NASDAQ: CDT

Operating
with a lean, asset-agnostic model, the Company prioritizes speed, adaptability, and capital efficiency. We avoid the cost burden of
early and late-stage clinical trials, focusing instead on high-leverage development strategies.

Our
current pipeline includes candidates targeting inflammatory and autoimmune disorders, as well as idiopathic male infertility, dermatology,
and animal health. The intellectual property portfolio comprises pending patent applications in several international jurisdictions describing
a solid-form compound, including the AZD1656 Cocrystal (a HK-4 Glucokinase Activator). Our pipeline research includes a number of compounds
that serve as promising alternatives to existing clinical assets currently marketed and sold by large pharmaceutical companies, which
we have identified as potential opportunities to develop further intellectual property positions through solid-form technology.

On
December 12, 2024, Sarborg and the Company entered into an agreement (the “Sarborg Agreement”) designed to address longstanding
challenges in the pharmaceutical sector, in particular by reducing human error in critical decision-making processes in both clinical
development and asset identification. By integrating Sarborg’s signature intelligence technology, the Company aims to enhance
efficiency, lower costs, and accelerate timelines by minimizing human intervention, ultimately optimizing the drug development cycle
and giving the Company a competitive advantage in the sector. Through this relationship, the Company will gain access to cutting-edge
predictive models and dashboards, enabling the Company to evaluate drug candidates, streamline clinical trials, and optimize asset management
with real-time data. These tools will drive faster, more accurate decisions, improving efficiency and reducing costs. By leveraging these
insights, the Company can differentiate itself in a competitive sector and gain unique data-driven insights that position the Company
for success across both its current and future asset portfolio. Our collaboration with Sarborg enables us to apply proprietary algorithms
utilizing AI-powered disease mapping to identify novel re-purposing opportunities across a database of more than 3,000 disease signatures.
Sarborg’s insights have directly informed two new combination patent filings, strengthening our intellectual property portfolio.
In addition, the Company has initiated pre-clinical in-vitro models to explore new indications, guided by AI-insights without human intervention.
We will seek an exit through third-party license deals following successful in vitro and in vivo pre-clinical trials, entering into agreements
with third parties to pursue further development, FDA approval, commercialization, and marketing of our assets. We continue to evaluate
novel artificial intelligence and cybernetics approaches to drug re-purposing, intellectual property, and asset selection to give the
Company a competitive advantage. Sarborg is considered to be a related party of CDT, as Dr. Andrew Regan, Chief Executive Officer
of CDT, also sits on the board of directors of Sarborg, and Chele Chiavacci Farley, a director of CDT is also a shareholder of
Sarborg. Refer to Note 16 and Note 20 to our financial statements included elsewhere in this Annual
Report for additional details on the relationship between CDT and Sarborg.

A
further partnership with Manoira Corporation (“Manoira”) (as described more in this Annual Report) enables the Company to
expand the scope of its drug portfolio into the animal health market in a cost-efficient manner. This collaboration allows us to accelerate
the understanding of the mechanism of action, safety, and potential efficacy of its portfolio across multiple species, while retaining
100% ownership of all data and intellectual property generated relating to human applications. This is expected to enhance the core human
therapeutic pipeline but also opens potential new revenue streams in the high-growth veterinary market.

1

Repositioning
the Company enables us to explore multiple opportunities in the healthcare, biotech and broader technology innovation. Operating
with a lean disease-agnostic model, the Company prioritizes speed, adaptability, and capital efficiency. We avoid the cost burden of
late-stage clinical trials, focusing instead on high-leverage development strategies. Led by highly experienced executives: Dr.
Freda Lewis-Hall, former Chief Medical Officer of Pfizer Inc., the Chair of the Company’s Board; Dr. Andrew Regan, CEO and
James Bligh, CFO; our management team includes active senior executives who also have an extensive understanding of the
pharmaceutical market, supporting our strategy of developing clinical assets in a cost-efficient manner focused on therapeutic
efficacy.

Simultaneously,
CDT leverages the capabilities of our Cambridge laboratory facility and highly experienced team of solid-form experts to extend or develop
proprietary solid-form intellectual property for our existing and future clinical assets. Our own intellectual property portfolio comprises
pending patent applications in several international jurisdictions describing a solid-form compound, including the AZD1656 Cocrystal
(a HK-4 Glucokinase Activator), targeting a wide range of autoimmune disorders. Our pipeline research includes a number of compounds
that serve as promising alternatives to existing clinical assets currently marketed and sold by large pharmaceutical companies, which
we have identified as having an opportunity to develop further intellectual property positions through solid-form technology.

We
believe that successful pre-clinical trials of the assets in our pipeline
will increase the value of our assets. There is no assurance that any pre-clinical trials on the assets owned or licensed by us will be
successful, however, following a successful pre-clinical trial, we would look to licensing opportunities with large biotech or pharmaceutical
companies, typically for up-front milestone payments and royalty income streams for the life of the asset patent. We anticipate using
any future royalty income stream to develop our asset portfolio in combination with other potential sources of financing, including debt
or equity financing.

Our
Initial Pipeline: HK-4 Glucokinase Activator Cocrystal, AZD1656, and its metabolite AZD5658 and AZD5904

In
August 2024, AstraZeneca granted a license to the Company under certain intellectual property rights controlled by AstraZeneca related
to HK-4 Glucokinase activators AZD1656 and AZD5658 in all indications and myeloperoxidase inhibitor AZD5904 for the treatment, prevention,
and prophylaxis of idiopathic male infertility. The Company will be responsible for development and commercialization of the Licensed
Products under the related License Agreement. The Company is required to use commercially reasonable efforts to develop and commercialize
the Licensed Products.

AstraZeneca
has conducted initial pre-clinical and, in some instances, clinical trials on these assets, but has decided to license them for further
development. As the clinical assets have undergone initial pre-clinical and clinical testing conducted by AstraZeneca, we are able to
use the safety data generated in these clinical trials to assess which clinical assets to further develop and re-purpose.

On
June 3, 2025, the Company entered into a joint development agreement (the “Joint Development Agreement”) with Manoira for
a term of one year, which will be automatically renewed for successive one-year terms unless advance termination notice is provided in
accordance with the terms of the Joint Development Agreement. Manoira is an entity controlled by Dr. Andrew Regan, of which he is sole
director, and is therefore considered a related party of the Company.

Pursuant
to the Joint Development Agreement, the Company granted Manoira a non-exclusive, non-transferable, non-sublicensable, fully paid-up,
royalty-free license to the intellectual property rights related to the pharmaceutical compounds known individually and together as AZD1656
and AZD5658 (the “CDT Assets”). Manoira will evaluate the CDT Assets’ applicability in animal health, explore
veterinary market opportunities, and provide data from the evaluations to inform the Company’s human clinical programs. The license
does not grant Manoira the right to distribute, market, promote or sell the products or services that are related to or incorporate the
CDT Assets.

2

In
addition, we currently have the exclusive rights to develop clinical assets, AZD1656 and AZD5658 in all human indications and AZD5904
in idiopathic male infertility which are licensed to us by AstraZeneca.

Pursuant
to the various programs, AZD1656 underwent Phase I and Phase II clinical trials consisting of 23 studies in 526 subjects, 446 of whom
were dosed with AZD1656. Other than for the intended effect of lowering glucose, there were no difference identified between the AZD1656-treated
and placebo-treated subjects relating to adverse events. All of the cases where low glucose levels were identified were managed by the
patients and resolved. Based on these clinical trials, no safety signals were identified regarding vital signs, safety laboratory values
or electrocardiogram data. No deaths occurred in any studies with healthy volunteers or patients. AZD1656 was also subject to Phase II
clinical trials consisting of two studies where AZD1656 was given to patients with Type 2 Diabetes Mellitus for four months or longer.
In total, there were 754 randomized patients, 516 of whom were exposed to AZD1656 (316 men and 200 women). There were no clinically important
differences in the adverse effects profile between the AZD1656 treatment group and the AZD1656 placebo group and there were no deaths
in either of the Phase II studies. The efficacy of AZD1656 as a potential treatment for diabetes was also assessed during the Phase II
clinical trials, including whether the efficacy was statistically significant. Clinically relevant and statistically significant reductions
in HbA1c were seen after four months; however, the initial improvement in glucose control deteriorated over time and the change in HbA1c
levels after four months were not statistically different than the placebo. This decreasing efficacy over time was seen in both Phase
II studies.

AZD5658
was subject to a randomized, single-blind, placebo-controlled, single-center, Phase I study to assess the safety, tolerability, pharmacokinetics,
pharmacodynamics and the effect of fasting after single ascending oral doses of AZD5658 in Type 2 Diabetes Mellitus patients. There were
six dose levels with eight patients in each cohort, six receiving AZD5658 and two receiving placebo. The effect of fasting on the pharmacokinetics
of AZD5658 was also studied for two dose levels. Each patient treated with metformin received a maximum of two single oral suspension
doses (one on a low dose of AZD5658/placebo and one on a high dose of AZD5658/placebo under fed conditions), except for patients participating
in the evaluation of the effect of fasting, who received a maximum of three single oral suspension doses. For each patient, the study
included a pre-entry visit (Visit 1), two or three clinic-based treatment visits (Visit 2, 3, and 4) and a follow-up visit (Visit 5).
Hence, the total duration of the study for each patient was approximately two and one-half months, assuming three weeks between dose
levels. There were no deaths, serious adverse events, discontinuations due to adverse events, or adverse events of severe intensity during
the study. Overall, there were 13 (61.9%) AZD5658-treated patients with adverse events compared to 2 (28.6%) patients who received placebo.
There were no trends noted with increasing dose in the number of adverse events overall or within any preferred term. The most frequently
occurring adverse events were hypoglycemia and diarrhea, each occurring in three AZD5658-treated patients. One adverse event of ear pain
(30 mg AZD5658 fed) was assessed by the study investigator as moderate in intensity; all other adverse events were of mild intensity.
Five adverse events in AZD5658- treated patients were assessed by the investigator as causally related to investigational product, including
hypoglycemia in three patients (100 mg, 200 mg fasted, and 400 mg AZD5658), diarrhea in one patient (200 mg AZD5658 fasted), and headache
in one patient (30 mg AZD5658). No adverse events in placebo-treated patients were assessed as causally related to investigational product.
The three patients who experienced hypoglycemia adverse events were treated with intake of food or orange juice and the episodes resolved
in less than one hour.

AZD5904
was subject to five Phase I clinical studies, with a total of 1,181 subjects being exposed to AZD5904. Single doses of up to 1200 mg
and multiple doses of up to 325 mg for up to three times per day for 21 days have been administered as an oral solution in the completed
clinical studies. In addition, single doses of up to 1,400 mg and multiple doses of up to 600 mg for 10 days have been administered as
an “extended release” formulation. The data from these studies did not identify any expected adverse drug reactions for AZD5904
and no adverse effects were reported as related to AZD5904. In addition, the data revealed no clinically significant changes in blood
pressure or pulse rate related to AZD5904 and electrocardiogram data was within the physiological range for the population studied. The
effect of AZD5904 on human myeloperoxidase, which we refer to as MPO, activity was evaluated by determination in an ex vivo assay of
MPO activity in plasma. The correlation between MPO activity and plasma concentrations was assessed for single and multiple doses of
AZD5904. A relationship between plasma concentrations of AZD5904 and MPO activity was demonstrated, which indicates that AZD5904 may
be an effective inhibitor of MPO activity in humans. However, Phase I trials do not assess statistical significance so additional Phase
II trials are necessary to determine if the inhibition of MPO activity as a result of AZD5904 is statistically significant.

