NASDAQ: AKTX

Background

Cancers
are the second leading cause of mortality in the United States and the leading cause of death for those under 65 years of age. The American
Cancer Society estimates that approximately 626,000 people will die of cancer in the United States in 2026.

ADCs
are a class of cancer therapies that combine the precision targeting of antibodies with payload toxins or chemotherapy that attack cancer
cells. To date, innovation in the field of ADC therapies has focused primarily on the development of novel antibodies linked to existing
classes of payload toxins and chemotherapies. For example, there is a range of approved ADCs with antibodies that target the Her2, Trop-2,
CD19, CD22, CD30, Nectin-4, Tissue Factor, and FR alpha antibodies. But there is a surprising lack of diversity in the payload toxins
to which those antibodies are linked. All of the currently approved and marketed products, and more than 90% of ADCs in late-stage clinical
development of which we are aware, utilize payloads from just two standard classes: (1) microtubule inhibitors or (2) DNA-damaging agents
such as topoisomerase I inhibitors.

Despite
the initial success of ADCs as oncology therapies, each of these payload classes has limitations in terms of delivering significant and
enduring efficacy, and manageable toxicity and tolerability for cancer patients:

●
Microtubule
Inhibitors: resistance by cancer cells after initial response, off-target toxicity to healthy tissues and cells, and limited
efficacy against static cancer cells that are not in cell division mode. In the case for an ADC therapy used in 1st
line bladder cancer, 50% of patients will relapse in ~12 months after initiation of the ADC therapy, even when used in combination
with a checkpoint inhibitor.

●
Topoisomerase
I Inhibitors: resistance by cancer cells after the initial response; off-target toxicities, that include lung scarring, gastrointestinal
and hematological/blood toxicities (including low white blood cells and platelets), and a limited ability to combine with other cancer
therapies that have overlapping toxicities. All current ADCs using this payload have either Black Box warnings or significant warnings/precautions
for severe side effects by the FDA.

Our
ADC approach centers on creating novel payloads that work through different and powerful biological mechanisms as compared to these standard
payload classes. We believe that doing so may allow us to discover and develop ADCs that solve for the known limitations outlined of
current therapies that utilize existing payload classes. However, our strategy is new and unproven, and we cannot guarantee that we will
be successful in our efforts.

Our
differentiated ADC discovery and development platform (our “ADC Platform”) enables us to generate a range of ADC product
candidates that pair our novel payloads with biologically validated antibody targets prevalent in cancer tumors. We believe that our
focus on the development of ADCs that utilize our novel payloads may allow us to develop ADCs with benefits that include:

●
more
effective cancer-killing properties, or cytotoxicity;

●
activating
the powerful immune system to harness its proven ability to kill cancer;

●
synergize
(more than additive) with other key therapies used today such as anti-PD1 and anti-PD-L1 therapies (“checkpoint inhibitors”)
to activate the immune system to potentially deliver even greater efficacy results than either agent alone;

●
greater
sustained duration and depth of efficacy response to ADC therapy to regress or eliminate the cancer;

●
reduced
tumor resistance; and

●
improved
safety and tolerability relative to the current ADCs available.

Our
lead payload, PH1, derives its 1) cytotoxic and 2) immune activating properties from its ability to disrupt the function of spliceosomes,
which play a critical role in protein synthesis. In addition to the cytotoxic or cell killing properties of the PH1 payload, we have
observed in preclinical studies that PH1 triggers an immune response that leads to additional cancer cell killing via the activation
B-cells and T-cells through neoantigen formation on the cancer cell. We believe this dual 1-2 mode of action of tumor killing by PH1
is differentiated from current standard ADC payloads used today and suggests that PH1 presents a unique approach to immuno-oncology ADC
therapies moving forward.

Our
lead product candidate is AKTX-101, a preclinical Trop-2–targeting ADC that combines PH1 with a proprietary non-cleavable
linker and antibody construct. We are developing AKTX-101 as a potential best-in-class Trop-2 ADC based on preclinical
differentiation described in this Annual Report on Form 10-K and our public scientific updates. Trop-2 is an antigen target
expressed in several solid tumor cancers with significant unmet need, including lung, breast, bladder, gastric, head and neck,
pancreatic, and others. Given the wide expression of Trop-2, AKTX-101 as the potential to address a wide range of cancers affecting
hundreds of thousands of patients globally.

In
addition, we have expanded our PH1-based pipeline with AKTX-102, a CEACAM5-directed ADC program that combines a novel CEACAM5-targeting
antibody construct with PH1, reflecting the scope of our research capabilities, and the potential of our PH1 payload to be designed into
novel ADC candidates. and ADC design capabilities while we prioritize resources on the lead program.

Our
Strategy

We
aim to create more effective ADC cancer therapies for patients that aim to arrest and destroy cancer by leveraging our payload
biology and chemistry expertise to harness the power of the immune system to create potentially superior ADC therapies for cancer
patients. We intend to leverage the core capabilities of our experienced team in cancer biology and chemistry, as well as
experienced senior leadership in the oncology field to advance our novel ADC payload and resulting ADC candidates.

3

Our
approach is focused on three key areas:

●
Advance
AKTX-101 to a potential initiation of a first-in-human (“FIH”) Phase 1 trial to establish its safety and
potential clinical activity. AKTX-101 has demonstrated its robust efficacy and safety in several preclinical models to date.
We intend to focus on defining the tumor strategy that drives the fastest and most efficient strategy for development and approval
while maximizing the future commercial opportunity as part of this. We will continue developing additional preclinical data to support
this strategy, developing a high-quality Good-Manufacturing Practice (GMP) product supply, and complete formal non-clinical and toxicology
studies needed to support a future IND or other regulatory submission(s) required for the Phase 1a FIH trial.

●
Leverage
our ADC product candidates and novel PH1 payload to partner with biopharmaceutical companies that desire to develop immuno-oncology
ADCs with a powerful approach that could achieve superior efficacy outcomes to current ADC therapies. Our focus is on advancing
our novel ADCs and PH1 proprietary payload that enables a broad and flexible partnering strategy that allows us to out-license rights
to specific ADCs, such as AKTX-101, or license rights to our novel proprietary payload PH1 to partners that want to develop their
own proprietary novel ADC product candidates.

●
Continue
to Progress AKTX-102, our discovery-stage ADC that utilizes PH1 against a novel cancer target. Our AKTX-102 ADC product candidate
is a novel antibody construct that is unprecedented and utilizes PH1 as its payload for robust cell killing and immune activation
against the cancer. From our initial early data, we believe AKTX-102 has the potential to overcome limitations of current CEACAM5
ADCs still in clinical testing. We plan to advance the development of AKTX-102 towards a lead product candidate, and future preclinical
efficacy and safety studies as appropriate.

Our
Novel Payload

PH1:
Our Lead Payload That Targets RNA Splicing

PH1,
or Thailanstatin ThA13, is an analog of a toxin produced by the bacterium Burkholderia thailandensis MSMB43, with cytotoxic properties
that stem from its ability to inhibit the ability of spliceosomes in eukaryotic cells to properly generate mature messenger mRNA (“mRNA”)
from pre-messenger RNA (“pre-mRNA”) during the step of protein synthesis called splicing.

We
believe spliceosomes are attractive targets for ADCs because the inhibition or significant modulation of spliceosome function prevents
cells from receiving critical information necessary for their continued survival. During splicing, pre-RNA is converted to mRNA via the
removal of “junk” sequences of pre-mRNA called introns, and the stitching together of the meaningful parts of pre-mRNA called
exons. After the introns have been removed and the exons stitched together, the resulting mRNA is then translated into proteins. The
spliceosome is the machinery responsible for the correct splicing of pre-mRNA and resultant formation of mRNA.

Faulty
spliceosome function, results in improper construction of exons, leading to faulty mRNA and resultant aberrant proteins.
Accumulation of thousands of aberrant mis-spliced RNA sequences result in numerous misfolded and unnatural proteins within the cell.
This causes the cell to die by endoplasmic reticulum stress, unfolded protein response, and other various mechanisms. The
accumulation of these mis-spliced RNA cells also produces unnatural proteins called neoepitopes and act as neoantigens, which
generate an immune activation response that leads to further elimination of cancer cells by the immune system that express similar
neoepitopes. We believe the secondary cytotoxic effect of spliceosome malfunction that results from neoepitope formation makes the
use of spliceosome modulators/inhibitors attractive in the development of potential ADC therapies due to their potential to exhibit
a 1-2 Mechanism of Actin punch, through which the payload targets and kills cancer cells, and the resultant formation of
neoepitopes/neoantigens triggers the body’s immune system to also attack the cancer with powerful response.

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Preclinical
data that we have generated indicates that PH1 possesses the ability to induce neoepitope formation. In an in vitro study, we
performed an unbiased comparison of our PH1 – a microtubule inhibitor payload, ravtansine (“DM4”), and dimethyl sulfoxide
(“DMSO”) vehicle control – to treat human gastric cancer cells. After treatment by each test agent. We performed RNA
sequencing of all genes and looked for sequences that would give rise to neoepitopes. After identifying the normal and novel RNA species,
we highlighted the neoepitope-containing species that respectively increased in response to treatment with DM4 and PH1, as compared to
the control treatment (DMSO). We observed that PH1-treated cells contained 765 neoepitope-containing RNA species, representing approximately
9 times the number of neoepitope-containing species created by DM4, which suggests that PH1 may be highly proficient at recruiting immune
cells to the tumor and stimulating immune-cell mediated cancer cell death. When we looked for genes that were negatively impacted and
reduced in quantity, we found 660 unique RNA species were depleted in PH1-treated cells, which was over three times greater than the number
found in DM4-treated cells.

