the new options made available through the PPACA, manufacturers may be required to pay Medicaid rebates on that resulting\ndrug utilization. The U.S. federal government also has announced delays in the implementation of key provisions of the ACA.\n\n \n\nIn\naddition, there have been judicial and congressional challenges to certain aspects of the ACA, and we expect the current administration\nand Congress will likely continue to seek legislative and regulatory changes, including repeal and replacement of certain provisions\nof the ACA.\n\n \n\nThe\nTrump Administration issued a proposed rule on March 10, 2025 (“Proposed Rule”) amending regulations governing insurance\ncoverages subject to the ACA.\n\n \n\nIn\nconjunction with the Proposed Rule, the Centers for Medicare & Medicaid Services (“CMS”) issued a statement explaining\nthat the proposed regulations include “critical and necessary steps to protect people from being enrolled in Marketplace coverage\nwithout their knowledge or consent, promote stable and affordable health insurance markets, and ensure taxpayer dollars fund financial\nassistance only for the people the ACA set out to support.” To support its position, CMS cited a report from the Paragon Health\nInstitute suggesting “4 to 5 million people were improperly enrolled in subsidized ACA coverage in 2024, costing federal taxpayers\nup to $20 billion.” The impact analysis that accompanies the Proposed Rule shows that the Proposed Rule will reduce enrollment\nin the ACA plans, reduce the number of people who access premium tax credits and cost-sharing reductions that make coverage more affordable,\nand limit benefits available to individuals.\n\n \n\n17\n\n \n\n \n\nThe\nProposed Rule contains a variety of key changes to the regulations governing health insurance subject to the ACA that will impact those\nseeking to obtain health coverage through state and federal insurance marketplaces (the “Marketplace”). In this regard, the\nProposed Rule does the following:\n\n \n\n●\nAllows insurers to deny coverage to individuals who have past-due premium from prior coverage, allowing insurers to consider past due\npremium amounts as owed as the initial premium for new coverage.\n\n \n\n●\nExcludes persons who are Deferred Action for Childhood Arrivals (“DACA”) from eligibility to enroll in a health insurance\nplans offered on the Marketplace or access premium tax credits and cost-sharing reductions.\n\n \n\n●\nRequires CMS to apply a “preponderance of the evidence” standard before terminating an agent for cause as to their agreement\nwith CMS to solicit and sell Marketplace coverage.\n\n \n\n●\nEliminates the ability of an individual to certify to their income when applying for premium tax credits and cost-sharing reductions,\ninstead requiring income determinations be reconciled with tax filing or other information potentially creating coverage delays and administrative\nbarriers. In addition, if an individual does not file a Federal income tax return for two years, the individual will not be eligible\nfor premium tax credits and cost-sharing reductions.\n\n \n\n●\nInstitutes income eligibility verifications for premium tax credits and cost-sharing reductions and charges people auto-reenrolled into\nzero-premium plans a small monthly payment until they confirm their eligibility information.\n\n \n\n●\nAdjusts the automatic enrollment hierarchy for individuals.\n\n \n\n●\nShortens the annual open enrollment period from the current period, November 15 to January 15, reducing it by one month, to November\n15 to December 15.\n\n \n\n●\nRemoves the monthly special enrollment period (“SEP”) for qualified individuals who become eligible for premium tax credits\nand cost-sharing reductions because their projected household income falls to or below 150% of the federal poverty level, which means\nthat these individuals will have to wait before they can access premium tax credits and cost sharing reductions.\n\n \n\n●\nChanges de minimis thresholds for the actuarial value for plans subject to essential health benefits (“EHB”) requirements\nand for income-based cost-sharing reduction plan variations.\n\n \n\n●\nUpdates the annual premium adjustment percentage methodology to establish a premium growth measure that according to the Proposed Rule\nreflects premium growth in all affected markets, increasing the cost of coverage.\n\n \n\n●\nProhibiting insurance companies subject to ACA requirements from providing coverage for services related to a sex-trait modification\nas an essential health benefit.\n\n \n\nThe\nProposed Rule has not yet been enacted, and it is unclear whether it will be enacted in the future.\n\n \n\nWe\nexpect that the ACA, as well as other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage\ncriteria and in additional downward pressure on the price that we receive for any approved product. Any reduction in reimbursement from\nMedicare or other government programs may result in a similar reduction in payments from private payors. The implementation of cost containment\nmeasures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our products.\n\n \n\n18\n\n \n\n \n\nWe\nexpect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts\nthat federal and state governments will pay for healthcare products and services, which could result in reduced demand for our product\ncandidates or additional pricing pressures.\n\n \n\n**We\nare subject to stringent and changing privacy laws, regulations and standards as well as contractual obligations related to data privacy\nand security. Our actual or perceived failure to comply with such obligations could harm our reputation, subject us to significant fines\nand liability, or otherwise adversely affect our business**\n\n**or\nprospects.**\n\n \n\nWe\nare subject to data privacy and protection laws, regulations, policies and contractual obligations that apply to the collection, transmission,\nstorage, processing and use of personal information or personal data, which among other things, impose certain requirements relating\nto the privacy, security and transmission of personal information.\n\n \n\nThe\nlegislative and regulatory landscape for privacy and data protection continues to evolve in jurisdictions worldwide, and there has been\nan increasing focus on privacy and data protection issues with the potential to affect our business. Failure to comply with laws, regulations\nand other obligations governing personal information could result in enforcement actions against us, including fines, imprisonment of\ncompany officials and public censure, processing penalties, claims for damages by affected individuals, damage to our reputation and\nloss of goodwill, any of which could have a material adverse effect on our business, financial condition, results of operations or prospects.\n\n \n\nThe\nEU and UK GDPR applies extraterritorially and implements stringent operational requirements for controllers and processors of personal\ndata. For example, the EU and UK GDPR: (i) require detailed disclosures to data subjects; (ii) require disclosure of the legal basis\non which personal data is processed; (iii) make it harder to obtain valid consent for processing; (iv) require the appointment of a data\nprotection officers where sensitive personal data (i.e. health data) is processed on a large scale; (v) provide more robust rights for\ndata subjects; (vi) introduce mandatory data breach notification through the EU and in the UK; (vii) impose additional obligations when\ncontracting with service providers; and (viii) require an appropriate privacy governance framework to be implemented including policies,\nprocedures, training and data audit. The EU GDPR permits Member State derogations for certain issues and, accordingly, we are also subject\nto EU national laws relating to the processing of certain data such as genetic data, biometric data and data concerning health. Complying\nwith these numerous, complex and often changing regulations is expensive and difficult. Failure by us, or our partners or service providers,\nto comply with the EU and/or UK GDPR could result in regulatory investigations, enforcement notices and/ or fines of up to the higher\nof 20,000,000 Euros/17,500,000 GBP or up to 4% of our total worldwide annual turnover. In addition to the foregoing, any breach of privacy\nlaws or data security laws, particularly those resulting in any security incident or breach involving the misappropriation, loss or other\nunauthorized use or disclosure of sensitive or confidential patient or consumer information, could have a material adverse effect on\nour business, reputation and financial condition\n\n \n\nAs\na data controller, we are accountable for any third-party data service providers we engage to process personal data on our behalf. We\nattempt to address the associated risks by performing security assessments, detailed due diligence and regularly performing privacy and\nsecurity reviews of its vendors and requiring all such third-party providers with data access to sign agreements, including business\nassociate agreements, and where required under EU or UK law, obligating them to only process data according to our instructions and to\ntake sufficient security measures to protect such data. There is no assurance that these contractual measures and our own privacy and\nsecurity-related safeguards will protect us from the risks associated with the third-party processing, storage and transmission of such\ninformation. Any violation of data or security laws by our third-party processors could have a material adverse effect on our business\nand result in the fines and penalties outlined above. We are also subject to evolving European privacy laws on electronic marketing and\ncookies. The UK government made targeted amendments to its data protection regime in the Data (Use and Access) Act 2025, which entered\ninto force in August 2025.\n\n \n\nCompliance\nwith these and any other applicable privacy, data protection and cybersecurity laws and regulations is a rigorous and time-intensive\nprocess, and we may be required to put in place additional mechanisms ensuring compliance with new and evolving laws and regulations.\nFurther, many privacy, data protection, and cybersecurity regimes are evolving and are inconsistent across jurisdictions. If we fail,\nor are alleged to fail, to comply with any such laws or regulations, we may face regulatory inquiries, investigations, and other proceedings,\nprivate claims and litigation, and significant fines and penalties that could adversely affect our business, financial condition and\nresults of operations. In addition, states are constantly adopting new laws or amending existing laws, requiring attention to frequently\nchanging regulatory requirements.