Our
Development Strategy

The
Company’s strategy is centered on unlocking the untapped value of clinical-stage compounds, particularly those deprioritized by
larger pharmaceutical companies with strong, supporting Phase I safety data. Through advanced co-crystallization and solid-form technologies
developed at our Cambridge facilities, the Company improves drug properties and extends patent life by up to 20 years. In partnership
with Sarborg Limited, the Company also applies AI-powered disease mapping to rapidly identify new therapeutic applications for existing
compounds.

To
enable us to monetize our clinical assets, we, in partnership with CROs
and KOLs, intend to conduct additional pre-clinical trials on our assets in order to generate clinical data to support the further development
of our assets beyond the Phase I stage. In the event successful pre-clinical trial data is generated for an asset with a particular indication,
at that point, we will seek to enter into a license, royalty, or other transaction with a third party whereby the third party would continue
to pursue the development of the clinical asset in clinical trials, including Phase I, where necessary, and beyond. There is no assurance
that any pre-clinical trials on the assets owned or licensed by us will be successful. We intend to use the income received from licensing
assets in our pipeline to fund the development of additional assets, which will allow us to use the existing income stream from assets
that have been licensed to fund our on-going operations, including the development and commercialization of additional assets, without
having to rely solely on debt and/or equity financing.

3

Principal
Strategic Partnerships

Services
Agreement – CDT Equity and Sarborg Limited

On
December 12, 2024, the Company entered into a Services Agreement (the “Sarborg Agreement”) with Sarborg, a Cayman Islands
company and related party of the Company. Under the terms of the Sarborg Agreement, Sarborg agreed to provide algorithmic and cybernetic technology
services to CDT, including the development of decision-support tools and advanced cybernetic systems tailored to enhance CDT’s
decision-making processes and maximize the value of its pharmaceutical asset portfolio.

Sarborg
agreed to perform the services to CDT comprised of three phases: the Initial Phase (0-24 weeks) focuses on establishing a foundation for
collaboration and aligning Sarborg’s services with CDT’s strategic goals; the Development Phase (24-36 weeks) involves
building technological infrastructure, including dashboards and predictive models; and the Ongoing Services Phase (36-52 weeks) ensures
the sustained functionality and relevance of Sarborg’s deliverables while supporting CDT’s growth through iterative improvements
and updates. Sarborg will create specific deliverables, including reports, computer programs, software applications, APIs, mobile applications,
source code, written technical specifications and designs, operating and maintenance manuals, and other recorded data and information
arising from or relating to the services. Sarborg will provide all necessary resources to perform the services and deliver the deliverables
in accordance with the Sarborg Agreement. To date, Sarborg has successfully completed all phases and has achieved all milestones provided for pursuant to the
Sarborg Agreement.

During the year ended December 31, 2025, the Company
incurred costs under the Sarborg Service Agreement, including $1.8 million of milestone payments related to the Services Agreement and
$0.4 million of expense to be capitalized related to the delivery and ongoing use of a diagnostic dashboard. Of the total costs incurred,
$0.4 million was capitalized as a diagnostic asset associated with the dashboard, of which $0.2 million was amortized during the year
and recorded within general and administrative expenses in the consolidated statement of operations and comprehensive loss. The remaining
$2.2 million, consisting of milestone payments and related services (including signature mapping reports), was expensed as incurred within
research and development expenses. As of December 31, 2025, there were no outstanding payables under the Sarborg Service Agreement.

SARBORG
Additional Agreement

Effective March 31, 2025, the Company entered
into an additional license and use agreement (the “Sarborg Additional Agreement”) with Sarborg, a related party, for analysis
of acquired AstraZeneca assets. The agreement provides for $2.0 million in total consideration, payable in cash or stock. On March 31,
2025, the Company prepaid $1.65 million through the issuance of 617 shares of Common Stock, recorded at fair value of $2,670 per share.
The term was extended from six to 12 months on May 2, 2025 at no additional cost. Effective October 1, 2025, the term was extended to
be 12 months from the previous extension to extend the term of the license to March 31, 2027 at no additional cost to the Company. The
Company recorded the fair value of $1.5 million as prepaid within the consolidated balance sheets. During the year ended December 31,
2025, the Company recorded research and development expense of $1.3 million within the consolidated statements of operations and comprehensive
loss related to the Sarborg Additional Agreement. As of December 31, 2025, $0.6 million of the prepaid balance remains within the consolidated
balance sheet.

4

First
Addendum to the SARBORG Additional Agreement

Effective
July 1, 2025 the Company entered into an Addendum (the “First Addendum”) to the Additional Agreement with Sarborg, to expand
the scope to include third-party pharma asset analysis for drug re-purposing using Sarborg’s machine learning platform. The scope
of work was expected to be completed in four weeks, with options for renewal by mutual agreement. The Company paid $0.3 million during
the year ended December 31, 2025 and included the total in the consolidated statement of operations and comprehensive loss.

Second
Addendum to the SARBORG Additional Agreement

Effective
August 11, 2025 the Company entered into Addendum 2 (the “Second Addendum”) to the Additional Agreement with Sarborg to integrate
a Cryptocurrency AI Agent for identifying, forecasting, and recommending digital currencies into CDT Equity’s treasury operations.
The term is a minimum of four months, renewable by mutual agreement. The Company paid $0.3 million during the year ended December 31,
2025 and included the total in the consolidated statement of operations and comprehensive loss.

Consulting
Agreement with NJS Foresight Bio-Advisory, LLC

On
January 2, 2026, the Company entered into a Consulting Agreement, dated December 29, 2025 (the “NJS Agreement”) with NJS
Foresight Bio Advisory, LLC (“NJS”) pursuant to which NJS agreed to provide advisory and business development services
to the Company focused on identification, introduction and support of potential licensing partners in connection with the
out-licensing of the Company’s asset portfolio. Work under the NJS Agreement commenced on December 30, 2025. On February 23,
2026 (the “NJS Effective Date”), the Company and NJS entered into Addendum No. 1 to the NJS Agreement (the “NJS
Addendum”) to extend the term of the NJS Agreement an additional twelve months from its initial termination date, December 29,
2026, to December 29, 2027, unless terminated earlier in accordance with its terms. As consideration for entering into the NJS
Addendum, on the NJS Effective Date, the Company paid an additional one-time fixed retainer of $150,000 (the “NJS Extension
Retainer”) in the form of 7,989 shares of Common Stock (the “NJS Shares”) issued to NJS, valued at $18.77 per share,
the closing price of the Common Stock on February 20, 2026, the trading day prior to the NJS Effective Date. All other terms and
conditions contained in the NJS Agreement remain the same. The Company recorded the $0.2 million consideration to NJS as a prepaid
expense on the Company’s consolidated balance sheet as of December 31, 2025.

Master
Service Agreement – CDT and Charles River Laboratories

On
February 7, 2025, CDT and Charles River Laboratories (“Charles River”) entered into a Master Services Agreement (the
“Charles River MSA”). Under the Charles River MSA, Charles River agreed to provide preclinical testing and research services
to CDT, including the evaluation of compounds in animal models and other related services. The services are defined in individual
Statements of Work (“SOWs”) or Protocols, which outline the specific scope, design, and timelines for each study. To date, all services provided for pursuant to the Charle s River MSA have
been completed. For the year ended December 31, 2025, the Company recognized $0.2 million in research and development expense in
the consolidated statement of operations and comprehensive loss related to the Charles River MSA.

Thesprogen
Consulting Agreement

Effective March 25, 2025, the Company entered
into a Consulting Agreement (the “Consulting Agreement”) with Thesprogen PC (“Thesprogen”), an expert in advising
clients on strategies for pharmaceutical and biotech development. Consulting fees were settled through the issuance of fully vested unregistered
Common Stock shares, valued at the fair value of the shares based on the closing share price of the shares at issuance. The Company recorded
the transaction as prepaid and recognized research and development expense through amortization during the periods ended December 31,
2025. On February 24, 2026 (the “Thesprogen Effective Date”), the Company and Thesprogen entered into Addendum No. 1 to the
Thesprogen Agreement (the “Thesprogen Addendum”) to extend the term of the Thesprogen Agreement an additional twelve months
from its initial termination date, June 28, 2026, to June 28, 2027, unless terminated in accordance with its terms. As consideration for
entering into the Thesprogen Addendum, on the Thesprogen Effective Date, the Company paid an additional one-time fixed retainer of $245,000
(the “Thesprogen Extension Retainer”) in the form of 13,668 shares of Common Stock (the “Thesprogen Shares”) issued
to Thesprogen, valued at $17.93 per share, the closing price of the Common Stock on February 23, 2026, the trading day prior to the Thesprogen
Effective Date. All other terms and conditions contained in the Thesprogen Agreement remain the same. During the year ended December 31,
2025, the Company recorded research and development expense of $0.3 million within the consolidated statements of operations and comprehensive
loss related to the amortization of the prepaid expense.

5

Manoira
Joint Development Agreement

On
June 3, 2025, the Company entered into the Joint Development Agreement with Manoira for a term of one year, which will be automatically
renewed for successive one-year terms unless advance termination notice is provided in accordance with the terms of the Joint Development
Agreement. Manoira is an entity controlled by Dr. Andrew Regan, of which he is sole director, and is therefore considered a related party
of the Company. See Note 16 for additional details.

Under
the agreement, the Company granted Manoira a non-exclusive, non-transferable, royalty-free license to intellectual property rights related
to pharmaceutical compounds AZD1656 and AZD5658. Manoira will evaluate the compounds for animal health applications, explore veterinary
market opportunities, and provide data to inform the Company’s human clinical programs. The license does not permit distribution,
marketing, promotion, or sale of related products.

Consideration was settled through the issuance
of Common Stock shares, valued at fair value based on the closing price of the shares. The Company recorded the fair value of $0.4 million
as prepaid within the consolidated balance sheets. During the year ended December 31, 2025, the Company recorded $0.1 million amortization
expense for research and development activities provided to date.

Market
Overview

Global
Biotechnology Industry

The
global biotechnology industry comprises a large range of companies engaged in diverse activities, such as biopharmaceutical development.
The industry companies also span across a wide spectrum of operational models. Some small, dedicated biotechnology companies are research
and development (“R&D”) intensive and operate primarily with venture capital, grants, initial public offerings and collaborative
agreements. Conversely, large, diversified companies hold significant in-house R&D resources and well-established production, commercialization,
and distribution processes.

Management
believes that the global biotechnology market was valued at $1.77 trillion in 2025 and is projected to grow at a compound annual growth
rate (“CAGR”) of 13.9% from 2025 to 2033.1 The market is driven by strong government support through initiatives
aimed at the modernization of regulatory framework, improvements in approval processes and reimbursement policies, as well as standardization
of clinical studies.

Global
investor confidence has fallen during the period, which served to somewhat subdue revenue growth. However, global investment in R&D
has grown strongly and consistently in recent years, with much of this funding funneled into medical biotechnology development, aimed
at providing better care for the aging global population, thus bolstering industry revenue.

Global
Pharmaceutical Industry

Over
the previous five years, pharmaceutical companies have benefited from an aging population in developed economies and a growing middle
class in emerging economies. Many companies have also tapped into regional demand for pharmaceuticals that may differ from developed
markets and have expanded their global presence to tap into regional market needs.

Patent
cliffs have continued to hamper industry revenue during the current period. When drugs lose patent exclusivity, the market is inundated
with low-cost generic drugs. As manufacturers contend with more price-based competition from generics, many operators respond by lowering
their R&D expenditures, which limits the industry’s drug pipelines. Additionally, many governments and health insurance organizations
have reduced their drug reimbursements to control healthcare costs, such as implementing incentives for patients to use generic drugs.