Summary
of Preclinical Studies of PH1

We
have further examined the cytotoxic and immunostimulatory effects of PH1 as part of multiple ADC molecules against multiple antigen
targets (HER2, Trop-2, CEACAM5, etc.) and across several solid tumor types. To further establish the immuno-oncology effects of
PH1, we have explored the efficacy of these ADC-PH1 molecules as both a single agent compared to checkpoint inhibitors and in
combination with checkpoint inhibitors to evaluate its synergistic effects and ability to drive profound efficacy benefits. In in
vitro gastric and breast cancer models, we compared the cytotoxicity of an ADC comprised of PH1 conjugated to a Her2 antibody
(“Her2-PH1 ADC”) with that of Kadcyla®, a Her2-targeting ADC commercially approved for use in the treatment of
Her2-positive breast cancer. In both studies, the Her2-PH1 ADC demonstrated superior cytotoxic activity. We also studied
PH1 conjugated to a novel target (undisclosed) in an in vitro preclinical model of non-small cell lung cancer (NSCLC) and
found that the PH1 ADC showed increased anti-tumor activity in comparison to a vehicle comprised of the naked antibody
alone.

We
have also studied PH1’s potential synergies with checkpoint inhibitors in a mouse colon cancer model in which we examined tumor
regression and overall survival rates in 76 mice that were injected subcutaneously with colon cancer cells expressing Her2. We compared
a Trastuzumab-PH1 ADC against Kadcyla®, (Kadcyla® is not approved for colon cancer) both as a single agent treatment and in combination
with checkpoint inhibitor therapy (“I/O”). When administered as a combination with I/O therapy, the Her2-PH1 ADC demonstrated
significant greater survival rates vs Kadcyla plus I/O therapy. The Trastuzumab-PH1 ADC induced 14 complete tumor regressions (“CRs”)
whereas 5 tumors rebounded after initial shrinkage (n=19 mice per arm). As a result, 73% of Her2-PH1 + I/O treated mice showed complete
regressions and were still on study at 5 months, and median survival was not reached. In the Kadcyla® combination arm with I/O, there
were 8 CRs and 11 tumor rebounds, and 42% of Kadcyla® + I /O treated mice were tumor-free at 5 months. The median survival of Kadcyla®
+ I/O treated mice was 149 days.

A
second in vivo preclinical mouse study was performed to demonstrate the immunological memory to attack cancer that is created
uniquely by the PH1 payload. Using an identical mouse colon cancer model with the cancer cells expressing Her2 as described previously,
the mice developed measurable tumors and were then treated with two doses of a Trastuzumab-PH1 ADC, both as monotherapy and in combination
with I/O. Of the eight mice treated with the Trastuzumab-PH1 ADC in combination with I/O, seven (87.5%) had achieved CR and survived
at 150 days. These seven mice that had complete tumor/cancer remissions were subsequently rechallenged with colon cancer cells expressing
Her2, similar to the cells administered at the onset of the study. No tumor growth was observed in any of the seven mice after they were
rechallenged with colon cancer cells. These zero occurrences of colon cancer were found despite these mice not receiving any additional
treatment with the Trastuzumab-PH1 ADC after being rechallenged, indicating that these mice retained immune memory developed during the
initial treatment of Trastuzumab-PH1 against the colon cancer cells expressing Her2. Based on the results of these two in vivo studies,
we believe that PH1 has the potential to generate a powerful immunostimulatory effect and may possess synergies with checkpoint inhibitors,
which could improve the longer-term control of cancer that could result in enduring remissions.

To
further understand PH1’s unique ability to drive a powerful immune response observed in these studies, immune cell repertoire analysis
of the blood and tissue were performed from the mice treated in the first Her2 colon cancer in vivo experiment described previously.

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In
this analysis, it was found that the Trastuzumab-PH1 ADC was uniquely able to drive a multi-modal immune response of both the innate
and adaptive immune system not seen with the Kadcyla ADC or with an anti-PD1 inhibitor. These changes included a polarization of macrophages
to the pro-inflammatory phenotype, an increase in neutrophils, and an increase in diverse B cells that generate a wide range of IgM antibodies:

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In
addition to the unique immune activation seen with Trastuzumab-PH1 as a single agent, when this ADC-payload was combined with an anti-PD1
inhibitor, a unique expansion of Gamma Delta T Cells was observed and not seen with any other comparator arms including Kadcyla®
+ I /O or anti-PD1. The expansion of this T cell is profound given this subpopulation of T-cells is known to attack cancer through a
rapid response and has high cytotoxic activity, likely explaining some of differentiated complete remission rates seen in the in vivo
mouse experiment. This data demonstrates the unique design, action, and results seen with the PH1 payload that is highly differentiated
from current payloads used with traditional ADC molecules and enables the opportunity to potentially drive even better clinical outcomes
for patients.

PH1
payload designed to evade traditional ADC payload resistance mechanism by cancer cells:

We
have also observed that PH1 may be less susceptible to multidrug resistance (“MDR”), which can occur when cancer cells develop
resistance to chemotherapeutic agents. One mechanism by which MDR occurs is through the overexpression of what are referred to as MDR
transporters, which have the ability to pump standard ADC payloads (topoisomerase 1 and microtubule inhibitors) out of the cell before
the payload can kill the cell.

We
evaluated PH1 and Monomethyl auristatin E’s (MMAE, microtubule inhibitor) ability to kill mouse embryonic stem
(“MES”) cells with normal and high levels of MDR. We found that MMAE, but not PH1, was recognized by these pumps, and
the presence of high levels of these pumps reduced the in vitro cytotoxicity (IC50) of MMAE by ~ 200x. However, for the PH1 payload,
the presence of high levels of these pumps had no significant effect on its cytotoxic potency, as PH1 was not recognized by MDRs and
thus not pumped out of the cell. To confirm that the MDR resistance mechanism was at play for MMA3, the MDR-specific inhibitor
Elacridar when applied to the cell prevented MDR pumps in MDR-high MES cells from pumping MMAE payload out of the cell, allowing
accumulation of MMAE, and returning MMAE’s cell killing potency back to baseline. This finding confirmed that the loss of
MMAE’s potency was specific to the increase in the number of MDR pumps and did not occur when we blocked MDR’s ability
to pump out the payload using Elacridar. We believe this is important because MDR transporters are known to be implicated in the
emergence of resistance against many chemotherapies, including some ADC payloads. Furthermore, if MDRs recognized PH1, it would have
reduced its potency and restricted its cytotoxicity to only targets that were highly expressed in cancer cells.

AKTX-101:
Our Lead ADC Product Candidate

We
aim to establish a best-in-class Trop-2-targeting ADC with our lead product candidate AKTX-101. AKTX-101 is designed to treat solid tumors
by delivering PH1 into cells expressing Trop-2. Trop-2 is a cell surface antigen which is upregulated in a variety of malignant tumors,
including lung, breast, urothelial, gastric, pancreatic, and other solid tumors, but has limited expression in normal human tissues,
making it an ideal target in cancer.

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We
have studied AKTX-101 in a number of preclinical models, both in vitro and in vivo, as well as in a non-human primate (“NHP”)
toxicity study. Based on our preclinical experiments, we believe AKTX-101 may have the potential to offer advantages over existing therapies
in terms of increased cytotoxicity, reduced resistance, better tolerance, and most importantly, activating the innate and adaptive immune
system to drive enduring efficacy. In in vitro preclinical studies, we compared AKTX-101 (drug antibody ratio (“DAR”)
4) to a currently approved Trop-2-targeting ADC Trodelvy® (with DAR 8). We found that AKTX-101 showed greater cytotoxicity at lower
drug doses in gastric, pancreatic and bladder cancer models. To further corroborate our in vitro observations, we evaluated AKTX-101
and the same currently approved ADC in an in vivo model against the same Trop-2 gastric carcinoma cell-line derived xenograft
grown as tumors in mice. Two doses of each agent were given with the currently approved ADC administered at 10 mg/kg while AKTX-101 (DAR
4) was administered at 3 mg/kg. Both treatments induced tumor regression at 3-6 weeks. Throughout the study at different timepoints (day
21, day 42, and day 150), the AKTX-101 arm delivered significantly superior efficacy compared to Trodelvy® validated PH1’s
greater cytotoxic ability to kill cancer cells even at significantly lower active drug doses.

First-line checkpoint inhibitor therapy is standard-of-care (“SOC”) for platinum-ineligible patients that have recurrent, resistant, or
metastatic urothelial cancer. Also, the Trop2 ADC Trodelvy® had accelerated approval for the treatment of metastatic urothelial cancer
but was later withdrawn in November 2024. Therefore, we generated a syngenetic mouse urothelial model expressing human Trop2 that failed
to respond to checkpoint blockade as a single agent after tumors exceeded a certain size threshold.

In
these studies, SOC anti-PD-1 therapy showed no significant TGI relative to control tumors (p>0.99). We then evaluated whether
AKTX-101 single agent therapy was active in this SOC unresponsive syngeneic mouse model.

AKTX-101
prevented growth of pre-established urothelial tumors up until the last dose on Day 14 in this immune competent model. AKTX-101-treated
tumors exhibited significantly delayed tumor growth relative to vehicle-treated controls (p=0.04) and relative to SOC (p=0.002).

A P-value is a statistical measurement that measures
the strength of evidenced against a null hypothesis, ranging from 0 to 1. A P-value measures the probability of obtaining results as extreme
or more extreme than observed, assuming the null hypothesis is true. A lower P-value, indicates stronger evidence to reject the null hypothesis.

8

The
use of our proprietary L22 linker in AKTX-101 may contribute to a safety profile that has the potential to be superior to currently
approved Trop-2-targeting ADCs. As a non-cleavable linker, L22 causes the PH1 payload to bind irreversibly to the spliceosome
machinery, thereby eliminating the potential for PH1 to be released by the cancer cell and thus enter and kill normal, non-cancerous
cells. In pre-clinical in vitro models, AKTX-101 demonstrated minimal killing of normal human fibroblasts not expressing
Trop-2 in comparison to an approved Trop-2-targeting ADC, which, due to its known bystander effect, is toxic to normal human
fibroblasts. We believe this preclinical data suggests that a higher therapeutic index may be possible using AKTX-101 over current
Trop-2 ADCs available today. We also studied the toxicity and tolerability of AKTX-101 in a NHP model. We evaluated AKTX-101 in this
study and performed a repeat-dose study wherein three ADC doses were intravenously administered every three weeks, followed by a
three-week recovery period. To gain an understanding of the maximal cumulative effects of AKTX-101, animals were evaluated two days
after receiving the last of all three doses being administered. Reversibility was addressed in another set of animals that received
all three doses but were allowed a three-week recovery period. Histopathology was performed unilaterally for all tissues in both
sets of animals. We found that AKTX-101 was well-tolerated with observed side effects that were transient (skin rash, mild
thrombocytopenia and mild elevation of liver enzymes) and resolved within weeks after administration. Based on these results
seen across the doses and frequency tested, and when analyzed with the dosing regimens driving efficacy in preclinical models, we
believe there is a suitable Therapeutic Index to support moving AKTX-101 into Phase 1 trials.