\n\n \n\n19\n\n \n\n \n\nPrivacy\nand data security requirements are also either in place or underway in the United States. There are a broad variety of data protection\nlaws that may be applicable to our activities, and a range of enforcement agencies at both the state and federal levels that can review\ncompanies for privacy and data security concerns based on general consumer protection laws. The Federal Trade Commission and state attorneys\ngeneral can all be aggressive in reviewing privacy and data security protections for consumers. New laws also are being considered or\nhave been implemented at both the state and federal levels. For example, the California Consumer Privacy Act of 2018, or the CCPA, which\nbecame effective on January 1, 2020, requires companies that process information on California residents to make new disclosures to consumers\nabout their data collection, use and sharing practices, provides such individuals with new data privacy rights (including the ability\nto opt out of certain disclosures of personal information), imposes new operational requirements for covered businesses, provides a private\nright of action for data breaches and creates a statutory damages framework. Virginia became the second state to adopt a comprehensive\nprivacy legislation on March 2, 2021 with enactment of the Virginia Consumer Data Protection Act. Many other states are considering similar\nlegislation, and a broad range of legislative measures also have been introduced at the federal level. Although there are limited exemptions\nfor clinical trial data under the CCPA, the CCPA and other similar laws could impact our business activities depending on how it is interpreted\nand exemplifies the vulnerability of our business to the evolving regulatory environment related to personal data.\n\n \n\nAdditionally,\nregulations promulgated pursuant to the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, as amended, establish\nprivacy and security standards that limit the use and disclosure of individually identifiable health information, or protected health\ninformation, and require the implementation of administrative, physical and technological safeguards to protect the privacy of protected\nhealth information and ensure the confidentiality, integrity and availability of electronic protected health information. These provisions\nmay be applicable to our business or that of our collaborators, service providers, contractors or consultants. Determining whether protected\nhealth information has been handled in compliance with applicable privacy standards and our contractual obligations can be complex and\nmay be subject to changing interpretation. If we are unable to properly protect the privacy and security of protected health information,\nwe could be found to have violated these privacy and security laws and/or breached certain contracts with our business partners (including\nas a business associate). Further, if we fail to comply with applicable privacy laws, such as, to the extent applicable, HIPAA privacy\nand security standards, we could face significant civil and criminal penalties. In the United States, the Department of Health and Human\nServices’ and state attorney’s general enforcement activity can result in financial liability and reputational harm, and\nresponses to such enforcement activity can consume significant internal resources. In addition, state attorneys general are authorized\nto bring civil actions seeking either injunctions or damages in response to violations that threaten the privacy of state residents.\nWe cannot be sure how these regulations will be interpreted, enforced or applied to our operations. In addition to the risks associated\nwith enforcement activities and potential contractual liabilities, our ongoing efforts to comply with evolving laws and regulations at\nthe federal and state level may be costly and require ongoing modifications to our policies, procedures and systems.\n\n \n\nGiven\nthe breadth and depth of changes in data protection obligations, preparing for and complying with the GDPR, CCPA and other similar law\nrequirements are rigorous and time-intensive and require significant resources and a review of our technologies, systems and practices,\nas well as those of any third-party collaborators, service providers, contractors or consultants that process or transfer personal data.\nChanges involving the GDPR, CCPA or other laws or regulations associated with the enhanced protection of certain types of sensitive data,\nsuch as healthcare data or other personal information from our clinical trials, could require us to change our business practices and\nput in place additional compliance mechanisms, may interrupt or delay our development, regulatory and commercialization activities and\nincrease our cost of doing business, and could expose us to government enforcement actions, regulatory investigations, private litigation\nand significant fines, penalties and remediation costs and could have a material adverse effect on our business, financial condition\nor results of operations. Additionally, any failure by our third-party collaborators, service providers, contractors or consultants to\ncomply with applicable law, regulations or contractual obligations related to data privacy or security could result in proceedings against\nus by governmental entities or others, fines, reputational harm and other liabilities.\n\n \n\n20\n\n \n\n \n\nWe\nmay publish privacy policies and other documentation regarding our collection, processing, use and disclosure of personal information\nand/or other confidential information. Although we endeavor to comply with our published policies and other documentation, we may at\ntimes fail to do so or may be perceived to have failed to do so. Moreover, despite our efforts, we may not be successful in achieving\ncompliance if our employees or vendors fail to comply with our published policies and documentation. Such failures can subject us to\npotential foreign, local, state and federal action if they are found to be deceptive, unfair, or misrepresentative of our actual practices.\nMoreover, subjects about whom we or our partners obtain information, as well as the providers who share this information with us, may\ncontractually limit our ability to use and disclose the information. Claims that we have violated individuals’ privacy rights or\nfailed to comply with data protection laws or applicable privacy notices even if we are not found liable, could be expensive and time-consuming\nto defend and could result in adverse publicity that could harm our business.\n\n \n\nIt\nis possible that new and existing laws may be interpreted and applied in a manner that is inconsistent with our practices and our efforts\nto comply with the evolving data protection rules may be unsuccessful. If so, this could result in government-imposed or court–imposed\nfines, or penalties or orders requiring that we change our practices, which could adversely affect our business. We must devote significant\nresources to understanding and complying with this changing landscape. Failure to comply with local and foreign laws, including US federal\nand state laws regarding privacy and security of personal information could expose us to government-imposed fines and penalties under\nsuch laws, penalties or orders requiring that we change our practices, claims for damages or other liabilities, regulatory investigations\nand enforcement actions, litigation and significant costs for remediation, reputational harm, diminished profits and earnings, additional\nreporting requirements and/or oversight, any of which could adversely affect our business, our results of operations or prospects. We\nalso face a threat of consumer class actions related to these laws and the overall protection of personal data. Even if we are not determined\nto have violated these laws, government or court investigations into these issues typically require the expenditure of significant resources\nand generate negative publicity. Any of the foregoing could have a materially adverse effect on our reputation and our business, financial\ncondition, results of operations or prospects.\n\n \n\n**We\nare subject to the U.K. Bribery Act, the U.S. Foreign Corrupt Practices Act and other anti-corruption laws, as well as export control\nlaws, import and customs laws, trade and economic sanctions laws and other laws governing our operations.**\n\n \n\nOur\noperations are subject to anti-corruption laws, including the U.K. Bribery Act 2010, or the U.K. Bribery Act, the U.S. Foreign Corrupt\nPractices Act of 1977, or the FCPA, the U.S. domestic bribery statute contained in 18 §201, the U.S. Travel Act 1961, and other\nanti-corruption laws that apply in countries where we do business. The U.K. Bribery Act 2010, the FCPA and these other laws generally\nprohibit us and our employees and intermediaries from authorizing, promising, offering, or providing, directly or indirectly, improper\nor prohibited payments, or anything else of value, to government officials or other persons to obtain or retain business or gain some\nother business advantage. Under the U.K. Bribery Act 2010, we may also be liable for failing to prevent a person associated with us from\ncommitting a bribery offense. We and our commercial partners operate in a number of jurisdictions that pose a high risk of potential\nU.K. Bribery Act or FCPA violations, and we participate in collaborations and relationships with third parties whose corrupt or illegal\nactivities could potentially subject us to liability under the U.K. Bribery Act, FCPA or local anti-corruption laws, even if we do not\nexplicitly authorize or have actual knowledge of such activities. In addition, we cannot predict the nature, scope or effect of future\nregulatory requirements to which our international operations might be subject or the manner in which existing laws might be administered\nor interpreted.\n\n \n\nWe\nare also subject to other laws and regulations governing our international operations, including regulations administered by the governments\nof the United Kingdom and the United States, and authorities in the European Union, including applicable export control regulations,\neconomic sanctions and embargoes on certain countries and persons, anti-money laundering laws, import and customs requirements and currency\nexchange regulations, collectively referred to as the Trade Control laws.