Industry revenue has expanded at a compound annual
growth rate of approximately 5.4% over the past five years to $857.1 billion, with continued growth of approximately 3.4% expected in
2025, supported by sustained global demand for biotechnology products. However, growth remains dependent on clinical success, regulatory
approvals, manufacturing execution and access to capital, as companies increasingly prioritize capital efficiency, differentiated pipelines
and strategic partnerships in a more selective funding environment.2

1(2026,
January 02). Biotechnology Market Size, Share, and Trends 2026 to 2035. Precedenceresearch.com
https://www.precedenceresearch.com/biotechnology-market.

2
IBISWorld Industry Report L6724-GL – Global Biotechnology, January 2026

6

Manufacturing

The
Company has a lease agreement for approximately 2,100 square feet of space in Cambridge, England, with a term from March 2024 to January
2027. At the Cambridge facility aforementioned, we are developing advanced co-crystallization and solid-form technologies.

We
otherwise do not currently own or operate any facilities to formulate, manufacture, test, store, package, or distribute any of the clinical
assets that we are developing or may seek to develop and do not currently have the capabilities to conduct such activities. We currently
rely on third parties to manufacture, store, and test the clinical assets that we seek to develop. We will depend on third-party suppliers
and manufacturing organizations for all our required raw materials and drug substance and to formulate, manufacture, test, store, package,
and distribute clinical trial quantities of clinical assets that we may seek to develop. We plan to continue to use third-party suppliers
and manufacturing organizations and we anticipate expanding our network of third-party suppliers and manufacturing organizations as our
operations expand.

We
have internal personnel and utilize consultants with extensive technical, manufacturing, analytical, and quality experience to oversee
our contract manufacturing and testing activities. Manufacturing is subject to extensive regulations that impose procedural and documentation
requirements, including, but not limited to, record-keeping, manufacturing processes and controls, personnel, quality control, and quality
assurance. Our systems, procedures, and contractors are required to be in compliance with these regulations and are assessed through
regular monitoring and formal audits.

Research
and Development

Our
research and development activities have included developing co-crystals of AZD1656, and other products, to increase patent life. Most of this work is conducted
in our laboratories based in Cambridge, UK, but parts of this work is completed by third-party CROs but all intellectual property is
retained by us. The successful completion of clinical trials increases the value of clinical assets and may lead to the commercialization
and/or licensing of such assets to other pharmaceutical companies. There is no assurance that any clinical trials on the assets owned
or licensed by us will be successful or any assurance our co-crystal development will be successful.

We
do not intend to further fund the research and development of the use of AZD1656 in Covid; however, we retain an economic interest in
the AZD1656 in the indication of Covid and if AZD1656 is further developed in Covid through funding provided by other third parties,
then we may be entitled to receive compensation from those development activities conducted by third parties due to its economic interest
in AZD1656 in Covid.

Sales
and Marketing

We
do not currently have marketing, sales, or distribution capabilities. In order to commercialize any clinical asset that is approved for
commercial sale, we must either develop our own sales, marketing, and distribution infrastructure or collaborate with third parties that
have such commercial infrastructure and relevant marketing and sales experience. We anticipate relying on licensing, co-sale, co-promotion,
and distribution agreements with strategic partners for the commercialization of our products. We do not currently anticipate that we
would develop our own internal sales force organization.

7

Competition

We
operate in the highly competitive pharmaceutical and biotechnology industry. Our competitors may include public and private companies,
universities, governmental agencies, and other research organizations actively engaged in the research and development of clinical assets
and biopharmaceutical products. Our competitors may have greater financial, technical, and human resources than we currently have and/or
may be better equipped to develop, manufacture, and market their products. Our competitors may be developing clinical assets for products
for similar indications. However, we believe that we have an unprecedented advantage in novelty. As discussed above, AZD1656 is an activator
(not an inhibitor) of a metabolic process. We anticipate that the number of companies seeking to develop clinical assets, biopharmaceutical
products, and therapies will continue to increase. As a result, the competition we face may also increase. However, both in the treatment
of autoimmune disease and idiopathic male infertility the competition is currently expected to come in years, even if biopharmaceutical
products that we develop and/or commercialize were not to compete with products of our competitors based on the product efficacy, safety,
ease of use, price, demonstrated cost-effectiveness, marketing effectiveness, service, reputation, and access to technical information.
However, we believe that our ability to focus on clinical assets that have been deprioritized by larger pharmaceutical companies is a
competitive advantage.

Intellectual
Property

We
hold exclusive rights to develop AZD1656, AZD5658, and AZD5904 through our License Agreement with AstraZeneca and we also own the intellectual
property and the rights to further develop co-crystals resulting from our prior research and development work on AZD1656.

On
December 18, 2024, Conduit UK Management Limited (“Conduit UK”) received a notification from the UK Intellectual Property
Office (“UK IPO”) notifying the company that St George Street Capital had initiated patent entitlement proceedings with
respect to patent application PCT/IB2022/00775 (“Patent Application”). Conduit UK refutes the claims made by St George
Street Capital and filed a counterstatement on February 26, 2025 with the UK IPO. In addition, each of the three inventors named in
the Patent Application filed simultaneous counterstatements fully supporting Conduit UK’s position, and assertions that the
claims are without merit. Further updates will be made following notification by the UK IPO.

We
currently have eight pending patent applications in several international jurisdictions. Even though we have filed patent applications,
there is no guarantee that the validity of the patents will be upheld if challenged by a third party, that patents will be granted on
the applications filed in the respective jurisdictions, or that once granted, the patents will contain claims that encompass our commercial
products. There can be no assurance that any of our intellectual property rights will afford us any protection from competition.

8

The
following patent applications are relevant to the operation of our business:

Related
Clinical Asset

Mechanism
of Action

Patent
Information and Number

Patent

Ownership/Licensing

Status;
Patent Status

Jurisdictions
Protected

Expiration

AZD1656

Glucokinase
Activator

Composition
of Matter Patent; 101901 (family number)

Licensed
to CDT from AstraZeneca for use in all human indications. Granted and in force.

Brazil,
Canada, Switzerland, China, Germany, European Procedure, Spain, France, United Kingdom, Hong Kong, India, Japan, South Korea, Mexico,
Netherlands, Russian Federation, Sweden, Turkey, United States. Granted in Australia

Expires
July 3, 2026.

AZD1656

Glucokinase
Activator

Polymorph
Patent; 103631 (family number)

Licensed
to CDT from AstraZeneca for use in human applications. Granted and in force.

China
and United States

Expires
February 2030.

AZD1656

Glucokinase
Activator

Co-crystal
PCT/IB2022/00075

Owned
by CDT.

Filed
September 2, 2022.

Global

Filing
date September 2, 2022. If granted, will expire September 2, 2042.

AZD1656

Glucokinase
Activator

Co-crystal
JP2022-176753

Owned
by CDT.

Filed
November 2, 2022.

Granted:
Japan

Expires
November 2, 2042.

AZD5904

MPO
Inhibitor

Idiopathic
Male Infertility; AZD5904 use patent; 200644 (family number)

[WO/2019/016074]

Licensed
to CDT from AstraZeneca.

International
Description

Expires
July 12, 2038.

AZD5658

Glucokinase
Activator

Composition
of Matter Patent; 101901 (family number)

Licensed
to CDT from AstraZeneca for use in all human indications. Granted and in force.

Australia,
Brazil, Canada, Switzerland, China, Germany, European Procedure, Spain, France, United Kingdom, Hong Kong, India, Japan, South Korea,
Mexico, Netherlands, Russian Federation, Sweden, Turkey, United States

Expires
July 3, 2026

We
have not filed any applications for trademark protection of any names or logos for products or technologies in development. We plan to
seek trademark protection inside and outside of the United States where and when appropriate and if available. We intend to use these
registered marks in connection with our pharmaceutical research and development, including proprietary technologies, as well as our clinical
assets.

We
expect to protect our products and technologies through a combination of patents, regulatory exclusivity, and potentially confidential
and proprietary know-how. We intend to actively seek to obtain, where appropriate, the broadest commercially reasonable intellectual
property protection possible for our clinical assets and technologies, including any future clinical assets and technologies under development,
our proprietary information, and our proprietary technology through a combination of contractual arrangements and patents, in the United
States and abroad. However, we cannot guarantee that patent protection will provide complete protection against competitors who seek
to circumvent our patents.

9

Government
Regulation and Product Approval

Government
authorities in the United States, at the federal, state, and local level, and in other countries, extensively regulate, among other things,
the research, development, clinical trials, testing, manufacture, including any manufacturing changes, authorization, pharmacovigilance,
adverse event reporting, recalls, packaging, storage, recordkeeping, labeling, advertising, promotion, distribution, marketing, import
and export of pharmaceutical products and clinical assets, including clinical assets such as those we are developing. The processes for
obtaining regulatory approvals in the United States and in foreign countries, along with subsequent compliance with applicable statutes
and regulations have no guaranteed outcomes and require the expenditure of substantial time and financial resources.

Our
development plan for AZD5904 is to conduct clinical trials and if those trials are successful, we will then seek to enter into a transaction
with a third party with respect to AZD5904, as applicable, for the particular indication. Pursuant to the Joint Development Agreement,
the Company granted Manoira a non-exclusive, non-transferable, royalty-free license to intellectual property rights related to pharmaceutical
compounds AZD1656 and AZD5658. Manoira will evaluate the compounds for animal health applications, explore veterinary market opportunities,
and provide data to inform the Company’s human clinical programs. The license does not permit distribution, marketing, promotion,
or sale of related products.

We
anticipate developing clinical assets, which we own or license from third parties, that have undergone pre-clinical and clinical trials
through the Phase II stage and then monetizing such clinical assets through a license, royalty, or other transaction. We do not expect
that we will commercialize any clinical assets or seek marketing approval from the FDA (or similar organizations) as we intend to enter
into agreements with third parties following Phase II clinical trials for each such clinical asset that would provide that such third
party would pursue the further development, commercialization, and marketing of such assets.

The
following description of the process relating to obtaining regulatory approvals in the United States and in foreign countries is intended
for informational purposes only as we do not expect to continue the development of any of the clinical assets beyond the Phase II stage.
There is no assurance that any clinical trials on the assets owned or licensed by us will be successful.

United
States Government Regulation

In
the United States, the FDA regulates drugs under the Federal Food, Drug, and Cosmetic Act (“FDCA”) and implementing regulations.
Failure to comply with the applicable United States requirements at any time during the product development process, approval process
or after approval, may subject an applicant to a variety of administrative or judicial sanctions, such as the FDA’s refusal to
approve pending New Drug Applications (“NDAs”), withdrawal of an approval, imposition of a clinical hold, issuance of warning
letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of
government contracts, restitution, disgorgement or civil and/or criminal penalties.

The
process required by the FDA before a drug may be marketed in the United States generally involves the following steps, each of which
requires the expenditure of substantial time and financial resources:

●
completion
of preclinical laboratory tests, animal studies and formulation studies in compliance with good laboratory practices (“GLPs”)
and other applicable regulations;

●
submission
to the FDA of an Investigational New Drug Application (“IND”), which must become effective before human clinical trials
may begin;

●
approval
by an independent institutional review board (“IRB”) at each clinical site before each trial may be initiated;

●
performance
of well-controlled human clinical trials in accordance with good clinical practices (“GCPs”), which may include placebo
controls, to establish the safety and efficacy of the proposed drug product for each indication;

●
submission
to the FDA of an NDA and payment of fees;

●
satisfactory
completion of an FDA advisory committee review, if applicable;

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

●
satisfactory
completion of audits of clinical trial sites conducted by FDA to assure compliance with GCPs and the integrity of clinical data;
and

●
FDA
review and approval of the NDA.