In
addition to these findings, importantly, there was no evidence of neutropenia, leukopenia, interstitial lung disease or mucosal inflammation,
which have been associated with other Trop-2-targeting ADCs that use standard payloads comprising of topoisomerase I inhibitors. We believe
the absence of observed lung complications, colitis and hypothyroidism in this study may further support AKTX-101’s potential suitability
and feasibility for use in combination with checkpoint inhibitors, given these side effects are often common with checkpoint inhibitors.

Our
Legacy Programs

As
highlighted above, the following assets are not part of our active portfolio and we are working on seeking external partners for out-licensing:

●
Nomacopan:
a Phase 3-ready bi-specific complement C5 and leukotriene B4 inhibitor for the treatment of paroxysmal nocturnal hemoglobinuria (“PNH”),
a rare, acquired blood disorder characterized by the destruction of red blood cells, and pediatric hematopoietic stem cell transplantation-associated
thrombotic microangiopathy (“HSCT-TMA”).

●
PAS-Nomacopan:
a preclinical asset focused on long-acting PAS-nomacopan for the potential treatment of geographic atrophy, an advanced form
of age-related macular degeneration of the eye.

●
PHP-303:
a Phase-2-ready neutrophil elastase inhibitor for the potential treatment of a genetic disorder known as alpha-1 antitrypsin disorder.
We acquired the rights to PHP-303 and licensed associated know-how from Bayer Pharmaceuticals in March 2017.

Competition

The
biotechnology and pharmaceutical industries, and the oncology subsector, are characterized by rapid technological evolution, fierce competition
and strong defense of intellectual property. While we believe that our technology, the expertise of our team, and our development experience
and scientific knowledge provide us with competitive advantages, we face competition from biotechnology and pharmaceutical companies,
including companies that are larger and better funded than we are, academic institutions, governmental agencies and public and private
research institutions, among others. Moreover, we may also compete with smaller or earlier-stage companies, universities and other research
institutions that have developed, are or may be developing or may in the future develop current and future cancer therapeutics. Product
candidates that we successfully develop and commercialize may compete with existing therapies and new therapies that may become available
in the future.

We
also face competition more broadly across the oncology market for cost-effective and reimbursable cancer treatments. The most common
methods of treating patients with cancer are surgery, radiation and drug therapy, including chemotherapy, hormone therapy, biologic therapy
such as monoclonal and bispecific antibodies, immunotherapy, cell-based therapy and targeted therapy, or a combination of any such methods.
There is a variety of available drug therapies marketed for cancer. In many cases, these drugs are administered in combination to enhance
efficacy. While our product candidates, if any are approved, may compete with these existing drugs and other therapies, to the extent
they are ultimately used in combination with or as an adjunct to these therapies, our product candidates may not be competitive with
them. Insurers and reimbursement authorities may also encourage the use of generic products or specific branded products. As a result,
obtaining market acceptance of, and gaining significant share of the market for, any product candidates that we successfully introduce
to the market may pose challenges. In addition, many companies are developing new oncology therapeutics, and we cannot predict what the
standard of care will be as our current and future product candidates progress through development.

AKTX-101
will compete with approved Trop-2-targeting ADCs such as Trodelvy® and Datroway® as well as other programs
in clinical trials that also target Trop-2. If we are unable to effectively differentiate AKTX-101 from other products and product candidates
or other common methods of treating cancer patients our ability to compete would be negatively impacted.

9

Sales
and Marketing

Because
we have been focused on discovery and development of drugs, we currently have limited sales, marketing and distribution capabilities
in order to commercialize any other product candidates that may be approved in the future. If our lead product candidate is approved,
we intend either to establish a sales and marketing organization with technical expertise and supporting distribution capabilities, or
to outsource some or all of these functions to third parties. We may take different approaches to commercialization in different geographies.
We will adopt a similar strategy for the other compounds in our pipeline.

Manufacturing

We
rely on third party contract manufacturers (CDMOs) for the development, scaleup, and GMP production of materials used in our research
and development activities. In December 2025, we initiated GMP manufacturing activities for AKTX-101 and selected WuXi Biologics/XDC
as our partner for these key parts of IND enabling work and product supply for future clinical trials. This milestone supports our planning
for a Phase 1 first-in-human study timeline described in our public communications and prior disclosures. The partnership with WuXi for
these activities enables us to maintain an efficient, high quality, and reliable model to develop and supply our clinical material for
future studies.

Intellectual
Property

We
will be able to protect our technology and products from unauthorized use by third parties only to the extent it is covered by valid
and enforceable patents or is effectively maintained as trade secrets. Patents and other proprietary rights are thus an essential element
of our business.

Our
success will depend in part on our ability to obtain and maintain proprietary protection for our product candidates, technology, and
know-how, to operate without infringing on the proprietary rights of others, and to prevent others from infringing our proprietary rights.
Our policy is to seek to protect our proprietary position by, among other methods, filing U.S. and foreign patent applications related
to our proprietary technology, inventions, and improvements that are important to the development of our business and defending our patent
applications and patents if they are subjected to challenge by a third party. We also rely on trade secrets, know-how, continuing technological
innovation, and in-licensing opportunities to develop and maintain our proprietary position.

As
of January 1, 2026, our payload platform and ADC pipeline consist of two Patent co-operation treaty (PCT) families and three provisional
patents filed at the European Patent Office (“EPO”) or the United States Patent and Trademark Office (“USPTO”).

The
PH-1 payload program was developed in-house. This patent family has been granted in the United States, China, Israel, India, Mexico,
and Brazil, with actions pending in Europe, Japan, New Zealand, Canada and Australia. The composition of matter
claims describing novel Thailanstatin payloads and linkers have IP coverage through September 2038.

The
PCT patent application filed in 2024 has claims describing next-generation Thailanstatin diastereomer payloads, novel Trop-2 antibodies
and Trop-2 ADCs protecting different aspects of pipeline candidate, AKTX-101, while also covering aspects of use or application of AKTX-101
to different cancer settings. This patent also describes a large-scale chemosynthetic process for payload synthesis amenable to manufacturing.
This patent family is pending in 12 jurisdictions, and the anticipated expiry of this patent family is April 2043.

In
2025, we filed 3 additional provisional patent applications at USPTO covering a wide scope of anti-cancer biological mechanisms unique
to targeting RNA splicing in cancer cells that are not specific to the composition of matter of the PH1 payload:

1.
The
first provisional patent includes claims supporting targeting of specific oncogenic drivers using spliceosome modulators to reverse
some aspect of cancer progression- angiogenesis, hormone dependency, and oncogene dependency.

2.
The
second provisional patent includes claims supporting use of spliceosome modulators as immunogenic payloads inducing neoepitopes,
anti-neoepitope antibodies, and anti-tumor macrophage polarization when these modulators are applied as a single agent. This patent
covers elements of the immunomodulatory mechanism of PH1 ADCs and how they are expected to provide a therapeutic benefit by activating
the host immune system against cancer.

3.
The
third provisional patent includes claims supporting use of spliceosome modulators in synergy with checkpoint inhibitors to improve
anti-tumor efficacy or induce immune effectors that neither single agent on its own can generate. One key example as such are gamma-delta
T-cells, unique T cells that possess potent anti-tumor activity and can kill cancer cells much faster than conventional T cells.

These
2025 provisional patent filings are anticipated to expire between September and October 2045 and if granted, will provide the Company
with broad protection over ADC molecules that use splicing modulation actions to attack cancers.

We
are planning to file composition of matter patents as we continue to research and induct new ADCs into our pipeline. We will continue
to create novel composition of matter patents to cover new ADCs not limited to new usage of linkers, formulations, and/or standard-of-care
combination patents to secure additional protection after the PH-1 and AKTX-101 patent families expire.

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If
we are unable to obtain, maintain, defend and enforce patent and other intellectual property rights for our technologies and product
candidate, or if the scope of the patent and other intellectual property rights obtained is not sufficiently broad, our competitors and
other third parties could develop and commercialize technology, biologics and/or biosimilars similar or identical to ours, and erode
or negate any competitive advantage that we may have, which could harm our business and ability to achieve profitability.

We
can provide no assurance that our patent applications or those of our licensors will result in additional patents being issued or that
issued patents will afford sufficient protection against competitors with similar technologies, nor can there be any assurance that the
patents issued will not be infringed, designed around, or invalidated by third parties. Even issued patents may later be found unenforceable
or may be modified or revoked in proceedings instituted by third parties before various patent offices or in courts. The degree of future
protection for our proprietary rights is uncertain. Only limited protection may be available and may not adequately protect our rights
or permit us to gain or keep competitive advantage. Composition-of-matter patents on the biological or chemical active pharmaceutical
ingredients are generally considered to offer the strongest protection of intellectual property and provide the broadest scope of patent
protection for pharmaceutical products, as such patents provide protection without regard to any method of use or any method of manufacturing.
While we have issued composition-of-matter patents in the United States and other countries, we cannot be certain that the claims in
our issued composition-of-matter patents will not be found invalid or unenforceable if challenged. We cannot be certain that the claims
in any patent applications covering composition-of-matter or formulations of our product candidates that are pending, or that we may
file, will be considered patentable by the USPTO, and courts in the United States or by the patent offices and courts in foreign countries,
nor can we be certain that the claims in our issued composition-of-matter patents will not be found invalid or unenforceable if challenged.
Even if any patent applications that we may file relating to specific formulations of our product candidates issue as patents, formulation
patents protect a specific formulation of a product and may not be enforced against competitors making and marketing a product that has
the same active pharmaceutical ingredient in a different formulation. Method-of-use patents protect the use of a product for the specified
method or for treatment of a particular indication. This type of patent may not be enforced against competitors making and marketing
a product that has the same active pharmaceutical ingredient for use in a method not claimed by the patent. Moreover, even if competitors
do not actively promote their product for our targeted indications, physicians may prescribe these products “off-label.”
Although off-label prescriptions may infringe or contribute to the infringement of method-of-use patents, the practice is common and
such infringement may be difficult to prevent or prosecute. Also, as is the case for composition-of-matter patents, we cannot be certain
that the claims in our issued method-of-use patents will not be found invalid or unenforceable if challenged. We cannot be certain that
the claims in any patent applications covering methods of using our product candidates that are pending, or that we may file, will be
considered patentable by the USPTO and courts in the United States or by the patent offices and courts in foreign countries, nor can
we be certain that the claims in our issued method-of-use patents will not be found invalid or unenforceable if challenged.