\n\n \n\nThere\nis no assurance that we will be completely effective in ensuring our compliance with all applicable anti-corruption laws, including the\nU.K. Bribery Act, the FCPA or other legal requirements, including Trade Control laws. If we are not in compliance with the U.K. Bribery\nAct, the FCPA and other anti-corruption laws or Trade Control laws, we may be subject to criminal and civil penalties, disgorgement and\nother sanctions and remedial measures, and legal expenses, which could have an adverse impact on our business, financial condition, results\nof operations and liquidity. Likewise, any investigation of any potential violations of the U.K. Bribery Act, the FCPA, other anti-corruption\nlaws or Trade Control laws by United Kingdom, United States or other authorities could also have an adverse impact on our reputation,\nour business, results of operations and financial condition.\n\n \n\n21\n\n \n\n \n\n**Our\nrelationships with customers, physicians and third-party payors will be subject, directly or indirectly, to federal and state healthcare\nfraud and abuse laws, false claims laws, health information privacy and security laws and other healthcare laws and regulations. If we\nare found in violation of these laws and regulations, we may be required to pay a penalty or be suspended from participation in federal\nor state healthcare programs, which may adversely affect our business, financial condition and results of operations.**\n\n \n\nIf\nwe obtain FDA approval for our product candidates and begin commercializing them in the United States, our operations will be directly,\nor indirectly through our prescribers, customers and purchasers, subject to various federal and state fraud and abuse laws and regulations,\nincluding, without limitation, the federal Anti-Kickback Statute, the federal civil and criminal false claims laws and Physician Payments\nSunshine Act of 2010 and regulations. These laws will impact, among other things, our proposed sales, marketing and educational programs.\nIn addition, we may be subject to patient privacy laws by both the U.S. federal government and the states in which we conduct our business.\nThe laws that will affect our operations include, but are not limited to:\n\n \n\n \n●\nthe\nfederal Anti-Kickback Statute, which prohibits, among other things, persons or entities from knowingly and willfully soliciting,\nreceiving, offering or paying any remuneration (including any kickback, bribe or rebate), directly or indirectly, overtly or covertly,\nin cash or in kind, in return for either the referral of an individual, or the purchase, leasing, furnishing or arranging for the\npurchase, lease or order of a good, facility, item or service reimbursable under a federal healthcare program, such as the Medicare\nand Medicaid programs. This statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on the one\nhand, and prescribers, purchasers and formulary managers on the other. The PPACA amended the intent requirement of the federal Anti-Kickback\nStatute, such that a person or entity no longer needs to have actual knowledge of this statute or specific intent to violate it;\n\n \n \n \n\n \n●\nfederal\ncivil and criminal false claims laws and civil monetary penalty laws which prohibit, among other things, individuals or entities\nfrom knowingly presenting, or causing to be presented, claims for payment or approval from Medicare, Medicaid or other government\npayors that are false or fraudulent. The PPACA provides, and recent government cases against pharmaceutical and medical device manufacturers\nsupport the view that federal Anti-Kickback Statute violations and certain marketing practices, including off-label promotion, may\nimplicate the False Claims Act of 1863;\n\n \n \n \n\n \n●\nthe\nfederal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created new federal criminal statutes that prohibit,\namong other things, a person from knowingly and willfully executing a scheme or from making false or fraudulent statements to defraud\nany healthcare benefit program, regardless of the payor (e.g., public or private);\n\n \n \n \n\n \n●\nHIPAA\n(as amended by the Health Information Technology for Economic and Clinical Health Act of 2009), and their implementing regulations,\nwhich impose certain requirements relating to the privacy, security and transmission of individually identifiable health information\nwithout appropriate authorization by entities subject to the rule, such as health plans, health care clearinghouses and health care\nproviders, and their respective business associates that perform certain functions or activities that involve the use or disclosure\nof protected health information on their behalf;\n\n \n \n \n\n \n●\nfederal\ntransparency laws, including the federal Physician Payment Sunshine Act, that require certain manufacturers of drugs, devices, biologics\nand medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with\nspecific exceptions, to report annually to the CMS information related to: (i) payments or other “transfers of value”\nmade to physicians and teaching hospitals and (ii) ownership and investment interests held by physicians and their immediate family\nmembers;\n\n \n \n \n\n \n●\nfederal\nconsumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm\nconsumers; and\n\n \n \n \n\n \n●\nstate\nand foreign law equivalents of each of the above federal laws, state and local laws that require drug manufacturers to report information\nrelated to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures, and state\nand foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each\nother in significant ways and may not have the same effect, thus complicating compliance efforts.\n\n \n\n22\n\n \n\n \n\nEfforts\nto ensure that our business arrangements with third parties will comply with applicable healthcare laws and regulations will involve\nsubstantial costs. Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available, it\nis possible that some of our business activities could be subject to challenge under one or more of such laws. It is possible that governmental\nauthorities will conclude that our business practices may not comply with current or future statutes, regulations or case law involving\napplicable fraud and abuse or other healthcare laws and regulations. If our operations are found to be in violation of any of these laws\nor any other governmental regulations that may apply to us, we may be subject to significant criminal, civil and administrative sanctions\nincluding monetary penalties, damages, fines, disgorgement, individual imprisonment, and exclusion from participation in government funded\nhealthcare programs, such as Medicare and Medicaid, additional reporting requirements and oversight if we become subject to a corporate\nintegrity agreement or similar agreement to resolve allegations of non-compliance with these laws, reputational harm, and we may be required\nto curtail or restructure our operations, any of which could adversely affect our ability to operate our business and our results of\noperations.\n\n \n\nThe\nrisk of our being found in violation of these laws is increased by the fact that many of them have not been fully interpreted by the\nregulatory authorities or the courts, and their provisions are open to a variety of interpretations. Any action against us for violation\nof these laws, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management’s\nattention from the operation of our business. The shifting compliance environment and the need to build and maintain robust and expandable\nsystems to comply with multiple jurisdictions with different compliance and/or reporting requirements increases the possibility that\na healthcare company may run afoul of one or more of the requirements.\n\n \n\n**If\nwe fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur\nsubstantial costs.**\n\n \n\nWe\nare subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures and the\ngeneration, handling, use, storage, treatment, manufacture, transportation and disposal of, and exposure to, hazardous materials and\nwastes, as well as laws and regulations relating to occupational health and safety. We contract with third parties that conduct operations\non our behalf that involve the use of hazardous and flammable materials, including chemicals and biologic materials. Our contractors\nalso produce and dispose of hazardous waste products. We cannot eliminate the risk of contamination or injury from these materials. In\nthe event of contamination or injury resulting from our contractors’ use of hazardous materials, we could be held liable for any\nresulting damages and any liability could exceed our resources, and our clinical trials or regulatory approvals could be suspended. We\nalso could incur significant costs associated with civil or criminal fines and penalties. Our third-party contractors may not carry specific\nbiological or hazardous waste insurance coverage, and their property, casualty and general liability insurance policies specifically\nexclude coverage for damages and fines arising from biological or hazardous waste exposure or contamination.\n\n \n\nAlthough\nwe maintain workers’ compensation insurance for certain costs and expenses that we may incur due to injuries to our employees resulting\nfrom the use of hazardous materials or other work-related injuries, this insurance may not provide adequate coverage against potential\nliabilities. We do not maintain insurance for toxic tort claims that may be asserted against us in connection with our storage or disposal\nof biologic, hazardous or radioactive materials.\n\n \n\nIn\naddition, we may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations,\nwhich have tended to become more stringent over time. These current or future laws and regulations may impair our research, development\nor production efforts. Failure to comply with these laws and regulations also may result in substantial fines, penalties or other sanctions\nor liabilities, which could adversely affect our business, financial condition, results of operations and prospects.\n\n \n\n23\n\n \n\n \n\n**Computer\nsystem failures, cyber-attacks or deficiencies in our, or related parties’, cyber security could result in a material disruption\nof our product development programs, compromise sensitive information related to our business or trigger contractual and legal obligations,\nany of which could potentially expose us to liability or reputational harm or otherwise adversely affect our business and financial results.