10

Preclinical
Studies

Preclinical
studies include laboratory evaluation of product chemistry, toxicity, and formulation, as well as animal studies to assess potential
safety and efficacy. Preclinical tests intended for submission to the FDA to support the safety of a clinical asset must be conducted
in compliance with GLP regulations and the U.S. Department of Agriculture’s Animal Welfare Act. A drug sponsor must submit the
results of the preclinical tests, together with manufacturing information, analytical data and any available ex-U.S. clinical data or
relevant literature, among other things, to the FDA as part of an IND. Some nonclinical testing may continue even after the IND is submitted.
An IND automatically becomes effective 30 days after receipt by the FDA, unless before that time the FDA raises concerns or questions
related to one or more proposed clinical trials and places the clinical trial on a clinical hold. In such a case, the IND sponsor and
the FDA must resolve any outstanding concerns before the clinical trial can begin. As a result, submission of an IND may not result in
the FDA allowing clinical trials to commence. A clinical hold may occur at any time during the life of an IND and may affect one or more
specific studies or all studies conducted under the IND.

Furthermore,
the FDA or the sponsor may suspend or terminate a clinical trial at any time on various grounds, including a finding that the research
subjects are being exposed to an unacceptable health risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at
its institution if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the drug candidate
has been associated with unexpected serious harm to patients.

Clinical
Trials

Clinical
trials involve the administration of the investigational new drug to human subjects under the supervision of qualified investigators
in accordance with GCP requirements, which include the requirement that all research subjects provide their informed consent in writing
for their participation in any clinical trial along with the requirement to ensure that the data and results reported from the clinical
trials are credible and accurate. Clinical trials are conducted under protocols detailing, among other things, the objectives of the
trial, the criteria for determining subject eligibility, the dosing plan, the parameters to be used in monitoring safety, the procedure
for timely reporting of adverse events, and the effectiveness criteria to be evaluated. A protocol for each clinical trial and any subsequent
protocol amendments must be submitted to the FDA as part of the IND. In addition, an IRB at each institution participating in the clinical
trial must review and approve the plan for any clinical trial before it commences at that institution.

Information
about certain clinical trials and clinical trial results must be submitted within specific timeframes to the National Institutes of Health
for public dissemination on the Clinicaltrials.gov registry. Failure to timely register a covered clinical study or to submit study results
as provided for in the law can give rise to civil monetary penalties and prevent the non-compliant party from receiving future grant
funds from the federal government. The government has begun enforcing these registration and results reporting requirements against non-compliant
clinical trial sponsors.

Human
clinical trials are typically conducted in at least three sequential phases and occasionally four or more, which may require repetition,
or overlap or be combined:

Phase
I: The drug candidate is initially introduced into healthy human subjects or patients with the target disease or condition and
tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an early indication of
its effectiveness. During Phase I clinical trials, sufficient information about the investigational drug’s pharmacokinetics and
pharmacological effects may be obtained to permit the design of well-controlled and scientifically valid Phase II clinical trials.

Phase
II: The drug candidate is administered to a larger, but still limited patient population to identify possible adverse effects
and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted indications and to determine dosage tolerance
and optimal dosage. Phase II clinical trials are typically well-controlled and closely monitored.

Phase
III: The drug candidate is administered to an expanded patient population, generally at geographically dispersed clinical trial
sites, in well-controlled clinical trials to generate enough data to statistically evaluate the efficacy and safety of the product for
approval, to establish the overall risk-benefit profile of the product, and to provide adequate information for the labeling of the product.
Phase III clinical trials usually involve a larger number of participants than a Phase II clinical trial.

There
is no guarantee that a clinical asset will successfully complete any such clinical trials. There is no assurance that any clinical trials
on the assets owned or licensed by CDT will be successful.

11

Interactions
with FDA During the Clinical Development Program

Following
the clearance of an IND and the commencement of clinical trials, the sponsor of such trial will continue to have interactions with the
FDA. Progress reports detailing the results of clinical trials must be submitted at least annually to the FDA and more frequently if
serious adverse events occur. In addition, IND safety reports must be submitted to the FDA for any of the following: serious and unexpected
suspected adverse reactions; findings from other studies or animal or in vitro testing that suggest a significant risk in humans exposed
to the product; and any clinically important increase in the occurrence of a serious suspected adverse reaction over that listed in the
protocol or investigator brochure.

In
addition, sponsors are given opportunities to meet with the FDA at certain points in the clinical development program. Specifically,
sponsors may meet with the FDA prior to the submission of an IND (“pre-IND meeting”), at the end of Phase II clinical trial
(“EOP2” meeting) and before an NDA is submitted (“pre-NDA meeting”). Meetings at other times may also be requested.
These meetings provide an opportunity for the sponsor to share information about the data gathered to date with the FDA and for the FDA
to provide advice on the next phase of development. For example, at an EOP2, a sponsor may discuss its Phase II clinical results and
present its plans for the pivotal Phase III clinical trial(s) that it believes will support the approval of the new product. Such meetings
may be conducted in person, via teleconference/videoconference or written response only with minutes reflecting the questions that the
sponsor posed to the FDA and the agency’s responses. The FDA has indicated that its responses, as conveyed in meeting minutes and
advice letters, only constitute recommendations and/or advice made to a sponsor and, as such, sponsors are not bound by such recommendations
and/or advice. Nonetheless, from a practical perspective, a sponsor’s failure to follow the FDA’s recommendations for design
of a clinical program may put the program at significant risk of failure.

Acceptance
of NDAs

Assuming
successful completion of the required clinical testing, the results of the preclinical studies and clinical trials, along with information
relating to the product’s chemistry, manufacturing, controls, safety updates, patent information, abuse information and proposed
labeling, are submitted to the FDA as part of an application requesting approval to market the clinical asset for one or more indications.
Data may come from company-sponsored clinical trials intended to test the safety and efficacy of a product’s use or from a number
of alternative sources, including studies initiated by investigators. To support marketing approval, the data submitted must be sufficient
in quality and quantity to establish the safety and efficacy of a drug product. The fee required for the submission and review of an
application under the Prescription Drug User Fee Act (“PDUFA”) is substantial, and the sponsor of an approved application
is also subject to an annual program fee assessed based on eligible prescription drug products. These fees are typically adjusted annually,
and exemptions and waivers may be available under certain circumstances, such as where a waiver is necessary to protect the public health,
where the fee would present a significant barrier to innovation, or where the applicant is a small business submitting its first human
therapeutic application for review.

The
FDA conducts a preliminary review of all applications within 60 days of receipt and must inform the sponsor at that time or before whether
an application is sufficiently complete to permit substantive review. In pertinent part, the FDA’s regulations provide that the
agency may refuse to file an application if the application does not include all pertinent information and data necessary for review
by the FDA. In the event that the FDA determines that an application does not satisfy this standard, it will issue a Refuse to File (“RTF”)
determination to the applicant. Typically, an RTF will be based on administrative incompleteness, such as clear omission of information
or sections of required information; scientific incompleteness, such as omission of critical data, information or analyses needed to
evaluate safety and efficacy or provide adequate directions for use; or inadequate content, presentation, or organization of information
such that substantive and meaningful review is precluded. The FDA may request additional information rather than accept an application
for filing. In this event, the application must be resubmitted with the additional information. The resubmitted application is also subject
to review before the FDA accepts it for filing.

12

Review
of NDAs

After
the submission is accepted for filing, the FDA begins an in-depth substantive review of the application. The FDA reviews the application
to determine, among other things, whether the proposed product is safe and effective for its intended use, whether it has an acceptable
purity profile and whether the product is being manufactured in accordance with cGMP.

Under
the goals and policies agreed to by the FDA under PDUFA, the FDA has 10 months from the filing date in which to complete its initial
review of a standard application that is a new molecular entity, and six months from the filing date for an application with “priority
review.” The review process may be extended by the FDA for three additional months to consider new information or in the case of
a clarification provided by the applicant to address an outstanding deficiency identified by the FDA following the original submission.
Despite these review goals, the NDA review process can be very lengthy, and it is not uncommon for FDA review of an application to extend
beyond the PDUFA target action date. Most innovative drug products (other than biological products) obtain FDA marketing approval pursuant
to an NDA submitted under Section 505(b)(1) of the FDCA, commonly referred to as a traditional or “full NDA.” In 1984, with
passage of the Drug Price Competition and Patent Term Restoration Act, informally known as the Hatch-Waxman Act, that established an
abbreviated regulatory scheme authorizing the FDA to approve generic drugs based on an innovator or “reference” product,
Congress also enacted Section 505(b)(2) of the FDCA, which provides a hybrid pathway combining features of a traditional NDA and a generic
drug application. Section 505(b)(2) enables the applicant to rely, in part, on the FDA’s prior findings of safety and efficacy
data for an existing product, or published literature, in support of its application. Section 505(b)(2) NDAs may provide an alternate
path to FDA approval for new or improved formulations or new uses of previously approved products that would require new clinical data
to demonstrate safety or effectiveness. Section 505(b)(2) permits the filing of an NDA in which the applicant relies, at least in part,
on information from studies made to show whether a drug is safe or effective that were not conducted by or for the applicant and for
which the applicant has not obtained a right of reference or use. A Section 505(b)(2) applicant may eliminate or reduce the need to conduct
certain preclinical or clinical studies, if it can establish that reliance on studies conducted for a previously approved product is
scientifically appropriate. The FDA may also require companies to perform additional studies or measurements, including nonclinical and
clinical studies, to support the change from the approved product. The FDA may then approve the new clinical asset for all or some of
the labeled indications for which the referenced product has been approved, as well as for any new indication for which the Section 505(b)(2)
NDA applicant has submitted data.

In
connection with its review of an application, the FDA will typically submit information requests to the applicant and set deadlines for
responses thereto. The FDA will also conduct a pre-approval inspection of the manufacturing facilities for the new product to determine
whether the manufacturing processes and facilities comply with GMPs. The FDA will not approve the product unless it determines that
the manufacturing processes and facilities are in compliance with cGMP requirements and are adequate to assure consistent production
of the product within required specifications.

The
FDA also may inspect the sponsor and one or more clinical trial sites to assure compliance with IND and GCP requirements and the integrity
of the clinical data submitted to the FDA. To ensure cGMP and GCP compliance by its employees and third-party contractors, an applicant
may incur significant expenditure of time, money and effort in the areas of training, record keeping, production and quality control.
The FDA generally accepts data from foreign clinical trials in support of an NDA if the trials were conducted under an IND. If a foreign
clinical trial is not conducted under an IND, the FDA nevertheless may accept the data in support of an NDA if the study was conducted
in accordance with GCPs and the FDA is able to validate the data through an on-site inspection, if deemed necessary. Although the FDA
generally requests that marketing applications be supported by some data from domestic clinical trials, the FDA may accept foreign data
as the sole basis for marketing approval if (1) the foreign data are applicable to the United States population and United States medical
practice, (2) the studies were performed by clinical investigators with recognized competence, and (3) the data may be considered valid
without the need for an on-site inspection or, if the FDA considers the inspection to be necessary, the FDA is able to validate the data
through an on-site inspection or other appropriate means.

The
FDA may also refer an application, including applications for novel clinical asset which present difficult questions of safety or efficacy,
to an advisory committee for review, evaluation and recommendation as to whether the application should be approved and under what conditions.
Typically, an advisory committee is a panel of independent experts, including clinicians and other scientific experts, that reviews,
evaluates and provides a recommendation as to whether the application should be approved and under what conditions. The FDA is not bound
by the recommendation of an advisory committee, but it considers such recommendations when making final decisions on approval.

Data
from clinical trials are not always conclusive, and the FDA or its advisory committee may interpret data differently than the sponsor
interprets the same data. The FDA may also re-analyze the clinical trial data, which could result in extensive discussions between the
FDA and the applicant during the review process or delay, limit or prevent regulatory approval. The FDA may not grant approval on a timely
basis or at all.