Government
Regulation

Government
Regulation and Product Approval

Government
authorities in the U.S., at the federal, state and local level, and in other countries extensively regulate, among other things, the
research, development, testing, manufacture, quality control, approval, labeling, packaging, storage, record-keeping, promotion, advertising,
distribution, marketing and export and import of products such as those that we are developing. A new drug must be approved by the FDA,
generally through the new drug application (“NDA”) process and a new biologic must be approved by the FDA through the biologics
license application (“BLA”) process before it may be legally marketed in the U.S. The animal and other non-clinical data
and the results of human clinical trials performed under an Investigational New Drug application (“IND”) and under similar
foreign applications will become part of the NDA or BLA.

11

U.S.
Drug Development Process

In
the U.S., the FDA regulates drugs under the Federal Food, Drug, and Cosmetic Act (“FDCA”) and in the case of biologics, also
under the Public Health Service Act (“PHSA”) and the implementing regulations for both statutes. The process of obtaining
marketing authorizations and the subsequent compliance with applicable federal, state, local, and foreign statutes and regulations require
the expenditure of substantial time and financial resources. Failure to comply with the applicable U.S. requirements at any time during
the product development process, approval process or after approval, may subject an applicant to administrative or judicial sanctions.
These sanctions could include the FDA’s refusal to approve pending applications, withdrawal of an approval, a clinical hold, warning
letters, requesting product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines,
refusals of government contracts, restitution, disgorgement, or civil or criminal penalties. Any agency or judicial enforcement action
could have a material adverse effect on us. The process required by the FDA before a drug or biologic may be marketed in the U.S. generally
involves the following:

●
completion
of preclinical laboratory tests, animal studies and formulation studies according to Good Laboratory Practices (“GLP”)
and relevant provisions of the Animal Welfare Act, where applicable, or other applicable laws and regulations;

●
submission
to the FDA of an IND which must become effective before human clinical trials may begin;

●
performance
of adequate and well-controlled human clinical trials according to Good Clinical Practices (“GCP”) to establish the safety
and efficacy of the proposed drug for its intended use;

●
submission
to the FDA of an NDA or BLA;

●
satisfactory
completion of an FDA inspection of the manufacturing facility or facilities at which the drug is produced to assess compliance with
current good manufacturing practice (“cGMP”) to assure that the facilities, methods and controls are adequate to preserve
the drug’s identity, strength, quality and purity; and

●
FDA
review and approval of the NDA or BLA.

Once
a product candidate is identified for development, it enters the preclinical testing stage. Preclinical tests include laboratory evaluations
of product chemistry, toxicity and formulation, as well as animal studies. An IND sponsor must submit the results of the preclinical
tests, together with manufacturing information and analytical data, to the FDA as part of the IND. The sponsor will also include a protocol
detailing, among other things, the objectives of the first phase of the clinical trials, the parameters to be used in monitoring safety,
and the effectiveness criteria to be evaluated, if the first phase lends itself to an efficacy evaluation. Some preclinical testing may
continue even after the IND is submitted. The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA, within
the 30-day time period, places the clinical trial on a clinical hold. In such a case, the IND sponsor and the FDA must resolve any outstanding
concerns before the clinical trial can begin. Clinical holds also may be imposed by the FDA at any time before or during studies due
to safety concerns or non-compliance.

All
clinical trials must be conducted under the supervision of one or more qualified investigators in accordance with GCP. They must be conducted
under protocols detailing the objectives of the trial, dosing procedures, subject selection and exclusion criteria and the safety and
effectiveness criteria to be evaluated. Each protocol must be submitted to the FDA as part of the IND, and progress reports detailing
the results of the clinical trials must be submitted at least annually. In addition, timely safety reports must be submitted to the FDA
and the investigators for serious and unexpected adverse events. An institutional review board (“IRB”) responsible for the
research conducted at each institution participating in the clinical trial must review and approve each protocol before a clinical trial
commences at that institution and must also approve the information regarding the trial and the consent form that must be provided to
each trial subject or his or her legal representative, monitor the study until completed and otherwise comply with IRB regulations.

Human
clinical trials are typically conducted in three sequential phases that may overlap or be combined:

●
Phase
1: The product candidate is initially introduced into healthy human subjects and tested for safety, dosage tolerance, absorption,
metabolism, distribution and excretion. In the case of some products for severe or life-threatening diseases, such as cancer, especially
when the product may be too inherently toxic to ethically administer to healthy volunteers, the initial human testing may be conducted
in patients.

12

●
Phase
2: This phase involves studies in a limited patient population to identify possible adverse effects and safety risks, to
preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage.

●
Phase
3: Clinical trials are undertaken to further evaluate dosage, clinical efficacy and safety in an expanded patient population
at geographically dispersed clinical study sites. These studies are intended to establish the overall risk-benefit ratio of the product
candidate and provide, if appropriate, an adequate basis for product labeling.

The
FDA or the sponsor may suspend a clinical trial at any time on various grounds, including a finding that the research subjects or patients
are being exposed to an unacceptable health risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution
if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the drug has been associated with
unexpected serious harm to patients. Phase 1, Phase 2, and Phase 3 testing may not be completed successfully within any specified period,
if at all.

During
the development of a new drug, sponsors are given opportunities to meet with the FDA at certain points. These points may include prior
to submission of an IND, at the end of Phase 2, and before an NDA or BLA is submitted. Meetings at other times may be requested. These
meetings can provide an opportunity for the sponsor to share information about the data gathered to date, for the FDA to provide advice,
and for the sponsor and FDA to reach agreement on the next phase of development. Sponsors typically use the end of Phase 2 meeting to
discuss their Phase 2 clinical results and seek feedback on their plans for the pivotal Phase 3 clinical trial that they believe will
support approval of the new drug.

Progress
reports detailing the results of the clinical trials must be submitted at least annually to the FDA. Safety reports must be submitted
to the FDA and the clinical investigators 15 calendar days after the trial sponsor determines that the adverse event information qualifies
for reporting. The sponsor also must notify FDA of any unexpected fatal or life-threatening suspected adverse reaction as soon as possible
but in no case later than 7 calendar days after the sponsor’s initial receipt of the information. Sponsors of clinical trials of
drugs and biologics are required to register and disclose certain clinical trial information on a registry maintained by the National
Institutes of Health, at www.clinicaltrials.gov.

Concurrent
with clinical trials, sponsors usually complete additional animal studies and must also develop additional information about the chemistry
and physical characteristics of the drug and finalize a process for manufacturing the product in commercial quantities in accordance
with cGMP requirements. The manufacturing process must be capable of consistently producing quality batches of the product candidate
and, among other things, the manufacturer must develop methods for testing the identity, strength, quality and purity of the final drug.
Additionally, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the product
candidate does not undergo unacceptable deterioration over its shelf life.

U.S.
Review and Approval Processes

The
results of product development, preclinical studies and clinical trials, along with descriptions of the manufacturing process, analytical
tests conducted on the chemistry of the drug, proposed labeling, and other relevant information are submitted to the FDA as part of an
NDA or BLA requesting approval to market the product. The submission of an NDA or BLA is subject to the payment of substantial user fees;
a waiver of such fees may be obtained under certain limited circumstances. Within sixty days of receipt, the FDA initially reviews all
NDAs and BLAs submitted to ensure that they are sufficiently complete for substantive review before it accepts them for filing. The FDA
may request additional information rather than accept a NDA or BLA for filing. In this event, the NDA or BLA must be resubmitted with
the additional information. The resubmitted application also is subject to review before the FDA accepts it for filing. Once the submission
is accepted for filing, the FDA begins an in-depth substantive review. FDA may refer an NDA or BLA that is novel or that presents difficult
questions of safety or efficacy to an advisory committee for review, evaluation and recommendation on questions presented by the FDA,
which may include questions related to whether the application should be approved and under what conditions. The FDA is not bound by
the recommendation of an advisory committee, but it generally follows such recommendations. Before approving an NDA or BLA, the FDA will
typically inspect one or more clinical sites to assure compliance with GCP. Additionally, the FDA will inspect the facility or the facilities
at which the product is manufactured to assess compliance with cGMP.

13

The
FDA may also place other conditions on approval, including the requirement for a Risk Evaluation and Mitigation Strategy (“REMS”)
to assure the safe use of the product. If the FDA concludes a REMS is needed, the sponsor of the NDA or BLA must submit a proposed REMS,
and the FDA will not approve the application without an approved REMS. A REMS could include medication guides, physician communication
plans or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools.
Any of these limitations on approval or marketing could restrict the commercial promotion, distribution, prescription or dispensing of
a product.

The
FDA reviews an NDA to determine, among other things, whether a product is safe and effective for its intended use and whether its manufacturing
is cGMP-compliant to assure and preserve the product’s identity, strength, quality and purity. The FDA reviews a BLA to determine,
among other things whether the product is safe, pure and potent and the facility in which it is manufactured, processed, packed or held
meets standards designed to assure the product’s continued safety, purity and potency.

The
FDA may issue an approval letter following its review process if it determines that the NDA or BLA has met all applicable requirements.
Alternatively, the FDA may issue a complete response letter (“CRL”), which may require additional clinical or other data
or impose other conditions that must be met in order to secure final approval of the NDA or BLA. The applicant may either resubmit the
NDA or BLA, addressing all of the deficiencies identified in the letter, withdraw the application, or, in the case of an NDA, request
an opportunity for a hearing. The applicant also may request resolution of any dispute concerning the CRL. If the FDA denies approval
of a BLA, the applicant may request, and FDA must issue, a notice of opportunity for hearing.