**\n\n \n\nWe\nhave implemented our security measures designed to protect the information (including but not limited to intellectual property, proprietary\nbusiness information and personal information) in our possession, custody or control. Our internal computer systems and those of current\nand future third parties (such as vendors, CROs, collaborators or others) on which we rely may fail and are vulnerable to breakdown,\nbreach, interruption or damage from computer viruses, computer hackers, malicious code, employee error or malfeasance, theft or misuse,\ndenial-of-service attacks, sophisticated nation-state and nation-state-supported actors, unauthorized access, natural disasters, terrorism,\nwar, telecommunication and electrical failures or other compromise. Despite our security practices, there is a risk that we may be subject\nto phishing and other cyberattacks in the future. The risk of a security breach or disruption, particularly through cyber-attacks or\ncyber intrusion, including by computer hackers, foreign governments and cyber terrorists, has generally increased as the number, intensity\nand sophistication of attempted attacks and intrusions from around the world have increased.\n\n \n\nWe\nmay not be able to anticipate all types of security threats, and we may not be able to implement preventive measures effective against\nall such security threats. The techniques used by cyber criminals change frequently, may not be recognized until launched, and can originate\nfrom a wide variety of sources, including outside groups such as external service providers, organized crime affiliates, terrorist organizations\nor hostile foreign governments or agencies. Our information technology and other internal infrastructure systems, including corporate\nfirewalls, servers, leased lines and connection to the Internet, face the risk of systemic failure that could disrupt our operations.\nIf such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our development\nprograms and our business operations. For example, the loss of clinical trial data from completed or future clinical trials could result\nin delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. Likewise, we rely\non third parties for the manufacture of our product candidates or any future product candidates and to conduct clinical trials, and similar\nevents relating to their computer systems could also have a material adverse effect on our business.\n\n \n\nTo\nthe extent that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or inappropriate\nuse, disclosure of or access to confidential or proprietary information, we could incur liability, our competitive position could be\nharmed and the further development and commercialization of our product candidates or any future product candidates could be hindered\nor delayed. If we were to experience a significant cybersecurity breach of our information systems or data, the costs associated with\nthe investigation, remediation and potential notification of the breach to counterparties, data subjects, regulators or others could\nbe material. In addition, our remediation efforts may not be successful. Moreover, if the information technology systems of our vendors,\nCROs, collaborators or other contractors or consultants become subject to disruptions or security breaches, we may have insufficient\nrecourse against such third parties and we may have to expend significant resources to mitigate the impact of such an event, and to develop\nand implement protections to prevent future events of this nature from occurring. If we do not allocate and effectively manage the resources\nnecessary to build and sustain the proper technology and cybersecurity infrastructure, we could suffer significant business disruption,\nincluding transaction errors, supply chain or manufacturing interruptions, processing inefficiencies, data loss or the loss of or damage\nto intellectual property or other proprietary information. Furthermore, any such event that leads to unauthorized access, use, or disclosure\nof personal information, including personal information regarding clinical trial participants or employees, could harm our reputation,\ncompel us to comply with federal and/or state breach notification laws and foreign law equivalents, cause us to breach our contractual\nobligations, subject us to mandatory corrective action, and otherwise subject us to liability under laws, regulations and contracts that\nprotect the privacy and security of personal information, which could result in significant legal and financial exposure and reputational\ndamages. As cyber threats continue to evolve, we may be required to incur significant additional expenses in order to enhance our protective\nmeasures or to remediate any information security vulnerability.\n\n \n\nThe\nfinancial exposure from the events referenced above could either not be insured against or not be fully covered through any insurance\nthat we maintain. There can be no assurance that the limitations of liability in our contracts would be enforceable or adequate or would\notherwise protect us from liabilities or damages as a result of the events referenced above.\n\n \n\n24\n\n \n\n \n\n**Risks\nRelated to the Ownership of Our Securities**\n\n \n\n**The\nprices of our ordinary shares may be volatile and fluctuate substantially, which could result in substantial losses for holders of our\nordinary shares.**\n\n \n\nThe\nmarket price of our ordinary shares on the NASDAQ Capital Market may be volatile and fluctuate substantially. The stock market in general\nand the market for smaller pharmaceutical and biotechnology companies in particular have experienced extreme volatility that has often\nbeen unrelated to the operating performance of particular companies. As a result of this volatility, holders of our ordinary shares may\nnot be able to sell their ordinary shares at or above the price at which they were purchased. The market price for ordinary shares may\nbe influenced by many factors, including:\n\n \n\n \n●\nthe\nsuccess of competitive products or technologies;\n\n \n \n \n\n \n●\nresults\nof clinical trials of urcosimod, OK-201 and any other future product candidate that we develop;\n\n \n \n \n\n \n●\nresults\nof clinical trials of product candidates of our competitors;\n\n \n \n \n\n \n●\nchanges\nor developments in laws or regulations applicable to urcosimod, OK-201 and any other future product candidates that we develop;\n\n \n \n \n\n \n●\nour\nentry into, and the success of, any collaboration agreements with third parties;\n\n \n \n \n\n \n●\ndevelopments\nor disputes concerning patent applications, issued patents or other proprietary rights;\n\n \n \n \n\n \n●\nthe\nrecruitment or departure of key personnel;\n\n \n \n \n\n \n●\nthe\nlevel of expenses related to any of our product candidates or clinical development programs;\n\n \n \n \n\n \n●\nthe\nresults of our efforts to discover, develop, acquire or in-license additional product candidates, products or technologies;\n\n \n \n \n\n \n●\nactual\nor anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts;\n\n \n \n \n\n \n●\nvariations\nin our financial results or those of companies that are perceived to be similar to us;\n\n \n \n \n\n \n●\nmarket\nconditions in the biotechnology and pharmaceutical sectors;\n\n \n \n \n\n \n●\ngeneral\neconomic, industry and market conditions;\n\n \n \n \n\n \n●\nthe\ntrading volume of our ordinary shares on the NASDAQ Capital Market; and\n\n \n \n \n\n \n●\nthe\nother factors described in this “Risk Factors” section\n\n \n\n25\n\n \n\n \n\n**The\nrights of our shareholders may differ from the rights typically offered to shareholders of a U.S. corporation.**\n\n \n\nWe\nare incorporated under the laws of Guernsey. The rights of holders of ordinary shares and, therefore, certain of the rights of any potential\nfuture holders of our ordinary shares, are governed by the laws of Guernsey, including the provisions of the Companies Law (Guernsey)\n2008, and by our Memorandum and Articles of Incorporation, or Articles. These rights differ in certain respects from the rights of shareholders\nin typical U.S. corporations. See “Description of Share Capital and Memorandum and Articles of Incorporation —-Differences\nin Corporate Law” in this report for a description of the principal differences between the provisions of the Guernsey Companies\nLaw applicable to us and, for example, the Delaware General Corporation Law relating to stockholders’ rights and protections.\n\n \n\n**If\nwe engage in future acquisitions or strategic partnerships, this may increase our capital requirements, dilute our shareholders, cause\nus to incur debt or assume contingent liabilities and subject us to other risks.**\n\n \n\nWe\nintend to continue to evaluate various acquisitions and strategic partnerships, including licensing or acquiring complementary drugs,\nintellectual property rights, technologies or businesses. Any potential acquisition or strategic partnership may entail numerous risks,\nincluding:\n\n \n\n \n●\nincreased\noperating expenses and cash requirements;\n\n \n \n \n\n \n●\nthe\nassumption of additional indebtedness or contingent liabilities;\n\n \n \n \n\n \n●\nassimilation\nof operations, intellectual property and drugs of an acquired company, including difficulties associated with integrating new personnel;\n\n \n \n \n\n \n●\nthe\ndiversion of our management’s attention from our existing drug programs and initiatives in pursuing such a strategic partnership,\nmerger or acquisition;\n\n \n \n \n\n \n●\nretention\nof key employees, the loss of key personnel and uncertainties in our ability to maintain key business relationships;\n\n \n \n \n\n \n●\nrisks\nand uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing\ndrugs or drug candidates and regulatory approvals; and\n\n \n \n \n\n \n●\nour\ninability to generate revenue from acquired technology and/or drugs sufficient to meet our objectives in undertaking the acquisition\nor even to offset the associated acquisition and maintenance costs.\n\n \n\n26\n\n \n\n \n\n**As\na Foreign Private Issuer (‘FPI’), we are exempt from a number of rules under the U.S. securities laws and are permitted to\nfile less information with the SEC than U.S. public companies.