The
FDA also may require submission of a risk evaluation and mitigation strategy (“REMS”) if it determines that a REMS is necessary
to ensure that the benefits of the drug product outweigh its risks and to assure the safe use of the product. The REMS could include
medication guides, physician communication plans, assessment plans and/or elements to assure safe use, such as restricted distribution
methods, patient registries or other risk minimization tools. The FDA determines the requirement for a REMS, as well as the specific
REMS provisions, on a case-by-case basis. If the FDA concludes a REMS is needed, the sponsor of the application must submit a proposed
REMS and the FDA will not approve the application without a REMS.

13

Decisions
on NDAs

The
FDA reviews an application to determine, among other things, whether the product is safe and whether it is effective for its intended
use(s), with the latter determination being made on the basis of substantial evidence. The term “substantial evidence” is
defined under the FDCA as “evidence consisting of adequate and well-controlled investigations, including clinical investigations,
by experts qualified by scientific training and experience to evaluate the effectiveness of the drug involved, on the basis of which
it could fairly and responsibly be concluded by such experts that the drug will have the effect it purports or is represented to have
under the conditions of use prescribed, recommended, or suggested in the labeling or proposed labeling thereof.”

The
FDA has interpreted this evidentiary standard to require at least two adequate and well-controlled clinical investigations to establish
effectiveness of a new product. Under certain circumstances, however, the FDA has indicated that a single trial with certain characteristics
and additional information may satisfy this standard. This approach was subsequently endorsed by Congress in 1998 with legislation providing,
in pertinent part, that “If [the FDA] determines, based on relevant science, that data from one adequate and well-controlled clinical
investigation and confirmatory evidence (obtained prior to or after such investigation) are sufficient to establish effectiveness, the
FDA may consider such data and evidence to constitute substantial evidence.” This modification to the law recognized the potential
for the FDA to find that one adequate and well controlled clinical investigation with confirmatory evidence, including supportive data
outside of a controlled trial, is sufficient to establish effectiveness. In December 2019, the FDA issued draft guidance further explaining
the studies that are needed to establish substantial evidence of effectiveness, and in September 2023 it issued a draft guidance that
complements the 2019 draft guidance. The FDA has not yet finalized either guidance.

After
evaluating the application and all related information, including the advisory committee recommendations, if any, and inspection reports
of manufacturing facilities and clinical trial sites, the FDA will issue either a Complete Response Letter (“CRL”) or an
approval letter. To approve the application, the FDA must determine that the drug is effective and that its expected benefits outweigh
its potential risks to patients. This “benefit-risk” assessment is informed by the extensive body of evidence about the product’s
safety and efficacy in the NDA. This assessment is also informed by other factors, including: the severity of the underlying condition
and how well patients’ medical needs are addressed by currently available therapies; uncertainty about how the premarket clinical
trial evidence will extrapolate to real-world use of the product in the post-market setting; and whether risk management tools are necessary
to manage specific risks. In connection with this assessment, the FDA review team will assemble all individual reviews and other documents
into an “action package,” which becomes the record for FDA review. The review team then issues a recommendation, and a senior
FDA official makes a decision.

A
CRL indicates that the review cycle of the application is complete, and the application will not be approved in its present form. A CRL
generally outlines the deficiencies in the submission and may require substantial additional testing or information in order for the
FDA to reconsider the application. The CRL may require additional clinical or other data, additional pivotal Phase III clinical trial(s)
and/or other significant and time-consuming requirements related to clinical trials, preclinical studies or manufacturing. If a CRL is
issued, the applicant will have one year to respond to the deficiencies identified by the FDA, at which time the FDA can deem the application
withdrawn or, in its discretion, grant the applicant an additional six-month extension to respond. The FDA has committed to reviewing
resubmissions in response to an issued CRL in either two or six months depending on the type of information included. Even with the submission
of this additional information, however, the FDA ultimately may decide that the application does not satisfy the regulatory criteria
for approval.

An
approval letter, on the other hand, authorizes commercial marketing of the product with specific prescribing information for specific
indications. That is, the approval will be limited to the conditions of use (e.g., patient population, indication) described in
the FDA-approved labeling. Further, depending on the specific risk(s) to be addressed, the FDA may require that contraindications, warnings
or precautions be included in the product labeling, require that post-approval trials, including Phase 4 clinical trials, be conducted
to further assess a product’s safety after approval, require testing and surveillance programs to monitor the product after commercialization
or impose other conditions, including distribution and use restrictions or other risk management mechanisms under a REMS which can materially
affect the potential market and profitability of the product. The FDA may prevent or limit further marketing of a product based on the
results of post-marketing trials or surveillance programs. After approval, some types of changes to the approved product, such as adding
new indications, manufacturing changes and additional labeling claims, are subject to further testing requirements and FDA review and
approval.

14

Special
FDA Expedited Review Programs

The
FDA is authorized to designate certain products for expedited development or review if they are intended to address an unmet medical
need in the treatment of a serious or life-threatening disease or condition. These programs include fast track designation, breakthrough
therapy designation, and priority review designation. The purpose of these programs is to provide important new drugs to patients earlier
than under standard FDA review procedures.

To
be eligible for a fast-track designation, the FDA must determine, based on the request of a sponsor, that a product is intended to treat
a serious or life-threatening disease or condition and demonstrates the potential to address an unmet medical need. The FDA will determine
that a product will fill an unmet medical need if it will provide a therapy where none exists or provide a therapy that may be potentially
superior to existing therapy based on efficacy or safety factors. Fast track designation provides additional opportunities for interaction
with the FDA’s review team and may allow for a rolling review of NDA components before the completed application is submitted. If the sponsor provides a schedule for the submission of the sections of the NDA, the FDA agrees to accept sections of the NDA and determines
that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the NDA. In addition,
fast track designation may be withdrawn by the sponsor or rescinded by the FDA if the designation is no longer supported by data emerging
in the clinical trial process.

In
addition, with the enactment of the FDA Safety and Innovation Act (“FDASIA”) in 2012, Congress created a new regulatory program
for therapeutic candidates designated by FDA as “breakthrough therapies” upon a request made by the IND sponsors. A breakthrough
therapy is defined as a drug that is intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening
disease or condition, and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing
therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.
The FDA must take certain actions with respect to breakthrough therapies, such as holding timely meetings with and providing advice to
the product sponsor, intended to expedite the development and review of an application for approval of a breakthrough therapy.

Finally,
the FDA may designate a product for priority review if it is a drug that treats a serious condition and, if approved, would provide a
significant improvement in safety or effectiveness. The FDA determines at the time that the marketing application is submitted, on a
case-by-case basis, whether the proposed drug represents a significant improvement in treatment, prevention or diagnosis of disease when
compared with other available therapies. Significant improvement may be illustrated by evidence of increased effectiveness in the treatment
of a condition, elimination or substantial reduction of a treatment-limiting drug reaction, documented enhancement of patient compliance
that may lead to improvement in serious outcomes, or evidence of safety and effectiveness in a new subpopulation. A priority review designation
is intended to direct overall attention and resources to the evaluation of such applications, and to shorten the FDA’s goal for
taking action on a marketing application from ten months to six months for an NDA for a new molecular entity from the date of filing.

Even
if a product qualifies for one or more of these programs, the FDA may later decide that the product no longer meets the conditions for
qualification or decide that the time period for FDA review or approval will not be shortened. Furthermore, fast track designation, breakthrough
therapy designation and priority review do not change the standards for approval and may not ultimately expedite the development or approval
process.

Accelerated
Approval Pathway

In
addition, a product studied for its safety and effectiveness in treating serious or life-threatening illnesses and that provide meaningful
therapeutic benefit over existing treatments may receive accelerated approval, meaning that it may be approved on (i) the basis of adequate
and well-controlled clinical trials establishing that the drug product has an effect on a surrogate endpoint that is reasonably likely
to predict clinical benefit, or (ii) on an intermediate clinical endpoint that can be measured earlier than irreversible morbidity or
mortality (“IMM”) and that is reasonably likely to predict an effect on IMM or other clinical benefits, taking into account
the severity, rarity or prevalence of the condition and the availability or lack of alternative treatments. As a condition of approval,
the FDA may require a sponsor of a drug receiving accelerated approval to perform post-marketing studies to verify and describe the predicted
effect on IMM or other clinical endpoints, and the drug may be subject to expedited withdrawal procedures. Drugs granted accelerated
approval must meet the same statutory standards for safety and effectiveness as those granted traditional approval.

The
accelerated approval pathway is usually contingent on a sponsor’s agreement to conduct, in a diligent manner, additional post-approval
confirmatory studies to verify and describe the drug’s clinical benefit. As a result, a therapeutic candidate approved on this
basis is subject to rigorous post-marketing compliance requirements, including the completion of Phase 4 or post-approval clinical trials
to confirm the effect on the clinical endpoint. Failure to conduct required post-approval studies, or to confirm the predicted clinical
benefit of the product during post-marketing studies, would allow the FDA to withdraw approval of the drug. All promotional materials
for drug products being considered and approved under the accelerated approval program are subject to prior review by the FDA. Lawmakers,
FDA officials, and other stakeholders continually evaluate the accelerated approval program which may lead to legislative and/or administrative
changes in the future.

15

Post-Approval
Requirements

Drugs
manufactured or distributed pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among
other things, requirements relating to recordkeeping, periodic reporting, product sampling and distribution, advertising and promotion
and reporting of adverse experiences with the product. After approval, most changes to the approved product, such as adding new indications
or other labeling claims, are subject to prior FDA review and approval. Certain modifications to the product, including changes in indications
or manufacturing processes or facilities, may require the applicant to develop additional data or conduct additional preclinical studies
and clinical trials to support the submission to FDA. As previously noted, there also are continuing, annual user fee requirements for
any marketed products, as well as new application fees for supplemental applications with clinical data.

The
FDA may impose a number of post-approval requirements as a condition of approval of an NDA. For example, the FDA may require post-marketing
testing, including Phase 4 clinical trials, and surveillance to further assess and monitor the product’s safety and effectiveness
after commercialization.

In
addition, FDA regulations require that products be manufactured in specific approved facilities and in accordance with cGMPs. The cGMP
regulations include requirements relating to the organization of personnel, buildings and facilities, equipment, control of components
and drug product containers and closures, production and process controls, packaging and labeling controls, holding and distribution,
laboratory controls, records and reports and returned or salvaged products. Drug manufacturers and other entities involved in the manufacture
and distribution of approved drugs are required to register their establishments with the FDA and some state agencies and are subject
to periodic unannounced inspections by the FDA for compliance with cGMP requirements and other laws. Changes to the manufacturing process
are strictly regulated and, depending on the significance of the change, may require prior FDA approval before being implemented. FDA
regulations also require investigation and correction of any deviations from cGMP and impose reporting and documentation requirements
upon the sponsor and any third-party manufacturers. Accordingly, manufacturers must continue to expend time, money, and effort in production
and quality control to maintain compliance with cGMP and other aspects of quality control and quality assurance.

The
FDA strictly regulates the marketing, labeling, advertising and promotion of drug products that are placed on the market. A product cannot
be commercially promoted before it is approved, and approved drugs may generally be promoted only for their approved indications and
for use in patient populations described in the product’s approved labeling. Promotional claims must also be consistent with the
product’s FDA-approved label, including claims related to safety and effectiveness. The government closely scrutinizes the promotion
of prescription drugs in specific contexts such as direct-to-consumer advertising, industry-sponsored scientific and educational activities,
and promotional activities involving the Internet and social media. Although physicians may prescribe legally available products for
off-label uses, manufacturers may not market or promote such uses.