NDAs
or BLAs may receive either standard or priority review. Under current FDA review goals, standard review of an NDA for a new molecular
entity (“NME”) or original BLA will be ten months from the date that the NDA or BLA is filed. A drug representing a significant
improvement in treatment, prevention or diagnosis of a serious disease or condition may receive a priority review of six months. Priority
review does not change the standards for approval but may expedite the approval process.

If
a product receives marketing authorization, the approval may be significantly limited to specific diseases and dosages or the indications
for use may otherwise be limited, which could restrict the commercial value of the product. In addition, the FDA may require a sponsor
to conduct Phase IV testing, such as clinical trials designed to further assess a drug’s safety and/or effectiveness after NDA
or BLA approval and may require testing and surveillance programs to monitor the safety of approved products which have been commercialized.

The
Pediatric Research Equity Act (“PREA”) requires a sponsor to conduct pediatric studies for most drugs and biologics with
a new active ingredient, new indication, new dosage form, new dosing regimen or new route of administration. Under PREA, original NDAs
and BLAs and certain supplemental applications must contain a pediatric assessment unless the sponsor has received a deferral or waiver.
The required assessment must assess the safety and effectiveness of the product for the claimed indications in all relevant pediatric
subpopulations and support dosing and administration for each pediatric subpopulation for which the product is safe and effective. The
sponsor or FDA may request a deferral of pediatric studies for some or all of the pediatric subpopulations. A deferral may be granted
for several reasons, including a finding that the drug or biologic is ready for approval for use in adults before pediatric studies are
complete or that additional safety or effectiveness data needs to be collected before pediatric studies can begin.

The
Best Pharmaceuticals for Children Act (“BPCA”) provides NDA holders a six-month period of exclusivity attached to any patent
or regulatory exclusivity listed in the Orange Book, and BLA holders a six-month period of exclusivity attached to any unexpired regulatory
exclusivity, if certain conditions are met. Conditions for pediatric exclusivity include a determination by the FDA that information
relating to the use of a new drug in the pediatric population may produce health benefits in that population, a written request by the
FDA for pediatric studies, completion of the studies in accordance with the written request, and submission of reports from the requested
studies to the FDA. The issuance of a written request does not require the sponsor to undertake the described studies.

14

Patent
Term Restoration and Marketing Exclusivity

Depending
upon the timing, duration and specifics of FDA approval of our product candidates, some of our U.S. patents may be eligible for limited
patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, referred to as the Hatch-Waxman Amendments.
The Hatch-Waxman Amendments permit a patent restoration term of up to five years as partial compensation for effective patent term lost
due to time spent during product development and the FDA regulatory review process. However, patent term restoration cannot extend the
remaining term of a patent beyond a total of 14 years from the product’s approval date. The patent term restoration period is generally
one-half the time between the effective date of an IND and the submission date of an NDA or BLA, plus the time between the submission
date of an NDA or BLA and the approval of that application, except that the period is reduced by any time during which the applicant
failed to exercise due diligence. Only one patent applicable to an approved drug may be extended, and the extension must be applied for
prior to expiration of the patent. The United States Patent and Trademark Office, in consultation with the FDA, reviews and approves
the application for any patent term extension or restoration.

Biologics
Price Competition and Innovation Act of 2009 (BPCIA)

The
BPCIA amended the PHSA to create an abbreviated approval pathway for biosimilar and interchangeable biosimilar products and provide for
a twelve-year exclusivity period for the first approved biological product, or reference product, against which a biosimilar or interchangeable
biosimilar application is evaluated. A biosimilar product is defined as one that is highly similar to a reference product notwithstanding
minor differences in clinically inactive components and for which there are no clinically meaningful differences between the biological
product and the reference product in terms of the safety, purity and potency of the product. An interchangeable biosimilar product is
a biosimilar product that, subject to state pharmacy laws, may be substituted for the reference product without the intervention of the
health care provider who prescribed the reference product.

The
biosimilar applicant must demonstrate that the product is biosimilar based on data from: (1) analytical studies showing that the biosimilar
product is highly similar to the reference product; (2) animal studies (including toxicity); and (3) as applicable, one or more clinical
studies to demonstrate safety, purity and potency in one or more appropriate conditions of use for which the reference product is approved.
In addition, the applicant must show that the biosimilar and reference products have the same mechanism of action for the conditions
of use on the label, route of administration, dosage and strength, and the production facility must meet standards designed to assure
product safety, purity and potency.

An
application for a biosimilar product may not be submitted until four years after the date on which the reference product was first approved.
The first approved interchangeable biosimilar product will be granted an exclusivity period of up to one year after it is first commercially
marketed, but the exclusivity period may be shortened under certain circumstances.

Orphan
Drug Designation

Under
the Orphan Drug Act, the FDA may grant orphan drug designation to a drug intended to treat a rare disease or condition, which is generally
a disease or condition that affects fewer than 200,000 individuals in the U.S., or more than 200,000 individuals in the U.S. and for
which there is no reasonable expectation that the cost of developing and making available in the U.S. a drug for this type of disease
or condition will be recovered from sales in the U.S. for that drug. Orphan drug designation must be requested before submitting an NDA
or BLA. After the FDA grants orphan drug designation, the identity of the therapeutic agent and its potential orphan use are disclosed
publicly by the FDA. Orphan drug designation does not itself convey any advantage in or shorten the duration of the regulatory review
and approval process. If a product that has orphan drug designation subsequently receives the first FDA approval for the disease for
which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other
applications to market the same drug for the same indication, except in very limited circumstances, for seven years. Orphan drug exclusivity,
however, also could block the approval of one of our product candidates for seven years if a competitor obtains approval of the same
drug, for the same designated orphan indication or if our product candidate is determined to be contained within the competitor’s
product for the same indication or disease.

15

Fast
Track Designation and Accelerated Approval

The
FDA has established programs to facilitate the development, and expedite the review of, drugs that are intended for the treatment of
a serious or life-threatening disease or condition for which there is no effective treatment and which demonstrate the potential to address
unmet medical needs for the condition. Under the fast track program, the sponsor of a product candidate may request that the FDA designate
the product candidate for a specific indication as a fast track drug concurrent with or after the filing of the IND for the product candidate.
The FDA determines if the product candidate qualifies for fast track designation within 60 days of receipt of the sponsor’s request.

The
FDA may designate a drug for fast track status if it is intended to treat a serious or life-threatening illness and nonclinical or clinical
data demonstrate the potential to address an unmet medical need. If so designated, the FDA takes steps to expedite the development and
review of the product’s marketing application, including by meeting with the sponsor more frequently to provide timely advice so
that the development program is as efficient as possible. Another benefit of fast track designation is that the FDA may initiate review
of sections of an NDA or BLA before the application is complete. This rolling review is available if the applicant provides, and the
FDA approves, a schedule for the submission of the remaining information and the applicant pays applicable user fees. The FDA’s
review goal date does not begin until the last section of the application is submitted, however. Fast track designation may be withdrawn
by the FDA if the FDA believes that the designation is no longer supported by data emerging in clinical trials.

The
agency may determine that an accelerated approval pathway is appropriate if a product candidate is intended to treat a serious condition
and provide meaningful therapeutic benefit to patients over existing treatments based upon a surrogate endpoint that is reasonably likely
to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is
reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity,
rarity, or prevalence of the condition and the availability or lack of alternative treatments.

In
clinical trials, a surrogate endpoint is a measurement of laboratory or clinical signs of a disease or condition that substitutes for
a direct measurement of how a patient feels, functions, or survives. Surrogate endpoints can often be measured more easily or more rapidly
than other clinical endpoints. As a condition of accelerated approval, the FDA generally requires that the sponsor perform adequate and
well-controlled post-marketing clinical trials with due diligence to confirm clinical benefit and, under the Food and Drug Omnibus Reform
Act of 2022 (“FDORA”), the FDA is now permitted to require, as appropriate, that such trials be underway prior to approval
or within a specific time period after the date accelerated approval is granted. Failure to conduct required post-approval studies or
to confirm clinical benefit through post-marketing studies allows the FDA to withdraw the drug from the market on an expedited basis.
In addition, for products under accelerated approval, FDA generally requires all promotional materials, including launch materials, to
be submitted for prior review.

Post-Approval
Requirements

Once
approval of an NDA or BLA is granted, the FDA may withdraw the approval if compliance with regulatory standards is not maintained or
if problems are identified after the product reaches the market. Newly discovered or developed safety or effectiveness data may require
changes to a product’s approved labeling, including the addition of new warnings and contraindications, and also may require the
implementation of other risk management measures, including a REMS or the conduct of post-marketing studies to assess a newly discovered
safety issue. Later discovery of previously unknown problems with a product may result in restrictions on the product or even complete
withdrawal of the product from the market. After approval, some types of changes to the approved product, such as adding new indications,
manufacturing changes and additional labeling claims, are subject to further FDA review and approval. Drug manufacturers and other entities
involved in the manufacture and distribution of approved drugs are required to register their establishments with the FDA and certain
state agencies and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMP and
other laws and regulations. We rely, and expect to continue to rely, on third parties for the production of clinical and commercial quantities
of our products. Future inspections by the FDA and other regulatory agencies may identify compliance issues at the facilities of our
contract manufacturers that may disrupt production or distribution or require substantial resources to correct.

16

Any
drug products manufactured or distributed by us pursuant to FDA approvals are subject to continuing regulation by the FDA, including,
among other things, requirements related to record-keeping, reporting of adverse experiences, submitting periodic reports, updating safety
and efficacy information, drug sampling and distribution, and electronic records and signatures. The FDA also closely regulates labeling,
advertising, promotion and other types of information that may be disseminated about products that are placed on the market. Drugs may
be promoted only for the approved indications and in a manner that is consistent with the approved label.

From
time to time, legislation is drafted, introduced and passed in Congress that could significantly change the statutory provisions governing
the development, approval, manufacturing and marketing of products regulated by the FDA. It is impossible to predict whether further
legislative changes will be enacted, or whether FDA regulations, guidance or interpretations may change or what the impact of such changes,
if any, may be.