**\n\n \n\nWe\nare an FPI, as defined in the SEC rules and regulations and, consequently, we are not subject to all of the disclosure requirements applicable\nto companies organized within the United States. For example, we are exempt from certain rules under the Exchange Act, that regulate\ndisclosure obligations and procedural requirements related to the solicitation of proxies, consents or authorizations applicable to a\nsecurity registered under the Exchange Act. In addition, our officers and directors are exempt from the reporting and “short-swing”\nprofit recovery provisions of Section 16 of the Exchange Act and related rules with respect to their purchases and sales of our securities.\nMoreover, we are not required to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. public\ncompanies. We are also not required to file financial statements prepared in U.S. GAAP, to comply with Regulation FD and the proxy rules.\nAccordingly, there may be less publicly available information concerning our company than there is for U.S. public companies.\n\n \n\nAs\nan FPI, we will file an annual report on Form 20-F within four months of the close of each fiscal year ended March 31 and reports on\nForm 6-K relating to certain material events promptly after we publicly announce these events. However, because of the above exemptions\nfor FPIs, our ordinary share holders will not be afforded the same protections or information generally available to investors holding\nshares in public companies organized in the United States.\n\n \n\n**While\nwe are an FPI, we are not subject to certain NASDAQ corporate governance rules applicable to U.S. listed companies.**\n\n \n\nWe\nare entitled to rely on a provision in NASDAQ’s corporate governance rules that allows us to follow the laws of Guernsey with regard\nto certain aspects of corporate governance. This allows us to follow certain corporate governance practices that differ in significant\nrespects from the corporate governance requirements applicable to U.S. companies listed on NASDAQ.\n\n \n\nFor\nexample, we have elected to rely on the exemption allowing us to follow the laws of Guernsey instead of NASDAQ regulations that require\na listed U.S. company to (i) have a majority of the board of directors consist of independent directors, (ii) require non-management\ndirectors to meet on a regular basis without management present and (iii) promptly disclose any waivers of the code for directors or\nexecutive officers that should address certain specified items.\n\n \n\nIn\naccordance with our NASDAQ listing, our audit, risk and disclosure committee are required to comply with the provisions of Section 301\nof the Sarbanes-Oxley Act and Rule 10A-3 of the Exchange Act, both of which are also applicable to NASDAQ-listed U.S. companies. Because\nwe have elected to rely on the exemption allowing us to follow the laws of Guernsey, however, our audit, risk and disclosure committee\nis not subject to additional NASDAQ requirements applicable to listed U.S. companies, including an affirmative determination that all\nmembers of the audit, risk and disclosure committee are “independent,” using more stringent criteria than those applicable\nto us as an FPI. Furthermore, NASDAQ’s corporate governance rules require listed U.S. companies to, among other things, seek shareholder\napproval for the implementation of certain equity compensation plans and issuances of ordinary shares, however as an FPI, we may elect\nto follow the rules applicable to companies admitted to listing on the Main Market of the London Stock Exchange in lieu of these NASDAQ\nrequirements.\n\n \n\n**We\nmay lose our FPI status, which would then require us to comply with the Exchange Act’s domestic reporting regime and cause us to\nincur significant legal, accounting and other expenses.**\n\n \n\nAs\nan FPI, we are not required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act applicable\nto U.S. domestic issuers. We may no longer be an FPI as early as September 30, 2026 (the end of our second fiscal quarter in the fiscal\nyear following this filing), which would require us to comply with all of the periodic disclosure and current reporting requirements\nof the Exchange Act applicable to U.S. domestic issuers as of March 31, 2026. In order to maintain our current status as an FPI, either\n(a) a majority of our outstanding voting securities must be either directly or indirectly owned of record by non-residents of the United\nStates or (b)(i) a majority of our executive officers or directors cannot be U.S. citizens or residents, (ii) more than 50% of our assets\nmust be located outside the United States and (iii) our business must be administered principally outside the United States. If we lose\nour status as an FPI, we would be required to comply with the Exchange Act reporting and other requirements applicable to U.S. domestic\nissuers, which are more detailed and extensive than the requirements for FPIs. We may also be required to make changes in our corporate\ngovernance practices in accordance with various SEC and NASDAQ rules. The regulatory and compliance costs to us under U.S. securities\nlaws if we are required to comply with the reporting requirements applicable to a U.S. domestic issuer may be significantly higher than\nthe cost we would incur as an FPI. As a result, we expect that a loss of FPI status would increase our legal and financial compliance\ncosts and is likely to make some activities highly time consuming and costly. We also expect that if we were required to comply with\nthe rules and regulations applicable to U.S. domestic issuers, it would make it more difficult and expensive for us to obtain director\nand officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage.\nThese rules and regulations could also make it more difficult for us to attract and retain qualified members of our board of directors.\n\n \n\n27\n\n \n\n \n\n**We\nare an emerging growth company (EGC) within the meaning of the Securities Act of 1933, or the Securities Act, and will take advantage\nof certain reduced reporting requirements.**\n\n \n\nWe\nare an EGC, as defined in the Jumpstart Our Business Startups (JOBS) Act, 2012). For as long as we continue to be an EGC, we may take\nadvantage of exemptions from various reporting requirements that are applicable to other public companies that are not EGCs, including\nnot being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, or Section 404, exemptions\nfrom the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute\npayments not previously approved. As an EGC, we are required to report only two years of financial results and selected financial data\ncompared to three and five years, respectively, for comparable data reported by other public companies. We may take advantage of these\nexemptions until we are no longer an EGC. We could be an EGC for up to five years, although circumstances could cause us to lose that\nstatus earlier, including if the aggregate market value of our ordinary shares s held by non-affiliates exceeds $700 million as of any\nSeptember 30 (the end of our second fiscal quarter) before that time, in which case we would no longer be an EGC as of the following\nMarch 31 (our fiscal year-end). We cannot predict if investors will find our ordinary shares less attractive because we may rely on these\nexemptions. If some investors find our ordinary shares less attractive as a result, there may be a less active trading market for our\nordinary shares and the price of our ordinary shares may be more volatile in the event that we decide to make an offering of our ordinary\nshares.\n\n \n\n**If\nwe fail to establish and maintain proper internal controls, our ability to produce accurate financial statements or comply with applicable\nregulations could be impaired.**\n\n \n\nSection\n404(a) of the Sarbanes-Oxley Act, or Section 404(a), requires that beginning with our second annual report following our IPO, management\nassesses and report annually on the effectiveness of our internal control over financial reporting and identify any material weaknesses\nin our internal control over financial reporting. Although Section 404(b) of the Sarbanes-Oxley Act, or Section 404(b), requires our\nindependent registered public accounting firm to issue an annual report that addresses the effectiveness of our internal control over\nfinancial reporting, we have opted to rely on the exemptions provided in the JOBS Act, and consequently will not be required to comply\nwith SEC rules that implement Section 404(b) until such time as we are no longer an EGC.\n\n \n\nPursuant\nto Section 404, we will be required to furnish a report by our senior management on our internal control over financial reporting. However,\nwhile we remain an EGC, we will not be required to include an attestation report on internal control over financial reporting issued\nby our independent registered public accounting firm. To prepare for eventual compliance with Section 404, once we no longer qualify\nas an EGC, we will be engaged in a process to document and evaluate our internal control over financial reporting, which is both costly\nand challenging. The presence of material weaknesses could result in financial statement errors which, in turn, could lead to errors\nin our financial reports, delays in our financial reporting, which could require us to restate our operating results or our auditors\nmay be required to issue a qualified audit report. We might not identify one or more material weaknesses in our internal controls in\nconnection with evaluating our compliance with Section 404 (a). In order to establish, maintain and improve the effectiveness of our\ndisclosure controls and procedures and internal control over financial reporting, we will need to expend significant resources and provide\nsignificant management oversight.\n\n \n\nImplementing\nany appropriate changes to our internal control may require specific compliance training of our directors and employees, entail substantial\ncosts in order to modify our existing accounting systems, take a significant period of time to complete and divert management’s\nattention from other business concerns. These changes may not, however, be effective in maintaining the adequacy of our internal control.