Later
discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing
processes, or failure to comply with regulatory requirements, may result in mandatory revisions to the approved labeling to add new safety
information; imposition of post-market studies or clinical trials to assess new safety risks; or imposition of distribution or other
restrictions under a REMS program. Other potential consequences of regulatory non-compliance include, among other things:

●
restrictions
on, or suspensions of, the marketing or manufacturing of the product, complete withdrawal of the product from the market or product
recalls;

●
interruption
of production processes, including the shutdown of manufacturing facilities or production lines or the imposition of new manufacturing
requirements;

●
fines,
warning letters or other enforcement letters or clinical holds on post-approval clinical trials;

●
mandated
modification of promotional materials and labeling and the issuance of corrective information;

●
refusal
of the FDA to approve pending NDAs or supplements to approved NDAs, or suspension or revocation of product approvals;

●
product
seizure or detention, or refusal to permit the import or export of products;

●
injunctions
or the imposition of civil or criminal penalties; or

●
consent
decrees, corporate integrity agreements, debarment, or exclusion from federal healthcare programs.

16

In
addition, the distribution of prescription pharmaceutical products is subject to the Prescription Drug Marketing Act (“PDMA”)
which regulates the distribution of drugs and drug samples at the federal level and sets minimum standards for the registration and regulation
of drug distributors by the states. Both the PDMA and state laws limit the distribution of prescription pharmaceutical product samples
and impose requirements to ensure accountability in distribution. The Drug Supply Chain Security Act (the “DSCSA”), was enacted
with the aim of building an electronic system to identify and trace certain prescription drugs distributed in the United States. The
DSCSA mandated phased-in and resource-intensive obligations for pharmaceutical manufacturers, wholesale distributors and dispensers by
November 2023, but so as not to disrupt supply chains, the FDA has granted certain exemptions from enhanced drug distribution security
requirements for eligible trading partners for particular periods of time. From time to time, new legislation and regulations may be
implemented that could significantly change the statutory provisions governing the approval, manufacturing and marketing of products
regulated by the FDA. For example, the FDA released proposed regulations in February 2022 to amend the national standards for licensing
of wholesale drug distributors by the states; establish new minimum standards for state licensing third-party logistics providers; and
create a federal system for licensure for use in the absence of a state program, each of which is mandated by the DSCSA. It is impossible
to predict whether further legislative or regulatory changes will be enacted, or FDA regulations, guidance or interpretations will be
changed or what the impact of such potential changes, if any, may be.

Regulatory
Exclusivity and Approval of Follow-on Products

Hatch-Waxman
Exclusivity

In
addition to enacting Section 505(b)(2) of the FDCA as part of the Hatch-Waxman Amendments to the FDCA, Congress also established an abbreviated
regulatory scheme authorizing the FDA to approve generic drugs that are shown to contain the same active ingredients as, and to be bioequivalent
to, drugs previously approved by the FDA pursuant to NDAs. To obtain approval of a generic drug, an applicant must submit an abbreviated
new drug application (“ANDA”) to the agency. An ANDA is a comprehensive submission that contains, among other things, data
and information pertaining to the active pharmaceutical ingredient, bioequivalence, drug product formulation, specifications and stability
of the generic drug, as well as analytical methods, manufacturing process validation data and quality control procedures. ANDAs are “abbreviated”
because they cannot include preclinical and clinical data to demonstrate safety and effectiveness. Instead, in support of such applications,
a generic manufacturer must rely on the preclinical and clinical testing previously conducted for a drug product previously approved
under an NDA, known as the reference listed drug (“RLD”).

In
order for an ANDA to be approved, the FDA must find that the generic version is identical to the RLD with respect to the active ingredients,
the route of administration, the dosage form, the strength of the drug and the conditions of use of the drug. At the same time, the FDA
must also determine that the generic drug is “bioequivalent” to the innovator drug. Under the statute, a generic drug is
bioequivalent to an RLD if “the rate and extent of absorption of the drug do not show a significant difference from the rate and
extent of absorption of the listed drug.” Unlike the 505(b)(2) NDA pathway that permits a follow-on applicant to conduct and submit
data from additional clinical trials or nonclinical studies in order to support the proposed change(s) to the reference product, the
ANDA regulatory pathway does not allow applicants to submit new clinical data other than bioavailability or bioequivalence data.

Upon
approval of an ANDA, the FDA indicates whether the generic product is “therapeutically equivalent” to the RLD in its publication
“Approved Drug Products with Therapeutic Equivalence Evaluations,” also referred to as the “Orange Book.” Physicians
and pharmacists consider a therapeutic equivalent generic drug to be fully substitutable for the RLD. In addition, by operation of certain
state laws and numerous health insurance programs, the FDA’s designation of therapeutic equivalence often results in substitution
of the generic drug without the knowledge or consent of either the prescribing physician or patient.

As
part of the NDA review and approval process, applicants are required to list with the FDA each patent that has claims that cover the
applicant’s product or method of therapeutic use. Upon approval of a new drug, each of the patents listed in the application for
the drug is then published in the Orange Book. Drugs listed in the Orange Book can, in turn, be cited by potential follow-on competitors
in support of approval of an ANDA or 505(b)(2) NDA.

17

When
an ANDA applicant submits its application to the FDA, it is required to certify to the FDA concerning any patents listed for the reference
product in the FDA’s Orange Book. Specifically, the applicant must certify that: (i) the required patent information has not been
filed; (ii) the listed patent has expired; (iii) the listed patent has not expired but will expire on a particular date and approval
is sought after patent expiration; or (iv) the listed patent is invalid or will not be infringed by the new product. Moreover, to the
extent that the Section 505(b)(2) NDA applicant is relying on studies conducted for an already approved product, the applicant also is
required to certify to the FDA concerning any patents listed for the NDA-approved product in the Orange Book to the same extent that
an ANDA applicant would.

If
the follow-on applicant does not challenge the innovator’s listed patents, the FDA will not approve the ANDA or 505(b)(2) application
until all the listed patents claiming the referenced product have expired. A certification that the new product will not infringe the
already approved product’s listed patents, or that such patents are invalid, is called a Paragraph IV certification. If the follow-on
applicant has provided a Paragraph IV certification to the FDA, the applicant must also send notice of the Paragraph IV certification
to the NDA and patent holders once the ANDA has been accepted for filing by the FDA. The NDA and patent holders may then initiate a patent
infringement lawsuit in response to the notice of the Paragraph IV certification. The filing of a patent infringement lawsuit within
45 days of the receipt of a Paragraph IV certification automatically prevents the FDA from approving the ANDA or 505(b)(2) NDA until
the earlier of 30 months, expiration of the patent, settlement of the lawsuit, or a decision in the infringement case that is favorable
to the ANDA or 505(b)(2) applicant.

An
ANDA or 505(b)(2) application also will not be approved until any applicable non-patent exclusivities listed in the Orange Book for the
referenced product have expired. The Hatch-Waxman Amendments to the FDCA provided a five-year period of non-patent data exclusivity within
the United States to the first applicant to gain approval of an NDA for a new chemical entity (“NCE”). For the purposes of
this provision, an NCE is a drug that contains no active moiety that has previously been approved by the FDA in any other NDA. An active
moiety is the molecule or ion responsible for the physiological or pharmacological action of the drug substance. In cases where such
NCE exclusivity has been granted, an ANDA or 505(b)(2) NDA may not be filed with the FDA until the expiration of five years unless the
submission is accompanied by a Paragraph IV certification, in which case the applicant may submit its application four years following
the original product approval.

The
FDCA also provides for a period of three years of data exclusivity if an NDA or NDA supplement includes reports of one or more new clinical
investigations, other than bioavailability or bioequivalence studies, that were conducted or sponsored by the applicant are deemed by
the FDA to be essential to the approval of the application. This three-year exclusivity period often protects changes to a previously
approved drug product, such as new indications, dosage forms, route of administration or combination of ingredients. Three-year exclusivity
would be available for a drug product that contains a previously approved active moiety, provided the statutory requirement for a new
clinical investigation is satisfied. Unlike five-year NCE exclusivity, an award of three-year exclusivity does not block the FDA from
accepting ANDAs or 505(b)(2) NDAs seeking approval for generic versions of the drug as of the date of approval of the original drug product;
rather, this three-year exclusivity covers only the conditions of use associated with the new clinical investigations and, as a general
matter, does not prohibit the FDA from approving follow-on applications for drugs containing the original active ingredient.

Five-year
and three-year exclusivity also will not delay the submission or approval of a traditional NDA filed under Section 505(b)(1) of the FDCA;
however, an applicant submitting a traditional NDA would be required to conduct or obtain a right of reference to all of the preclinical
studies and adequate and well-controlled clinical trials necessary to demonstrate safety and effectiveness.

Orphan
Drug Designation and Exclusivity

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 either (i) fewer than 200,000 individuals in the United States, or (ii) more than 200,000 individuals
in the United States and for which there is no reasonable expectation that the cost of developing and making available in the United
States a drug for this type of disease or condition will be recovered from sales in the United States for that drug. Legislative proposals
are currently being considered that would revise or revoke the second option available for a drug candidate to receive an orphan designation,
the so-called “cost recovery” pathway. Orphan drug designation must be requested before submitting an NDA. After the FDA
grants orphan drug designation, the identity of the therapeutic agent and its potential orphan use will be disclosed publicly by the
FDA; the posting will also indicate whether a drug is no longer designated as an orphan drug.

18

More
than one clinical asset may receive an orphan drug designation for the same indication, and the same clinical asset can be designated
for more than one qualified orphan indication. The benefits of orphan drug designation include research and development tax credits and
exemption from FDA prescription drug user fees. Orphan drug designation does not convey any advantage in or shorten the duration of the
regulatory review and approval process if or when an NDA for the drug candidate is filed.

If
a product that has orphan drug designation subsequently receives the first FDA approval for the indication for which it has such designation,
the product is entitled to orphan product exclusivity, which means that for seven years, the FDA may not approve any other marketing
applications for the same drug for the same indication, except under limited circumstances described further below. Orphan exclusivity
does not block the approval of a different drug for the same rare disease or condition, nor does it block the approval of the same drug
for different conditions. As a result, the FDA can still approve different drugs for use in treating the same indication or disease.
Additionally, if a drug designated as an orphan product receives marketing approval for an indication broader than what was designated,
it may not be entitled to orphan drug exclusivity.

Orphan
exclusivity will not bar approval of another product with the same drug for the same condition under certain circumstances, including
if a subsequent product with the same drug for the same condition is shown to be clinically superior to the approved product on the basis
of greater efficacy or safety or a major contribution to patient care, or if the company with orphan drug exclusivity cannot assure the
availability of sufficient quantities of the drug to meet the needs of persons with the disease or condition for which the drug was designated.
The FDA is now required to publish a summary of the clinical superiority findings when a drug is eligible for orphan product exclusivity
on the basis of a demonstration of clinical superiority.

Patent
Term Extension

A
patent claiming a prescription drug for which FDA approval is granted may be eligible for a limited patent term extension under the FDCA,
which permits a patent restoration of up to five years for patent term lost during product development and the FDA regulatory review
provided that certain statutory and regulatory requirements are met. The length of the patent term extension is related to the length
of time the drug is under regulatory review while the patent is in force. The restoration period granted on a patent covering a new FDA-regulated
medical product is typically one-half the time between the date a clinical investigation on human beings is begun and the submission
date of an application for premarket approval of the product, plus the time between the submission date of an application for approval
of the product and the ultimate approval date. Patent term restoration cannot be used to extend the remaining term of a patent past a
total of 14 years from the product’s approval date. Only one patent applicable to an approved drug product is eligible for the
extension, and the application for the extension must be submitted prior to the expiration of the patent in question. A patent that covers
multiple products for which approval is sought can only be extended in connection with one of the marketing approvals. The USPTO reviews
and approves the application for any patent term extension or restoration in consultation with the FDA.