Regulation
and Marketing Authorization in the European Union

Preclinical
Studies

Preclinical
tests include laboratory evaluations of product chemistry, formulation and stability, as well as studies to evaluate toxicity in animal
studies, in order to assess the potential safety and efficacy of the product. The conduct of the preclinical tests and formulation of
the compounds for testing must comply with the relevant EU regulations and requirements. The results of the preclinical tests, together
with relevant manufacturing information and analytical data, are submitted as part of the CTA and MAA.

Clinical
Trial Approval

Clinical
trials in the EU are governed by the Clinical Trials Regulation, (EU) No 536/2014, or the CT Regulation. The CT Regulation was adopted
in 2014 and replaced the Clinical Trials Directive 2001/20/EC, or the CT Directive and came into effect on January 31, 2022. To ensure
that the rules for clinical trials are identical throughout the EU, the EU clinical trials legislation was passed as a “regulation”
that is directly applicable in all EU Member States. All clinical trials performed in the EU are required to be conducted in accordance
with the CT Regulation.

The
CT Regulation aims to harmonize, simplify and streamline the approval of clinical trials in the EU. The main characteristics of the CT
Regulation include:

●
A
streamlined application procedure via a single-entry point, through the centralized EU portal called the Clinical Trials Information
System (CTIS).

●
A
single set of documents to be prepared and submitted for the application as well as simplified reporting procedures that will spare
sponsors from submitting broadly identical information separately to various bodies and different EU Member States.

●
A
harmonized procedure for the assessment of applications for clinical trials, which is divided in two parts. Part I is assessed jointly
by all Member States Concerned. Part II is assessed separately by each Member State concerned.

●
Strictly
defined deadlines for the assessment of clinical trial application.

●
The
involvement of the ethics committees in the assessment procedure in accordance with the national law of the Member State concerned
but within the overall timelines defined by the CT Regulation.

17

Marketing
Authorization

Authorization
to market a product in the Member States of the EU proceeds under one of four procedures: a centralized authorization procedure, a mutual
recognition procedure, a decentralized procedure or a national procedure.

Centralized
Authorization Procedure

The
centralized procedure enables applicants to obtain a marketing authorization that is valid in all EU Member States based on a single
application. Certain medicinal products (as set out below) must use the centralized authorization procedure to obtain marketing authorization.

The
centralized authorization procedure is mandatory for:

●
medicinal
products developed by means of biotechnological processes such as genetic engineering;

●
advanced
therapy medicinal products as defined in Article 2 of Regulation (EC) No. 1394/2007 on advanced therapy medicinal products (gene-therapy,
somatic cell-therapy or tissue-engineered medicines);

●
medicinal
products containing a new active substance indicated for any of the following:

○
human
immunodeficiency virus;

○
acquired
immune deficiency syndrome;

○
cancer;

○
neurodegenerative
disorder;

○
diabetes;

○
auto-immune
diseases and other immune dysfunctions;

○
viral
diseases; and

○
medicinal
products that are designated as orphan medicinal products pursuant to Regulation (EC) No 141/2000.

The
centralized authorization procedure is optional for other medicinal products if they contain a new active substance for conditions other
than those set out above, or if the applicant shows that the medicinal product concerned constitutes a significant therapeutic, scientific
or technical innovation or that the granting of authorization is in the interest of public health in the EU.

Administrative
Procedure

Under
the centralized authorization procedure, the European Medicines Agency’s (“EMA”) Committee for Medicinal Products for
Human Use (“CHMP”) serves as the scientific committee that renders opinions about the safety, efficacy and quality of medicinal
products for human use on behalf of the EMA. The CHMP has 210 days to adopt an opinion as to whether a marketing authorization should
be granted. The process usually takes longer if additional information is requested, which triggers clock-stops in the procedural timelines.
When an application is submitted for a marketing authorization in respect of a product that is of major interest from the point of view
of public health and in particular from the viewpoint of therapeutic innovation, the applicant may (pursuant to Article 14(9) Regulation
(EC) No 726/2004) request an accelerated assessment procedure. If the CHMP accepts such request, the time-limit of 210 days will be reduced
to 150 days but it is possible that the CHMP can revert to the standard time limit for the centralized procedure if it considers that
it is no longer appropriate to conduct an accelerated assessment. If the opinion is negative, information is given as to the grounds
on which this conclusion was reached. After the adoption of the CHMP opinion, a decision on the MAA must be adopted by the European Commission,
which is issued within 67 days of the EMA opinion.

18

Conditional
Approval

In
specific circumstances, EU legislation (Article 14(7) Regulation (EC) No 726/2004 and Regulation (EC) No 507/2006 on conditional marketing
authorizations for medicinal products for human use) enables applicants to obtain a conditional marketing authorization prior to obtaining
the comprehensive clinical data required for an application for a full marketing authorization. Such conditional approvals may be granted
for product candidates (including medicines designated as orphan medicinal products) if (1) the risk-benefit balance of the product candidate
is positive, (2) it is likely that the applicant will be in a position to provide the required comprehensive clinical trial data, (3)
the product fulfills unmet medical needs and (4) the benefit to public health of the immediate availability on the market of the medicinal
product concerned outweighs the risk inherent in the fact that additional data are still required. A conditional marketing authorization
may contain specific obligations to be fulfilled by the marketing authorization holder following grant of the market authorization, including
obligations with respect to the completion of ongoing or new studies, and with respect to the collection of pharmacovigilance data. Conditional
marketing authorizations are valid for one year, and may be renewed annually, if the risk-benefit balance remains positive, and after
an assessment of the need for additional or modified conditions and/or specific obligations. The timelines for the centralized procedure
described above also apply with respect to the review by the CHMP of applications for a conditional marketing authorization.

Marketing
Authorization under Exceptional Circumstances

Under
Article 14(8) Regulation (EC) No 726/2004, products for which the applicant can demonstrate that comprehensive data (in line with the
requirements laid down in Annex I of Directive 2001/83/EC, as amended) cannot be provided (due to specific reasons foreseen in the legislation)
might be eligible for marketing authorization under exceptional circumstances. This type of authorization is reviewed annually to reassess
the risk-benefit balance. The fulfillment of any specific procedures/obligations imposed as part of the marketing authorization under
exceptional circumstances is aimed at the provision of information on the safe and effective use of the product and will normally not
lead to the completion of a full dossier/approval.

Market
Authorizations Granted by Authorities of EU Member States

In
general, if the centralized procedure is not mandatory or followed, there are three alternative procedures as prescribed in Directive
2001/83/EC:

●
The
decentralized procedure allows applicants to file identical applications to several EU Member States and receive simultaneous national
approvals based on the recognition by EU Member States of an assessment by a reference Member State.

●
The
mutual recognition procedure is based on the acceptance by the competent authorities of the EU Member States of the marketing authorization
of a medicinal product by the competent authorities of another EU Member State.

●
The
national procedure is only available for products intended to be authorized in a single EU Member State.

An
EU marketing authorization may only be granted to an applicant established in the EU.

19

Pediatric
Studies

Prior
to obtaining a marketing authorization in the EU, applicants have to demonstrate compliance with all measures included in an EMA-approved
Pediatric Investigation Plan (“PIP”) covering all subsets of the pediatric population, unless the EMA has granted a product-specific
waiver, a class waiver, or a deferral for one or more of the measures included in the PIP. The respective requirements for all marketing
authorization procedures are set forth in Regulation (EC) No 1901/2006, which is referred to as the Pediatric Regulation. This requirement
also applies when a company wants to add a new indication, pharmaceutical form or route of administration for a medicine that is already
authorized. The Pediatric Committee of the EMA (“PDCO”) may grant deferrals for some medicines, allowing a company to delay
development of the medicine in children until there is enough information to demonstrate its effectiveness and safety in adults. The
PDCO may also grant waivers when development of a medicine in children is not needed or is not appropriate, such as for diseases that
only affect the elderly population.

Before
an MAA can be filed, or an existing marketing authorization can be amended, the EMA determines that companies actually comply with the
agreed studies and measures listed in each relevant PIP.

Periods
of Authorization and Renewals

A
marketing authorization is valid for five years in principle and the marketing authorization may be renewed after five years on the basis
of a re-evaluation of the risk-benefit balance by the EMA (for a centrally authorized product) or the competent authority of the authorizing
EU Member State (for a product with a national authorization). To this end, the marketing authorization holder must provide the EMA or
the competent authority with a consolidated version of the file in respect of quality, safety and efficacy, including all variations
introduced since the marketing authorization was granted, at least nine months before the marketing authorization ceases to be valid.
Once renewed, the marketing authorization is valid for an unlimited period, unless the European Commission or the competent authority
decides, on justified grounds relating to pharmacovigilance, to proceed with one additional five-year renewal. Any authorization of a
medicinal product which is not followed by the actual placing of the product on the EU market (in case of centralized procedure) or on
the market of the authorizing EU Member State within three years after authorization ceases to be valid (the so-called sunset clause).

Orphan
Designation and Exclusivity

Pursuant
to Regulation (EC) No 141/2000 and Regulation (EC) No. 847/2000, the European Commission can grant orphan medicinal product designation
where the sponsor can establish that the product is intended for the diagnosis, prevention or treatment of a life-threatening or chronically
debilitating condition affecting not more than five in 10,000 people in the EU when the application is made, or for a life threatening,
seriously debilitating or serious and chronic condition in the EU and that without incentives it is unlikely that the product would generate
a sufficient return in the EU to justify the necessary investment in its development. In addition, the sponsor must establish that there
is no other satisfactory method approved in the EU of diagnosing, preventing or treating the condition, or if such a method exists, the
proposed orphan product will be of significant benefit to patients.

Orphan
designation is not a marketing authorization. It is a designation that provides a number of benefits, including fee reductions, regulatory
assistance, and the possibility to apply for a centralized EU marketing authorization, as well as ten years of market exclusivity following
grant of a marketing authorization. During this market exclusivity period, neither the EMA, the European Commission nor the EU Member
States can accept an application or grant a marketing authorization for a “similar medicinal product” for the same therapeutic
indication as the authorized orphan product. A “similar medicinal product” is defined as a medicinal product containing a
similar active substance or substances as those contained in an authorized orphan medicinal product and that is intended for the same
therapeutic indication. The market exclusivity period for the authorized therapeutic indication may be reduced to six years if, at the
end of the fifth year, it is established that the orphan designation criteria are no longer met, including where it is shown that the
product is sufficiently profitable not to justify maintenance of market exclusivity. In addition, a similar medicinal product may, in
limited circumstances, be authorized prior to the expiration of the market exclusivity period, including if it is shown to be safer,
more effective or otherwise clinically superior to the already approved orphan product. Furthermore, a product can lose orphan designation,
and the related benefits, prior to obtaining a marketing authorization if it is demonstrated that the orphan designation criteria are
no longer met.