\n\n \n\nIf\neither we are unable to conclude that we have effective internal control over financial reporting or, at the appropriate time, our independent\nauditors are unwilling or unable to provide us with an unqualified report on the effectiveness of our internal control over financial\nreporting as required by Section 404(b), then in the event we have decided to make an offering of our ordinary shares, investors may\nlose confidence in our operating results, the price of our ordinary shares could decline and we may be subject to litigation or regulatory\nenforcement actions. In addition, if we are unable to meet the requirements of Section 404, we may not be able to remain listed on NASDAQ.\n\n \n\n28\n\n \n\n \n\n**We\nwill incur significant increased costs as a result of operating as a company that publicly listed on NASDAQ in the United States, and\nour management will be required to devote substantial time to new compliance initiatives.**\n\n \n\nAs\na U.S. public company, and particularly after we no longer qualify as an EGC, we will incur significant legal, accounting and other expenses\nthat we did not incur previously. The Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 1987, the\nlisting requirements of NASDAQ and other applicable securities rules and regulations impose various requirements on non-U.S. reporting\npublic companies, including the establishment and maintenance of effective disclosure and financial controls and corporate governance\npractices. Our senior management and other personnel will need to devote a substantial amount of time to these compliance initiatives.\n\n \n\nMoreover,\nthese rules and regulations will increase our legal and financial compliance costs and will make some activities more time-consuming\nand costly. For example, we expect that these rules and regulations may make it more difficult and more expensive for us to obtain director\nand officer liability insurance, which in turn could make it more difficult for us to attract and retain qualified senior management\npersonnel or members for our board of directors.\n\n \n\nHowever,\nthese rules and regulations are often subject to varying interpretations, in many cases due to their lack of specificity, and, as a result,\ntheir application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result\nin continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance\npractices.\n\n \n\nPursuant\nto Section 404, we will be required to furnish a report by our senior management on our internal control over financial reporting. However,\nwhile we remain an EGC, we will not be required to include an attestation report on internal control over financial reporting issued\nby our independent registered public accounting firm. To prepare for eventual compliance with Section 404, which is required once we\nno longer qualify as an EGC, we will be engaged in a process to document and evaluate our internal control over financial reporting,\nwhich is both costly and challenging. In this regard, we will need to continue to dedicate internal resources, potentially engage outside\nconsultants and adopt a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue\nsteps to improve control processes as appropriate, validate through testing that controls are functioning as documented and implement\na continuous reporting and improvement process for internal control over financial reporting. Despite our efforts, there is a risk that\nwe will not be able to conclude, within the prescribed timeframe or at all, that our internal control over financial reporting is effective\nas required by Section 404. If we identify one or more material weaknesses, it could result in an adverse reaction in the financial markets\ndue to a loss of confidence in the reliability of our financial statements.\n\n \n\n29\n\n \n\n \n\n**Claims\nof U.S. civil liabilities may not be enforceable against us.**\n\n \n\nWe\nare incorporated under the laws of Guernsey. Certain members of our board of directors and senior management are not residents of the\nUnited States, and all or a substantial portion of our assets and the assets of such persons are located outside the United States. As\na result, it may not be possible to serve process on such persons or us in the United States or to enforce judgments obtained in U.S.\ncourts against them or us based on civil liability provisions of the securities laws of the United States. As a result, it may not be\npossible for investors to effect service of process within the United States upon such persons or to enforce judgments obtained in U.S.\ncourts against them or us, including judgments predicated upon the civil liability provisions of the U.S. federal securities laws.\n\n \n\nSee\n“Description of Share Capital and Memorandum and Articles of Incorporation—Enforcement of Civil Liabilities.” Additionally,\nit may be difficult to assert securities law claims in actions originally instituted outside of the United States. Foreign courts may\nrefuse to hear a securities law claim because foreign courts may not be the most appropriate forum in which to bring such a claim. Even\nif a foreign court agrees to hear a claim, it may determine that the law of the jurisdiction in which the foreign court resides, and\nnot U.S. law, is applicable to the claim. Further, if U.S. law is found to be applicable, the content of applicable U.S. law must be\nproved as a fact, which can be a time-consuming and costly process, and certain matters of procedure would still be governed by the law\nof the jurisdiction in which the foreign court resides.\n\n \n\n**The\nrights afforded to shareholders are governed by Guernsey law. Not all rights available to shareholders under English law or U.S. law\nwill be available to shareholders.**\n\n \n\nThe\nrights afforded to shareholders will be governed by Guernsey law and by our Articles, and these rights differ in certain respects from\nthe rights of shareholders in typical English companies and U.S. corporations. In particular, Guernsey law significantly limits the circumstances\nunder which shareholders of companies may bring derivative actions and, in most cases, only the corporation may be the proper claimant\nor plaintiff for the purposes of maintaining proceedings in respect of any wrongful act committed against it. Neither an individual nor\nany group of shareholders has any right of action in such circumstances. In addition, Guernsey law does not afford appraisal rights to\ndissenting shareholders in the form typically available to shareholders of a U.S. corporation.\n\n \n\n**The\ninsolvency laws of Guernsey and other jurisdictions may not be as favorable to you as the U.S. bankruptcy laws.**\n\n \n\nWe\nare incorporated under the laws of Guernsey. In the event of a bankruptcy, insolvency or similar event, proceedings could be initiated\nin Guernsey or another relevant jurisdiction. The bankruptcy, insolvency, administrative and other laws of our and our subsidiaries’\njurisdictions of organization or incorporation may be materially different from, or in conflict with, each other and those of the United\nStates, including in the areas of rights of creditors, shareholders, priority of governmental and other creditors and duration of the\nproceeding. The application of these laws, or any conflict among them, could call into question whether any particular jurisdiction’s\nlaw should apply, adversely affecting your ability to enforce your rights under the ordinary shares in those jurisdictions or limit any\namounts that you may receive.\n\n \n\n**If\nwe are a passive foreign investment company (‘PFIC’), there could be adverse U.S. federal income tax consequences to U.S.\nholders.**\n\n \n\nUnder\nthe Internal Revenue Code of 1986, or the Internal Revenue Code, we will be a PFIC for any taxable year in which (1) 75% or more of our\ngross income consists of passive income or (2) 50% or more of the average quarterly value of our assets consists of assets that produce,\nor are held for the production of, passive income. For purposes of these tests, passive income includes dividends, interest, gains from\nthe sale or exchange of investment property and certain rents and royalties. In addition, for purposes of the above calculations, a non-U.S.\ncorporation that directly or indirectly owns at least 25% by value of the shares of another corporation is treated as if it held its\nproportionate share of the assets and received directly its proportionate share of the income of such other corporation. If we are a\nPFIC for any taxable year during which a U.S. Holder (as defined below under “Certain U.S. and Guernsey Tax Considerations-Material\nU.S. Federal Income Tax Considerations for U.S. Holders”) holds our shares, the U.S. Holder may be subject to adverse tax consequences\nregardless of whether we continue to qualify as a PFIC, including ineligibility for any preferred tax rates on capital gains or on actual\nor deemed dividends, interest charges on certain taxes treated as deferred, and additional reporting requirements.\n\n \n\n30\n\n \n\n \n\nWe\ndo not believe that we were a PFIC for our taxable year ended March 31, 2026 but cannot provide any assurances regarding our PFIC status\nfor any past, current or future taxable years. The determination of whether we are a PFIC is a fact-intensive determination made on an\nannual basis applying principles and methodologies which in some circumstances are unclear and subject to varying interpretation. In\nparticular, the characterization of our assets as active or passive may depend in part on our current and intended future business plans,\nwhich are subject to change. In addition, for our current and future taxable years, the total value of our assets for PFIC testing purposes\nmay be determined in part by reference to the market price of our ordinary shares from time to time, which may fluctuate considerably.\nUnder the income test, our status as a PFIC depends on the composition of our income which will depend on the transactions we enter into\nin the future and our corporate structure. The composition of our income and assets is also affected by how, and how quickly, we spend\nthe cash we raise in any offering.\n\n \n\nIn\ncertain circumstances, a U.S. Holder of shares in a PFIC may alleviate some of the adverse tax consequences described above by making,\nwhere available, a qualified electing fund, or QEF, election to include in income its pro rata share of the corporation’s income\non a current basis or a mark-to-market election. A U.S. Holder may make a QEF election with respect to our ordinary shares only if we\nagree to furnish such U.S. Holder annually with a PFIC annual information statement as specified in the applicable U.S. Treasury Regulations.