Other
U.S. Healthcare Laws and Regulations

Manufacturing,
sales, promotion, and other activities following product approval may also be subject to regulation by other regulatory authorities in
the United States in addition to the FDA. Depending on the nature of the product, those authorities may include the Centers for Medicare
and Medicaid Services (“CMS”), other divisions of the Department of Health and Human Services (“HHS”), the Department
of Justice, the Drug Enforcement Administration, the Federal Trade Commission, the Occupational Safety and Health Administration, and
state and local governments.

For
example, in the United States, sales and marketing for prescription biopharmaceutical products must comply with state and federal fraud
and abuse laws. These laws include the federal Anti-Kickback Statute, which makes it illegal for any person, including a prescription
drug manufacturer (or a party acting on its behalf), to knowingly and willfully solicit, receive, offer or pay any remuneration that
is intended to induce or reward referrals, including the purchase, recommendation, order or prescription of a particular drug, for which
payment may be made under a federal healthcare program, such as Medicare or Medicaid. Violations of this law are punishable by up to
ten years in prison, criminal fines, administrative civil money penalties and exclusion from participation in federal healthcare programs.
In addition, the Patient Protection and Affordable Care Act, or ACA, among other things, amended the intent requirement of the federal
Anti-Kickback Statute and two of the five criminal healthcare fraud statutes created by the Health Insurance Portability and Accountability
Act of 1996, or HIPAA. A person or entity no longer needs to have actual knowledge of these two provisions in the statute or specific
intent to violate them; specifically with respect to the prohibition on executing or attempting to execute a scheme or artifice to defraud
or to fraudulently obtain money or property of any healthcare benefit program and the prohibition on disposing of assets to enable a
person to become eligible for Medicaid. Moreover, the government may now assert that a claim including items or services resulting from
a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act.

19

Pricing
and rebate programs must comply with the Medicaid rebate requirements of the U.S. Omnibus Budget Reconciliation Act of 1990 and more
recent requirements in the ACA. If products are made available to authorized users of the Federal Supply Schedule of the General Services
Administration, additional laws and requirements apply. There also are federal transparency requirements under the Physician Payments
Sunshine Act that require manufacturers of FDA-approved drugs, devices, biologics and medical supplies covered by Medicare or Medicaid
to report, on an annual basis, to CMS information related to payments and other transfers of value to physicians, teaching hospitals,
and certain advanced non-physician healthcare practitioners and physician ownership and investment interests. Prescription drug products
also must meet applicable child-resistant packaging requirements under the U.S. Poison Prevention Packaging Act.

Manufacturing,
sales, promotion, and other activities also are potentially subject to federal and state consumer protection and unfair competition laws.
Some state laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines,
or the relevant compliance guidance promulgated by the federal government, in addition to requiring drug manufacturers to report information
related to payments to physicians and other healthcare providers or marketing expenditures to the extent that those laws impose requirements
that are more stringent than the Physician Payments Sunshine Act. State and foreign laws also govern the privacy and security of health
information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus
complicating compliance efforts.

The
failure to comply with any of these laws or regulatory requirements subjects firms to possible legal or regulatory action. Depending
on the circumstances, failure to meet applicable regulatory requirements can result in criminal prosecution, fines or other penalties,
injunctions, requests for recall, seizure of products, total or partial suspension of production, denial or withdrawal of product approvals
or refusal to allow a firm to enter into supply contracts, including government contracts.

Government
Regulation Outside the U.S.

In
addition to regulations in the United States, we will be subject to a variety of foreign regulations that govern, among other things,
clinical trials and any commercial sales and distribution of our products, if approved, either directly or through distribution partners.
Whether or not we obtain FDA approval for a product candidate, we must obtain the requisite approvals from regulatory authorities in
foreign countries or economic areas, such as the European Union and the United Kingdom, among other foreign countries, before we may
commence clinical trials or market products in those countries or areas. The foreign regulatory approval process includes all of the
risks associated with the FDA approval described above, and the time required to obtain approval in other countries and jurisdictions
might differ from and be longer than that required to obtain FDA approval. Some foreign jurisdictions have a drug product approval process
similar to that in the U.S., which requires the submission of a clinical trial application much like the IND prior to the commencement
of clinical studies. In Europe, for example, a clinical trial application, or CTA, must be submitted to each country’s national
health authority and an independent ethics committee, much like the FDA and IRB, respectively. Once the CTA is approved in accordance
with a country’s requirements, clinical trial development may proceed. To obtain regulatory approval of a medicinal product candidate
under European Union regulatory systems, we would be required to submit a Marketing Authorisation Application, or MAA, which is similar
to the NDA, except that, among other things, there are country-specific document requirements. For countries outside of the European
Union, such as countries in Eastern Europe, Latin America or Asia, and recently the United Kingdom, the requirements governing the conduct
of clinical trials, product approval, pricing and reimbursement vary from country to country. Regulatory approval in one country or jurisdiction
does not ensure regulatory approval in another, but a failure or delay in obtaining regulatory approval in one country or jurisdiction
may negatively impact the regulatory process in others. Moreover, some nations may not accept clinical studies performed for U.S. approval
to support approval in their countries or require that additional studies be performed on natives of their countries. In addition, in
certain foreign markets, the pricing of drug products is subject to government control and reimbursement may in some cases be unavailable
or insufficient. If we fail to comply with applicable foreign regulatory requirements, we may be subject to, among other things, fines,
suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions, and criminal prosecution.

As
of January 31, 2020, the United Kingdom is no longer a member state of the European Union, and therefore a separate marketing authorization
application and approval will be required to market a medicinal product in the U.K. The Medicines and Healthcare products Regulatory
Agency, or the MHRA, is the U.K.’s standalone pharmaceutical regulator.

20

Clinical
Trials and Regulation of Medicinal Products in Europe

As
in the United States, medicinal products can be marketed in the European Union only if a marketing authorization from the competent regulatory
agencies has been obtained. Similar to the United States, the various phases of preclinical and clinical research in the European Union
are subject to significant regulatory controls.

Pursuant
to the European Clinical Trials Directive, a system for the approval of clinical trials in the European Union has been implemented through
national legislation of the member states. Under this system, an applicant must obtain approval from the competent national authority
of a European Union member state in which the clinical trial is to be conducted. Furthermore, the applicant may only start a clinical
trial after a competent ethics committee has issued a favorable opinion. Clinical trial applications must be accompanied by an investigational
medicinal product dossier with supporting information prescribed by the European Clinical Trials Directive and corresponding national
laws of the member states and further detailed in applicable guidance documents. In April 2014, the new Clinical Trials Regulation, (EU)
No 536/2014 (Clinical Trials Regulation) was adopted and became effective on January 31, 2022. The Clinical Trials Regulation is directly
applicable in all the European Union Member States, repealing the prior Clinical Trials Directive 2001/20/EC. The extent to which ongoing
clinical trials will be governed by the Clinical Trials Regulation will depend on the duration of the individual clinical trial; if a
clinical trial continues for more than three years from the day on which the Clinical Trials Regulation becomes applicable the Clinical
Trials Regulation will at that time begin to apply to the clinical trial.

The
new Clinical Trials Regulation aims to simplify and streamline the approval of clinical trials in the European Union. The main characteristics
of the regulation include: a streamlined application procedure via a single entry point; a single set of documents to be prepared and
submitted for the application as well as simplified reporting procedures for clinical trial sponsors; and a harmonized procedure for
the assessment of applications for clinical trials.

To
obtain marketing approval of a drug in the European Union, an applicant must submit a MAA either under a centralized or decentralized
procedure. The centralized procedure provides for the grant of a single marketing authorization by the European Commission that is valid
for all European Union member states, Iceland, Lichtenstein and Norway. The centralized procedure is compulsory for specific products,
including for medicines produced by certain biotechnological processes, products designated as orphan medicinal products, advanced therapy
products (such as gene-therapy, somatic cell-therapy or tissue-engineered medicines) and products with a new active substance indicated
for the treatment of certain disorders. For products with a new active substance indicated for the treatment of certain disorders and
products that are highly innovative or for which a centralized process is in the interest of patients, the centralized procedure may
be optional. Under the centralized procedure the maximum timeframe for the evaluation of an MAA by the European Medicines Agency (“EMA”)
is 210 days, excluding clock stops, when additional written or oral information is to be provided by the applicant in response to questions
asked by the Committee for Medicinal Products for Human Use (“CHMP”). Accelerated assessment might be granted by the CHMP
in exceptional cases, when a medicinal product is expected to be of a major public health interest, particularly from the point of view
of therapeutic innovation. The timeframe for the evaluation of an MAA under the accelerated assessment procedure is of 150 days, excluding
stop-clocks.

The
decentralized procedure is available to applicants who wish to market a product in specific European Union member states where such product
has not received marketing approval in any European Union member states before. The decentralized procedure provides for an applicant
to apply to one-member state to assess the application (the reference member state) and specifically list other member states in which
it wishes to obtain approval (concerned member states).

21

In
the European Union, only products for which marketing authorizations have been granted may be promoted. 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 or by the competent authority of the authorizing member state. 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 six 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 which is not followed by the actual placing of the drug on the European Union market (in case of centralized procedure)
or on the market of the authorizing member state within three years after authorization ceases to be valid (the so-called sunset clause).

Moreover,
even if authorized to be marketed in the European Union, prescription medicines may only be promoted to healthcare professionals, not
the general public. All promotion should be in accordance with the particulars listed in the summary of product characteristics. Promotional
materials must also comply with various laws, and codes of conduct developed by pharmaceutical industry bodies in the European Union
which govern (among other things) the training of sales staff, promotional claims and their justification, comparative advertising, misleading
advertising, endorsements, and (where permitted) advertising to the general public. Failure to comply with these requirements could lead
to the imposition of penalties by the competent authorities of the European Union member states. The penalties could include warnings,
orders to discontinue the promotion of the drug product, seizure of promotional materials, fines and possible imprisonment.

Regulation
of New Drugs in the United Kingdom

The
United Kingdom left the European Union on January 31, 2020 (commonly referred to as “Brexit”), with a transitional period
that expired on December 31, 2020. The United Kingdom and the European Union entered into a trade agreement known as the Trade and Cooperation
Agreement, which went into effect on January 1, 2021. We are currently evaluating the potential impacts on our business of the Trade
and Cooperation Agreement and guidance issued to date by the United Kingdom’s MHRA regarding the requirements for licensing and
marketing medicinal products in the United Kingdom.

Since
the regulatory framework for pharmaceutical products in the United Kingdom covering the quality, safety and efficacy of pharmaceutical
products, clinical trials, marketing authorization, commercial sales and distribution of medicinal products has only recently changed,
it is difficult to draw comparisons about the impact of the new regulatory regime and impact on the approval of product candidates in
the United Kingdom. In addition, even if a drug is licensed in the UK by the MHRA, it must further be approved by the National Institute
for Health & Care Excellence to ensure use within the UK’s National Health Service (NHS).