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Regulatory
Data Protection

EU
legislation also provides for a system of regulatory data and market exclusivity. According to Article 14(11) of Regulation (EC) No 726/2004,
and Article 10(1) of Directive 2001/83/EC, upon receiving marketing authorization, new active substances approved on the basis of complete
and independent data package benefit from eight years of data exclusivity and an additional two years of market exclusivity. Data exclusivity
prevents applicants for generic or biosimilar products from referencing the data contained in the dossier of the reference product when
applying for a generic or biosimilar marketing authorization in the EU, for a period of eight years from the date on which the reference
product was first authorized in the EU. During the additional two-year period of market exclusivity, a generic or biosimilar marketing
authorization application can be submitted, and the innovator’s data may be referenced, but no generic medicinal product can be
marketed until the expiration of the market exclusivity. The overall ten-year period will be extended to a maximum of eleven years if,
during the first eight years of those ten years, the marketing authorization holder (“MAH”) obtains an authorization for
one or more new therapeutic indications which, during the scientific evaluation prior to their authorization, are held to bring a significant
clinical benefit in comparison with existing therapies. Even if a compound is considered to be a new active substance and the innovator
is able to gain the period of data exclusivity, another company nevertheless could also market another version of the product if such
company obtained marketing authorization based on an MAA with a complete and independent data package of pharmaceutical tests, preclinical
tests and clinical trials.

Regulatory
Requirements after a Marketing Authorization Has Been Obtained

If
we obtain authorization for a medicinal product in the EU, we will be required to comply with a range of requirements applicable to the
manufacturing, marketing, promotion and sale of medicinal products.

Pharmacovigilance
and Other Requirements

We
will, for example, have to comply with the EU’s stringent pharmacovigilance or safety reporting rules, pursuant to which post-authorization
studies and additional monitoring obligations can be imposed. Other requirements relate, for example, to the manufacturing of products
and APIs in accordance with good manufacturing practice standards. EU regulators may conduct inspections to verify our compliance with
applicable requirements, and we will have to continue to expend time, money and effort to remain compliant. Non-compliance with EU requirements
regarding safety monitoring or pharmacovigilance, and with requirements related to the development of products for the pediatric population,
can also result in significant financial penalties in the EU. Similarly, failure to comply with the EU’s requirements regarding
the protection of individual personal data can also lead to significant penalties and sanctions. Individual EU Member States may also
impose various sanctions and penalties in case we do not comply with locally applicable requirements.

Manufacturing

The
manufacturing of authorized product, for which a separate manufacturer’s license is mandatory, must be conducted in strict compliance
with the EMA’s Good Manufacturing Practices (“GMP”) requirements and comparable requirements of other regulatory bodies
in the EU, which mandate the methods, facilities and controls used in manufacturing, processing and packing of products to assure their
safety and identity. The EMA enforces its current GMP requirements through mandatory registration of facilities and inspections of those
facilities. The EMA may have a coordinating role for these inspections while the responsibility for carrying them out rests with the
EU Member States competent authority under whose responsibility the manufacturer falls. Failure to comply with these requirements could
interrupt supply and result in delays, unanticipated costs and lost revenues, and could subject the applicant to potential legal or regulatory
action, including but not limited to warning letters, suspension of manufacturing, seizure of product, injunctive action or possible
civil and criminal penalties.

Marketing
and Promotion

The
marketing and promotion of authorized products, including industry-sponsored continuing medical education and advertising directed toward
the prescribers of drugs and/or the general public, are strictly regulated in the EU under Directive 2001/83/EC and EU Member States’
national law implementing it. The applicable regulations aim to ensure that information provided by holders of marketing authorizations
regarding their products is truthful, balanced and accurately reflects the safety and efficacy claims authorized by the EMA or by the
competent authority of the authorizing EU Member State. Failure to comply with these requirements can result in adverse publicity, warning
letters, corrective advertising and potential civil and criminal penalties.

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Patent
Term Extension

In
order to compensate the patentee for delays in obtaining a marketing authorization for a patented product, a supplementary protection
certificate (“SPC”) may be granted extending the exclusivity period for that specific product by up to five years.

A
six-month pediatric extension of an SPC may be obtained where the patentee has carried out an agreed pediatric investigation plan, the
authorized product information includes information on the results of the studies and the product is authorized in all Member States
of the EU. The six-month pediatric extension of SPCs is not available for medicinal products that are designated as orphan medicinal
products, as such products benefit from a separate two-year pediatric extension of orphan status and exclusivity. The six-month pediatric
extension of SPCs is, however, available for medicinal products which were originally designated as orphan medicinal products but were
subsequently (voluntarily) removed from the EU’s Register of Orphan Medicinal Products.

All
of the aforementioned EU rules are generally applicable in the European Economic Area which includes the EU Member States, Iceland, Liechtenstein
and Norway.

Reform
of the Regulatory Framework in the European Union

The
European Commission introduced legislative proposals in April 2023 that, if implemented, will replace the current regulatory framework
in the EU for all medicines (including those for rare diseases and for children). The European Commission has provided the legislative
proposals to the European Parliament and the European Council for their review and approval, and in April 2024, the European Parliament
proposed amendments to the legislative proposals. Once the European Commission’s legislative proposals are approved (with or without
amendment), they will be adopted into EU law.

UK
Regulation

The
UK ceased being a Member State of the EU on January 31, 2020, and the EU and the UK have concluded a trade and cooperation agreement
(“TCA”), which was provisionally applicable since January 1, 2021 and has been formally applicable since May 1, 2021. The
TCA includes specific provisions concerning pharmaceuticals, which include the mutual recognition of GMP, inspections of manufacturing
facilities for medicinal products and GMP documents issued but does not provide for wholesale mutual recognition of UK and EU pharmaceutical
regulations. At present, the UK has implemented previous EU legislation on the marketing, promotion and sale of medicinal products through
the Human Medicines Regulations 2012. Except in respect of the EU Clinical Trials Regulation, the regulatory regime in the UK therefore
aligns in many ways with current EU medicines regulations, however it is possible that these regimes will diverge more significantly
in the future now that the UK’s regulatory system is independent from the EU and the TCA does not provide for mutual recognition
of UK and EU pharmaceutical legislation.

As
a result of the Northern Ireland protocol, following Brexit, the EMA remained responsible for approving novel medicines for supply in
Northern Ireland under the EU centralized procedure, and a separate authorization was required to supply the same medicine in Great Britain
(England, Wales and Scotland). On February 27, 2023, the UK government and the EC announced a political agreement in principle to replace
the Northern Ireland Protocol with a new set of arrangements, known as the “Windsor Framework”. The Windsor Framework was
approved by the EU-UK Joint Committee on March 24, 2023, and the medicines aspects of the Windsor Framework have applied since January
1, 2025. This new framework fundamentally changes the previous system under the Northern Ireland Protocol, including with respect to
the regulation of medicinal products in the UK. In particular, the MHRA is now responsible for approving all medicinal products destined
for the UK market (i.e., Great Britain and Northern Ireland), and the EMA no longer has any role in approving medicinal products destined
for Northern Ireland under the EU centralized procedure. A single UK-wide MA will be granted by the MHRA for all novel medicinal products
to be sold in the UK, enabling products to be sold in a single pack and under a single authorization throughout the UK. In addition,
the new arrangements require all medicines placed on the UK market to be labeled “UK only,” indicating they are not for sale
in the EU.

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The
MHRA has introduced changes to national licensing procedures, including procedures to prioritize access to new medicines that will benefit
patients, an accelerated assessment procedure and new routes of evaluation for novel products and biotechnology products. On January
1, 2024, the MHRA put in place a new international recognition framework which means that the MHRA may have regard to decisions on the
approval of marketing authorizations made by the EMA and certain other regulators when determining an application for a new UK marketing
authorization.

The
MHRA offers a 150-day assessment timeline for all high-quality applications for a UK, Great Britain or Northern Ireland marketing authorization.
The 150 day timeline does not, however, include a “clock-stop” period which may occur if issues arise or points require clarification
following an initial assessment of the application. Such issues should be addressed within a 60-day period, although extensions may be
granted in exceptional cases. There is now no pre-MA orphan designation in the UK. Instead, the MHRA reviews applications for orphan
designation in parallel to the corresponding MAA. The criteria are essentially the same, but have been tailored for the UK market, i.e.,
the prevalence of the condition in the UK (rather than the European Union) must not be more than five in 10,000. Should an orphan designation
be granted, the period of market exclusivity will be set from the date of first approval of the product in the UK.

Foreign
Regulation

In
addition to regulations in the United States, the European Union and the UK, we will be subject to a variety of other foreign regulations
governing clinical trials and commercial sales and distribution of our products. Whether or not we obtain FDA, EMA or MHRA approval for
a product, we must obtain approval by the comparable regulatory authorities of other countries or areas before we may commence clinical
trials or market products in those countries or areas. The approval process and requirements governing the conduct of clinical trials,
product licensing, pricing and reimbursement vary greatly from place to place, and the time may be longer or shorter than that required
for FDA, EMA or MHRA approval.

Pharmaceutical
Pricing and Reimbursement

Sales
of pharmaceutical products depend in significant part on the extent of coverage and reimbursement from government programs, including
Medicare and Medicaid in the U.S., and other third-party payers. Third party payers are sensitive to the cost of drugs and are increasingly
seeking to implement cost containment measures to control, restrict access to, or influence the purchase of drugs, biologicals, and other
health care products and services. Governments may regulate reimbursement, pricing, and coverage of products in order to control costs
or to affect levels of use of certain products. Payers may restrict coverage of some products due to cost concerns, by various means
such as using payer formularies under which only selected drugs are covered, variable co-payments that make drugs that are not preferred
by the payer more expensive in terms of higher out-of-pocket expenses for patients, and by employing utilization management controls,
such as discouraging patients’ use of copay coupons and discount cards and imposing requirements for prior authorization before
a prescription can be billed or prior clinical failure on another type of treatment before a new product can be prescribed. Payers may
especially impose these obstacles to coverage for higher-priced drugs in order to limit the payer’s cost for treatment of the disease.
Consequently, any future products may be subject to payer-driven restrictions, rendering patients responsible for a higher percentage
of the total cost of drugs in the outpatient setting.