\n\n \n\nFor\nfurther discussion of the PFIC rules and the adverse U.S. federal income tax consequences in the event we are classified as a PFIC, see\nthe section of this report entitled “Certain U.S. and Guernsey Tax Considerations-Material U.S. Federal Income Considerations for\nU.S. Holders.”\n\n \n\n**A\nchange in our tax residence could have a negative effect on our future profitability.**\n\n \n\nAlthough\nwe are incorporated under the laws of Guernsey, our affairs are, and are intended to continue to be, managed and controlled in the United\nKingdom for tax purposes and therefore we are resident in the United Kingdom for U.K. and Guernsey tax purposes. It is possible that\nin the future, whether as a result of a change in law or the practice of any relevant tax authorities or as a result of any change in\nthe conduct of our affairs or for any other reason, we could become, or be regarded as having become, a resident in a jurisdiction other\nthan the United Kingdom. If we cease to be a U.K. tax resident, we may be subject to a charge to U.K. corporation tax on chargeable gains\non our assets and to unexpected tax charges in other jurisdictions on our income. Similarly, if the tax residency of any of our subsidiaries\nwere to change from their current jurisdiction for any of the reasons listed above, we may be subject to a charge to local capital gains\ntax on the assets.\n\n \n\n**We\nmay be unable to use net operating loss and tax credit carryforwards and certain built-in losses to reduce future tax payments or benefit\nfrom favorable U.K. tax legislation.**\n\n \n\nAs\na U.K. resident trading entity, we are subject to U.K. corporate taxation. Due to the nature of our business, we have generated losses\nsince inception. As of March 31, 2026, we had cumulative carryforward tax losses of $45,018,522. Subject to any relevant restrictions,\nwe expect these to be available to carry forward and offset against future operating profits. As a company that carries out extensive\nresearch and development activities, we benefit from the U.K. research and development tax credit regime for small and medium-sized companies,\nwhereby we are able to surrender the trading losses that arise from our qualifying research and development activities for a payable\ntax credit of up to 33.35% of eligible research and development expenditures. Qualifying expenditures largely comprise employment costs\nfor research staff, consumables and certain internal overhead costs incurred as part of research projects. Certain subcontracted qualifying\nresearch expenditures are eligible for a cash rebate of up to 21.67%. The majority of our pipeline research, clinical trials management\nand manufacturing development activities are eligible for inclusion within these tax credit cash rebate claims. Our ability to continue\nto claim payable research and development tax credits in the future may be limited because we may no longer qualify as a small or medium-sized\ncompany.\n\n \n\n31\n\n \n\n \n\nWe\nmay benefit in the future from the United Kingdom’s “patent box” regime, which allows certain profits attributable\nto revenues from patented products to be taxed at an effective rate of 10%. We are the exclusive licensee or owner of several patent\napplications which, if issued, would cover our product candidates, and accordingly, future upfront fees, milestone fees, product revenues\nand royalties could be taxed at this tax rate. When taken in combination with the enhanced relief available on our research and development\nexpenditures, we expect a long-term lower rate of corporation tax to apply to us. If, however, there are unexpected adverse changes to\nthe U.K. research and development tax credit regime or the “patent box” regime, or for any reason we are unable to qualify\nfor such advantageous tax legislation, or we are unable to use net operating loss and tax credit.\n\n \n\n**Changes\nand uncertainties in the tax system in the countries in which we have operations could materially adversely affect our financial condition\nand results of operations and reduce net returns to our shareholders.**\n\n \n\nOur\ntax position could be adversely impacted by changes in tax rates, tax laws, tax practice, tax treaties or tax regulations or changes\nin the interpretation thereof by the tax authorities in the United Kingdom, the United States and other jurisdictions as well as being\naffected by certain changes currently proposed by the Organization for Economic Co-operation and Development and their action plan on\nBase Erosion and Profit Shifting. Such changes may become more likely as a result of recent economic trends in the jurisdictions in which\nwe operate, particularly if such trends continue.\n\n \n\nOur\nactual effective tax rate may vary from our expectation and that variance may be material. A number of factors may increase our future\neffective tax rates, including: (1) the jurisdictions in which profits are determined to be earned and taxed; (2) the resolution of issues\narising from any future tax audits with various tax authorities; (3) changes in the valuation of our deferred tax assets and liabilities;\n(4) increases in expenses not deductible for tax purposes, including transaction costs and impairments of goodwill in connection with\nacquisitions; (5) changes in the taxation of share-based compensation; (6) changes in tax laws or the interpretation of such tax laws,\nand changes in generally accepted accounting principles; and (7) challenges to the transfer pricing policies related to our structure.\n\n \n\nA\ntax authority may disagree with tax positions that we have taken, which could result in increased tax liabilities. For example, Her Majesty’s\nRevenue & Customs, or HMRC, the U.S. Internal Revenue Service, or IRS, or another tax authority could challenge our allocation of\nincome by tax jurisdiction and the amounts paid between our affiliated companies pursuant to our intercompany arrangements and transfer\npricing policies, including methodologies for valuing developed technology and amounts paid with respect to our intellectual property\ndevelopment. Similarly, a tax authority could assert that we are subject to tax in a jurisdiction where we believe we have not established\na taxable connection, often referred to as a “permanent establishment” under international tax treaties, and such an assertion,\nif successful, could increase our expected tax liability in one or more jurisdictions.\n\n \n\nA\ntax authority may take the position that material income tax liabilities, interest and penalties are payable by us, for example where\nthere has been a technical violation of contradictory laws and regulations that are relatively new and have not been subject to extensive\nreview or interpretation, in which case we expect that we might contest such assessment. High-profile companies can be particularly vulnerable\nto aggressive application of unclear requirements. Many companies must negotiate their tax bills with tax inspectors who may demand higher\ntaxes than applicable law appears to provide. Contesting such an assessment may be lengthy and costly and if we were unsuccessful in\ndisputing the assessment, the implications could increase our anticipated effective tax rate, where applicable.\n\n \n\n**Risks\nRelated to Our Reliance on Third Parties**\n\n \n\n**We\nrely, and expect to continue to rely, on third parties to conduct our preclinical studies and clinical trials. If these third parties\ndo not successfully carry out their contractual duties or meet expected deadlines, we may not be able to obtain regulatory approval for\nor commercialize our product candidates.**\n\n \n\nWe\nhave relied upon and plan to continue to rely upon third parties, including independent clinical investigators and third-party CROs,\nto conduct our preclinical studies and clinical trials and to monitor and manage data for our ongoing preclinical and clinical programs.\nIn engaging these third parties, we typically have to, and expect to have to, negotiate budgets and contracts, which may result in delays\nto our development timelines and increases costs. Additionally, there is a limited number of qualified third-party service providers\nthat specialize or have the expertise required to achieve our business objectives, and so it may be challenging to find alternative investigators\nor CROs, or do so on commercially reasonable terms. We rely on these parties for execution of our preclinical studies and clinical trials,\nand control only certain aspects of their activities. Nevertheless, we are responsible for ensuring that each of our preclinical studies\nand clinical trials is conducted in accordance with the applicable protocol and legal, regulatory and scientific standards, and our reliance\non these third parties does not relieve us of our regulatory responsibilities. We and our third-party contractors and CROs are required\nto comply with GCP requirements, which are regulations and guidelines enforced by the FDA, the Competent Authorities of the Member States\nof the European Economic Area and comparable foreign regulatory authorities for all our product candidates in clinical development. Regulatory\nauthorities enforce these GCP requirements through periodic inspections of trial sponsors, principal investigators and clinical trial\nsites. If we fail to exercise adequate oversight over any of our CROs or if we or any of our CROs fail to comply with applicable GCP\nrequirements, the clinical data generated in our clinical trials may be deemed unreliable and the FDA, the MHRA, EMA or other regulatory\nauthorities may require us to perform additional clinical trials before approving our marketing applications. We cannot assure you that\nupon a regulatory inspection of us or our CROs or other third parties performing services in connection with our clinical trials, such\nregulatory authority will determine that any of our clinical trials complies with GCP regulations. In addition, our clinical trials must\nbe conducted with product produced under applicable cGMP regulations. Our failure to comply with these regulations may require us to\nrepeat clinical trials, which would delay the regulatory approval process.