In
addition, in some foreign countries, the proposed pricing for a drug must be approved before it may be lawfully marketed. Moreover, the
requirements governing drug pricing and reimbursement vary widely from country to country. For example, in the EU, the national authorities
of the individual EU Member States are free to restrict the range of medicinal products for which their national health insurance systems
provide reimbursement and to control the prices and/or reimbursement of medicinal products for human use. Some individual EU Member States
adopt policies according to which a specific price or level of reimbursement is approved for the medicinal product. Other EU Member States
adopt a system of reference pricing, basing the price or reimbursement level in their territory either, on the pricing and reimbursement
levels in other countries, or on the pricing and reimbursement levels of medicinal products intended for the same therapeutic indication.
Some EU Member States may require the completion of additional studies that compare the cost effectiveness of a particular product candidate
to currently available therapies (so called health technology assessments) in order to obtain reimbursement or pricing approval. Furthermore,
some EU Member States impose direct or indirect controls on the profitability of the company placing the medicinal product on the market.
There can be no assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allow
favorable reimbursement and pricing arrangements for any of our product candidates. Historically, products launched in the EU do not
follow price structures of the U.S. and generally prices tend to be significantly lower.

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U.S.
Healthcare Reform and Other U.S. Healthcare Laws

In
addition to FDA restrictions on marketing of pharmaceutical products, several other types of state and federal healthcare laws, including
those commonly referred to as “fraud and abuse” laws have been applied in recent years to restrict certain marketing practices
in the pharmaceutical industry. These laws impact, among other things, sales, marketing and educational programs associated with approved
products. In addition, patient privacy regulations by both the U.S. federal and state governments as well as pharmaceutical pricing and
transparency requirements also apply to companies that market approved pharmaceutical products.

Sanctions
under these federal and state healthcare laws may include civil monetary penalties, exclusion of a manufacturer’s products from
reimbursement under government programs, monetary damages, criminal fines, disgorgement, additional reporting obligations and oversight
if the manufacture becomes subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with
these laws, and individual imprisonment.

In
addition, there is significant interest in the United States in promoting changes in healthcare system with the stated goals of containing
healthcare costs, improving quality and/or expanding access, including increasing legislative and enforcement interest in the United
States with respect to specialty drug pricing practices, particularly with respect to drugs that have been subject to relatively large
price increases over relatively short time periods. There have been several recent U.S. Congressional inquiries and proposed bills designed
to, among other things, bring more transparency to drug pricing and reform government program reimbursement methodologies for drugs.
Further, Executive Orders relating to the regulation of prescription drug pricing have also been introduced over time. We cannot predict
the scope or impact of future legislative, judicial, or executive efforts to reform healthcare in the United States.

Other
Regulations

We
are also subject to the U.S. Foreign Corrupt Practices Act (“FCPA”), the U.K. Bribery Act (“Bribery Act”), and
other anticorruption laws and regulations pertaining to our financial relationships with foreign government officials. The FCPA prohibits
U.S. companies and their representatives from paying, offering to pay, promising, or authorizing the payment of anything of value to
any foreign government official, government staff member, political party, or political candidate to obtain or retain business or to
otherwise seek favorable treatment. In many countries in which we operate, the healthcare professionals with whom we interact may be
deemed to be foreign government officials for purposes of the FCPA. The Bribery Act, which applies to any company incorporated or doing
business in the UK, prohibits giving, offering, or promising bribes in the public and private sectors, bribing a foreign public official
or private person, and failing to have adequate procedures to prevent bribery amongst employees and other agents. Penalties under the
Bribery Act include potentially unlimited fines for companies and criminal sanctions for corporate officers under certain circumstances.
Liability in relation to breaches of the Bribery Act is strict. This means that it is not necessary to demonstrate elements of a corrupt
state of mind.

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Recent
years have seen a substantial increase in anti-bribery law enforcement activity by U.S. regulators, with more frequent and aggressive
investigations and enforcement proceedings by both the DOJ and the SEC, increased enforcement activity by non-U.S. regulators, and increases
in criminal and civil proceedings brought against companies and individuals. Increasing regulatory scrutiny of the promotional activities
of pharmaceutical companies also has been observed in a number of EU member states. In Germany, a specific anti-corruption provision
with regard to healthcare professionals was introduced in the Criminal Code in 2017.

Similar
strict restrictions are imposed on the promotion and marketing of products in the EU, where a large portion of our non-U.S. business
is conducted, and other territories. Laws in the EU, including in the individual EU Member States, require promotional materials and
advertising for products to comply with the product’s Summary of Product Characteristics (“SmPC”), which is approved
by the competent authorities. Promotion of a medicinal product which does not comply with the SmPC is considered to constitute off-label
promotion. The off-label promotion of medicinal products is prohibited in the EU and in other territories. The promotion of medicinal
products that are not subject to a marketing authorization is also prohibited in the EU. Laws in the EU, including in the individual
EU Member States, also prohibit the direct-to-consumer advertising of prescription-only medicinal products. Violations of the rules governing
the promotion of medicinal products in the EU and in other territories could be penalized by administrative measures, fines and imprisonment.
Furthermore, illegal advertising can be challenged by competitors, and as a result, can be prohibited by court and the responsible company
can be obligated to pay damages to the competitor.

Interactions
between pharmaceutical companies and physicians are also governed by strict laws, regulations, industry self-regulation codes of conduct
and physicians’ codes of professional conduct in the individual EU Member States. The provision of any inducements to physicians
to prescribe, recommend, endorse, order, purchase, supply, use or administer a medicinal product is prohibited. A number of EU Member
States have introduced additional rules requiring pharmaceutical companies to publicly disclose their interactions with physicians and
to obtain approval from employers, professional organizations and/or competent authorities before entering into agreements with physicians.
These rules have been supplemented by provisions of related industry codes, including the EFPIA Disclosure Code on Disclosure of Transfers
of Value from Pharmaceutical Companies to Healthcare Professionals and Healthcare Organizations and related codes developed at national
level in individual EU Member States. Additional countries may consider or implement similar laws and regulations. Violations of these
rules could lead to reputational risk, public reprimands, and/or the imposition of fines or imprisonment. Our present and future business
has been and will continue to be subject to various other laws and regulations. Laws, regulations and recommendations relating to safe
working conditions, laboratory practices, the experimental use of animals, and the purchase, storage, movement, import and export and
use and disposal of hazardous or potentially hazardous substances, including radioactive compounds, used in connection with our research
work are or may be applicable to our activities. We cannot predict the impact of government regulation, which may result from future
legislation or administrative action, on our business.

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Employees
and Human Capital Resources

As
of March 1, 2026, we had 6 employees, 5 of which are full-time, including our Chief Executive Officer, Abizer Gaslightwala, our Executive
Director, Head of Oncology, Satyajit Mitra, Ph.D., and 3 other individuals, 1 of whom are engaged in research and development. None of
our employees are represented by labor unions or covered by collective bargaining agreements, and we consider our relationship with employees
to be good. We also utilize the services of several independent consultants to support our research and development and general and administrative
operations.

We
are focused on effective identification, recruitment, development, and retention of, and compensation and benefits to, human resource
talent, including workforce and management development, diversity and inclusion initiatives, succession planning, and corporate culture
and leadership quality, which are vital to our success. The principal purposes of our equity incentive plans are to attract, retain and
motivate selected employees, consultants and directors through the granting of stock-based compensation awards and cash-based performance
bonus awards.

Corporate
Information

We
were originally established as a private limited company under the laws of England and Wales on October 7, 2004 under the name Freshname
No. 333 Limited. On January 19, 2005, we changed our name to Morria Biopharmaceuticals Limited and on February 3, 2005, we completed
a reverse merger with Morria Biopharmaceuticals Inc., or Morria, a Delaware corporation, in which Morria became our wholly-owned subsidiary
and we re-registered as a non-traded public limited company under the laws of England and Wales. On March 22, 2011, we incorporated an
Israeli subsidiary, Morria Biopharma Ltd. On June 25, 2013, we changed our name to Celsus Therapeutics Plc and on October 13, 2013 Morria
was renamed Celsus Therapeutics Inc. On September 18, 2015, we completed an acquisition of all of the capital stock of Volution Immuno
Pharmaceuticals SA (“Volution”), a private Swiss company, from RPC Pharma Limited (“RPC”), Volution’s sole
shareholder, in exchange for our ordinary shares, in accordance with the terms of a Share Exchange Agreement, dated as of July 10, 2015.
In connection with the acquisition, our name was changed to Akari Therapeutics, Plc. As such, our affairs are governed by our Articles
of Association and the English law.

Puglisi
& Associates (“Puglisi”) serves as our agent for service of process in the United States. Puglisi’s address is
850 Library Avenue, Suite 204, Newark, Delaware 1971.

Our
principal U.S. office is located at 401 East Jackson Street, Suite 3300, Tampa, FL 33602, and our telephone number is (929) 274-7510.
Celsus Therapeutics, Inc. serves as our agent for service of process in the United States.

Information
Available on the Internet

We
use our website (www.akaritx.com), LinkedIn (https://www.linkedin.com/company/akaritx/) and Twitter (https://twitter.com/AkariTX) as
distribution channels for Company information. The information contained on, or that can be accessed through our website, LinkedIn or
Twitter, which may be deemed material, is not part of this Form 10-K and such internet addresses are included in this document solely
as inactive textual references. We make available free of charge through our website our Form 10-K, Quarterly Reports on Form 10-Q, Current
Reports on Form 8-K and exhibits and amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange
Act as soon as reasonably practicable after we electronically file or furnish such materials to the SEC. The SEC maintains an internet
site at www.sec.gov containing reports, proxies and information statements and other information regarding issuers that file electronically
with the SEC.

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