\n\n \n\n32\n\n \n\n \n\nFurther,\nthese investigators and CROs are not our employees, and we will not be able to control, other than by contract, the amount of resources,\nincluding time, which they devote to our product candidates and clinical trials. If independent investigators or CROs fail to devote\nsufficient resources to the development of our product candidates, or if their performance is substandard, it may delay or compromise\nthe prospects for approval and commercialization of our product candidates. These investigators and CROs may also have relationships\nwith other commercial entities, including our competitors, for whom they may also be conducting clinical studies or other drug development\nactivities, which could affect their performance on our behalf. In addition, the use of third-party service providers requires us to\ndisclose our proprietary information to these parties, which increases the risk that a competitor will discover them or that this information\nwill be misappropriated or disclosed.\n\n \n\nIf\nany of our relationships with these third-party CROs terminate, we may not be able to enter into arrangements with alternative CROs or\nto do so on commercially reasonable terms. If CROs do not successfully carry out their contractual duties or obligations or meet expected\ndeadlines, if they need to be replaced or if the quality or accuracy of the clinical data they obtain is compromised due to the failure\nto adhere to our clinical protocols, regulatory requirements or for other reasons, our clinical trials may be extended, delayed or terminated\nand we may not be able to obtain regulatory approval for or successfully commercialize our product candidates. As a result, our results\nof operations and commercial prospects would be harmed, our costs could increase and our ability to generate revenues could be delayed.\n\n \n\nRepeating\nclinical trials or switching or engaging additional CROs involves additional cost and requires our management’s time and focus.\nIn addition, there is a natural transition period when a clinical trial has to be repeated or when a new CRO commences work. As a result,\ndelays could occur, which could materially impact our ability to meet our desired clinical development timelines.\n\n \n\n**Our\nreliance on third parties requires us to share our trade secrets, which increases the possibility that a competitor will discover them\nor that our trade secrets will be misappropriated or disclosed.**\n\n \n\nWe\nhave engaged CROs specializing in ophthalmic drug development, to prepare and support the IND filing, and we must, at times, share our\nproprietary technology and confidential information, including trade secrets, with them. We seek to protect our proprietary technology,\nin part, by entering into confidentiality agreements and, if applicable, material transfer agreements, collaborative research agreements,\nconsulting agreements or other similar agreements with our collaborators, advisors, employees and consultants prior to beginning research\nor disclosing proprietary information. These agreements typically limit the rights of the third parties to use or disclose our confidential\ninformation. Despite the contractual provisions employed when working with third parties, the need to share trade secrets and other confidential\ninformation increases the risk that such trade secrets become known by our competitors, are inadvertently incorporated into the technology\nof others or are disclosed or used in violation of these agreements. Given that our proprietary position is based, in part, on our know-how\nand trade secrets, a competitor’s discovery of our proprietary technology and confidential information or other unauthorized use\nor disclosure of such technology or information would impair our competitive position and may have an adverse effect on our business,\nfinancial condition, results of operations and prospects.\n\n \n\nDespite\nour efforts to protect our trade secrets, our competitors may discover our trade secrets, either through breach of these agreements,\nindependent development or publication of information including our trade secrets by third parties. A competitor’s discovery of\nour trade secrets would impair our competitive position and have an adverse impact on our business, financial condition, results of operations\nand prospects.\n\n \n\n33\n\n \n\n \n\n**We\nutilize, and expect to continue to utilize, third parties to conduct our product manufacturing for the foreseeable future, and these\nthird parties may not perform satisfactorily.**\n\n \n\nWe\nwill rely on contract manufacturing organizations (CMOs) for the manufacturing of clinical batches and intend to continue to rely on\nthird parties to manufacture our preclinical study and clinical trial product supplies. If our current CMOs, or any future third-party\nmanufacturers, do not successfully carry out their contractual duties, meet expected deadlines or manufacture our product candidates\nin accordance with regulatory requirements, or if there are disagreements between us and our CMOs or any future third-party manufacturers,\nwe will not be able to complete, or may be delayed in completing, the preclinical studies required to support future investigational\nnew drug, or IND, submissions and the clinical trials required for approval of our product candidates.\n\n \n\nIn\naddition to our current CMOs, we may rely on additional third parties to manufacture ingredients of our product candidates in the future\nand to perform quality testing, and reliance on these third parties entails risks to which we would not be subject if we manufactured\nthe product candidates ourselves, including:\n\n \n\n \n●\nreduced\ncontrol for certain aspects of manufacturing activities;\n\n \n \n \n\n \n●\ntermination\nor nonrenewal of manufacturing and service agreements with third parties in a manner or at a time that is costly or damaging to us;\nand\n\n \n \n \n\n \n●\ndisruptions\nto the operations of our third-party manufacturers and service providers caused by conditions unrelated to our business or operations,\nincluding the bankruptcy of the manufacturer or service provider.\n\n \n\nAny\nof these events could lead to clinical trial delays or failure to obtain regulatory approval or impact our ability to successfully commercialize\nany of our product candidates. Some of these events could be the basis for FDA, MHRA,EMA or other regulatory authority action, including\ninjunction, recall, seizure or total or partial suspension of product manufacture.\n\n \n\n**Any\ncontamination in our manufacturing process, shortages of raw materials or failure of any of our key suppliers to deliver necessary components\ncould result in delays in our clinical development or marketing schedules.**\n\n \n\nGiven\nthe complex nature of formulating, manufacturing and packaging of clinical drugs, there is a risk of contamination. Any contamination\ncould adversely affect our ability to produce product candidates on schedule and could, therefore, harm our results of operations and\ncause reputational damage. In addition, some of the raw materials required in our manufacturing process are derived from biologic sources\nand are difficult to procure and may be subject to contamination or recall. Poor control of production processes can lead to the introduction\nof outside agents or other contaminants, or to inadvertent changes in the properties or stability of a product candidate that may not\nbe detectable in final product testing. A material shortage, contamination, recall or restriction on the use of certain chemical substances\nin the manufacture of our product candidates could adversely impact or disrupt the commercial manufacturing or the production of clinical\nmaterial, which could adversely affect our development timelines and our business, financial condition, results of operations and prospects.\n\n \n\n**To\nthe extent we rely on a third-party manufacturing facility for commercial supply, that third party will be subject to significant regulatory\noversight with respect to manufacturing our product candidates.**\n\n \n\nThe\npreparation of therapeutics for clinical trials or commercial sale is subject to extensive regulation. Components of a finished therapeutic\nproduct approved for commercial sale or used in late-stage clinical trials must be manufactured in accordance with cGMP requirements.\nThese regulations govern manufacturing processes and procedures, including record keeping, and the implementation and operation of quality\nsystems to control and assure the quality of investigational products and products approved for sale. To the extent that we utilize third-party\nfacilities for commercial supply, the third party’s facilities and quality systems must pass an inspection for compliance with\nthe applicable regulations as a condition of regulatory approval. In addition, the regulatory authorities may, at any time, audit or\ninspect the third-party manufacturing facility or the associated quality systems for compliance with the regulations applicable to the\nactivities being conducted. If, for example, these facilities do not pass a plant inspection, the FDA will not approve the applicable\nNew Drug Application (‘NDA’) or biologics license application, or BLA.\n\n \n\nWe\ndo not directly control the manufacturing of, and are completely dependent on, our CMOs for compliance with cGMP requirements. If our\nCMOs cannot successfully manufacture material that conforms to our specifications and the strict regulatory requirements of the FDA,\nthe MHRA, EMA or other regulatory authorities, they will not be able to secure and/or maintain regulatory approval for their manufacturing\nfacilities. In addition, we have no direct control over the ability of our CMOs to maintain adequate quality control, quality assurance\nand qualified personnel. Furthermore, all of our CMOs are engaged with other companies to supply and/or manufacture materials or products\nfor such companies, which exposes our CMOs to regulatory risks for the production of such materials and products. As a result, failure\nto meet the regulatory requirements for the production of those materials and products may generally affect the regulatory clearance\nof our CMOs’ facilities. Our failure, or the failure of third parties, to comply with applicable regulations could result in sanctions\nbeing imposed on us, including clinical holds, fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license\nrevocation, seizures or recalls of product candidates or products, operating restrictions and criminal prosecutions, any of which could\nsignificantly and adversely affect supplies of our products and product candidates.\n\n \n\nOur\npotential future dependence upon others for the manufacture of our product candidates may adversely affect our future profit margins\nand our ability to commercialize any products that receive regulatory approval on a timely and competitive basis."}