Pharmaceutical
Coverage, Pricing and Reimbursement, and Healthcare Reform

Sales
of our products, if approved for marketing, will depend, in part, on the availability and extent of coverage and reimbursement by third-party
payors, such as government health programs, including Medicare and Medicaid, commercial insurance and managed healthcare organizations.
These third-party payors are increasingly challenging the price and limiting the coverage and reimbursement amounts for medical products
and services. There may be significant delays in obtaining coverage and reimbursement for approved products, and coverage may be more
limited than the purposes for which the product is approved by the FDA or regulatory authorities in other countries. It is time-consuming
and expensive to seek reimbursement from third-party payors. Moreover, eligibility for reimbursement does not imply that any product
will be paid for in all cases or at a rate that covers our costs, including research, development, manufacture, sale and distribution.
Interim payments for new products, if applicable, may also not be sufficient to cover our costs and may not be made permanent. Payment
rates may vary according to the use of the product and the clinical setting in which it is used, may be based on payments allowed for
lower-cost products that are already reimbursed and may be incorporated into existing payments for other services. Net prices for products
may be reduced by mandatory discounts or rebates required by third-party payors and by any future relaxation of laws that presently restrict
imports of products from countries where they may be sold at lower prices than in the United States. In the United States, third-party
payors often rely upon Medicare coverage policy and payment limitations in setting their own reimbursement policies, but they also have
their own methods and approval process apart from Medicare coverage and reimbursement determinations. Accordingly, one third-party payor’s
determination to provide coverage for a product does not assure that other payors will also provide coverage for the product.

22

In
addition, the containment of healthcare costs has become a priority for federal and state governments, and the prices of drugs have been
a focus in this effort. The U.S. government, state legislatures and foreign governments have shown significant interest in implementing
cost-containment programs, including price controls, restrictions on coverage and reimbursement, and requirements for substitution of
generic products. Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions
with existing controls and measures, could further limit our net revenue and results. Decreases in third-party reimbursement for our
clinical assets or a decision by a third-party payor to not cover our clinical assets could reduce physician usage of the clinical asset
and have a material adverse effect on our sales, results of operations and financial condition. Moreover, there has been heightened governmental
scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several Congressional inquiries
and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review
the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drug
products. Individual states in the United States have also increasingly passed legislation and implemented regulations designed to control
pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access
and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and
bulk purchasing. In December 2020, the U.S. Supreme Court held unanimously that federal law does not preempt the states’ ability
to regulate pharmaceutical benefit managers (“PBMs”) and other members of the healthcare and pharmaceutical supply chain,
an important decision that has led to further and more aggressive efforts by states in this area.

On
August 16, 2022, President Biden signed into the law the Inflation Reduction Act of 2022, or the IRA. Among other things, the IRA has
multiple provisions that can impact the prices of drug products that are both sold into the Medicare program and throughout the United
States. Beginning in 2023, a manufacturer of drugs covered by Medicare Parts B or D must pay a rebate to the federal government if their
drug product’s price increases faster than the rate of inflation. This calculation is made on a drug product by drug product basis
and the amount of the rebate owed to the federal government is directly dependent on the volume of a drug product that is paid for by
Medicare Parts B or D. Additionally, starting for payment year 2026, CMS will negotiate drug prices annually for a select number of single
source Part D drugs without generic or biosimilar competition. CMS will also negotiate drug prices for a select number of Part B drugs
starting for payment year 2028. If a drug product is selected by CMS for negotiation, it is expected that the revenue generated from
such drug will decrease.

In
addition, in some foreign countries, the proposed pricing for a drug must be approved before it may be lawfully marketed. The requirements
governing drug pricing vary widely from country to country. For example, in the European Union, the sole legal instrument at the European
Union level governing the pricing and reimbursement of medicinal products is Council Directive 89/105/EEC (the “Price Transparency
Directive”). The aim of the Price Transparency Directive is to ensure that pricing and reimbursement mechanisms established in
the European Union Member States are transparent and objective, do not hinder the free movement of and trade in medicinal products in
the European Union, and do not hinder, prevent or distort competition on the market. The Price Transparency Directive does not provide
any guidance concerning the specific criteria on the basis of which pricing and reimbursement decisions are to be made in the individual
European Union Member States, nor does it have any direct consequence for pricing or reimbursement levels in the individual European
Union Member States. The European Union 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 levels of medicinal products for human use. A
European Union Member State may approve a specific price or level of reimbursement for the medicinal product or alternatively adopt
a system of direct or indirect controls on the profitability of the company responsible for placing the medicinal product on the market,
including volume-based arrangements, caps and reference pricing mechanisms.

Health
Technology Assessment (“HTA”) of medicinal products is becoming an increasingly common part of the pricing and reimbursement
procedures in some European Union Member States, including France, Germany, Ireland, Italy and Sweden. The HTA process in the European
Union Member States is governed by the national laws of these countries. HTA is the procedure according to which the assessment of the
public health impact, therapeutic impact, and the economic and societal impact of the use of a given medicinal product in the national
healthcare systems of the individual country is conducted. HTA generally focuses on the clinical efficacy and effectiveness, safety,
cost, and cost-effectiveness of individual medicinal products as well as their potential implications for the healthcare system. Those
elements of medicinal products are compared with other treatment options available on the market. The outcome of HTA regarding specific
medicinal products will often influence the pricing and reimbursement status granted to these medicinal products by the competent authorities
of individual European Union Member States. The extent to which pricing and reimbursement decisions are influenced by the HTA of the
specific medicinal product vary between the European Union Member States. For example, European Union Member States that have not yet
developed HTA mechanisms could rely to some extent on the HTA performed in countries with a developed HTA framework when adopting decisions
concerning the pricing and reimbursement of a specific medicinal product.

Separately
from cost containment efforts, in the United States and some foreign jurisdictions, there also have been, and continue to be, several
legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval
of product candidates or restrict or regulate post-approval activities. The FDA’s and other regulatory authorities’ policies
may change, and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our current
or future product candidates.

23

Data
Privacy and the Protection of Personal Information

We
are subject to laws and regulations governing data privacy and the protection of personal information including health information. The
legislative and regulatory landscape for privacy and data protection continues to evolve, and there has been an increasing focus on privacy
and data protection issues which will continue to affect our business. In the United States, we may be subject to state security breach
notification laws, state laws protecting the privacy of health and personal information and federal and state consumer protections laws
that regulate the collection, use, disclosure and transmission of personal information. These laws overlap and often conflict and each
of these laws is subject to varying interpretations by courts and government agencies, creating complex compliance issues. If we fail
to comply with applicable laws and regulations we could be subject to penalties or sanctions, including criminal penalties. Our customers
and research partners must comply with laws governing the privacy and security of health information, including HIPAA and state health
information privacy laws. If we knowingly obtain health information that is protected under HIPAA, called “protected health information,”
our customers or research collaborators may be subject to enforcement, and we may have direct liability for the unlawful receipt of protected
health information or for aiding and abetting a HIPAA violation.

State
laws protecting health and personal information are becoming increasingly stringent. For example, California has implemented the California
Confidentiality of Medical Information Act that imposes restrictive requirements regulating the use and disclosure of health information
and other personally identifiable information, and California has recently adopted the California Consumer Privacy Act of 2018 (“CCPA”).
The CCPA mirrors a number of the key provisions of the EU General Data Protection Regulation (“GDPR”) described below. The
CCPA establishes a new privacy framework for covered businesses by creating an expanded definition of personal information, establishing
new data privacy rights for consumers in the State of California, imposing special rules on the collection of consumer data from minors,
and creating a new and potentially severe statutory damages framework for violations of the CCPA and for businesses that fail to implement
reasonable security procedures and practices to prevent data breaches. Since passage of the CCPA, several other states (Connecticut,
Colorado, Virginia, and Utah) have also enacted comprehensive consumer privacy laws that include key differences from California’s
law, further complicating compliance by industry and other stakeholders. Other states in the U.S. are considering privacy laws similar
to the CCPA.

In
Europe, the GDPR went into effect in May 2018, implementing a broad data protection framework that expanded the scope of European Union
data protection law, including to non- European Union entities that process, or control the processing of, personal data relating to
individuals located in the European Union, including clinical trial data. The GDPR sets out a number of requirements that must be complied
with when handling the personal data of European Union-based data subjects including: providing expanded disclosures about how their
personal data will be used; higher standards for organizations to demonstrate that they have obtained valid consent or have another legal
basis in place to justify their data processing activities; the obligation to appoint data protection officers in certain circumstances;
new rights for individuals to be “forgotten” and rights to data portability, as well as enhanced current rights (e.g. access
requests); the principal of accountability and demonstrating compliance through policies, procedures, training and audit; and a new mandatory
data breach regime. In particular, medical or health data, genetic data and biometric data where the latter is used to uniquely identify
an individual are all classified as “special category” data under the GDPR and afforded greater protection and require additional
compliance obligations. Further, European Union member states have a broad right to impose additional conditions – including restrictions
– on these data categories. This is because the GDPR allows European Union member states to derogate from the requirements of the
GDPR mainly in regard to specific processing situations (including special category data and processing for scientific or statistical
purposes). As the European Union states continue to reframe their national legislation to harmonize with the GDPR, we will need to monitor
compliance with all relevant European Union member states’ laws and regulations, including where permitted derogations from the
GDPR are introduced. We will also be subject to evolving European Union laws on data export, if we transfer data outside the European
Union to ourselves or third parties outside of the European Union.

The
EU GDPR is an EU Regulation and it no longer applies to the UK. If you operate inside the UK, you need to comply with the Data Protection
Act 2018 (DPA 2018). The provisions of the EU GDPR have been incorporated directly into UK law as the UK GDPR. On 28 June 2021, the EU
approved adequacy decisions for the EU GDPR and the Law Enforcement Directive (LED). This means data can continue to flow freely from
the EU to the UK, in the majority of cases.

The
Cayman Islands Government enacted the Data Protection Act on May 18, 2017 (as amended, the “DPA”). The DPA regulates the
processing of personal data in the Cayman Islands. Under the DPA, the Company is a “data controller” and the Company’s
affiliates and/or its delegates may be “data processors” (or, in some circumstances, data controllers in their own right),
in respect of such personal data.

24

U.S.
Foreign Corrupt Practices Act and Anti-bribery Regulations

In
general, the Foreign Corrupt Practices Act of 1977, as amended, or the FCPA, prohibits offering to pay, paying, promising to pay, or
authorizing the payment of money or anything of value to a foreign official in order to influence any act or decision of the foreign
official in his or her official capacity or to secure any other improper advantage in order to obtain or retain business for or with,
or in order to direct business to, any person. The prohibitions apply not only to payments made to “any foreign official,”
but also to those made to “any foreign political party or official thereof,” to “any candidate for foreign political
office” or to any person, while knowing that all or a portion of the payment will be offered, given, or promised to anyone in any
of the foregoing categories. “Foreign officials” under the FCPA include officers or employees of a department, agency, or
instrumentality of a foreign government. The term “instrumentality” is broad and can include state-owned or state-controlled
entities. Importantly, United States authorities deem most healthcare professionals and other employees of foreign hospitals, clinics,
research facilities and medical schools in countries with public healthcare and/or public education systems to be “foreign officials”
under the FCPA. When we interact with foreign healthcare professionals and researchers in testing and marketing our products abroad,
should any of our product candidates receive foreign regulatory approval in the future, we must have policies and procedures in place
sufficient to prevent us and agents acting on our behalf from providing any bribe, gift or gratuity, including excessive or lavish meals,
travel or entertainment in connection with marketing our products and services or securing required permits and approvals. The FCPA also
obligates companies whose securities are listed in the United States to comply with accounting provisions requiring us to maintain books
and records that accurately and fairly reflect all transactions of the corporation, including international subsidiaries, and to devise
and maintain an adequate system of internal accounting controls for international operations.

We
are also subject to U.K. Bribery Act of 2010, which prohibits both domestic and international bribery, as well as bribery across both
private and public sectors. In addition, an organization that “fails to prevent bribery” committed by anyone associated with
the organization can be charged under the U.K. Bribery Act unless the organization can establish the defense of having implemented “adequate
procedures” to prevent bribery. As we expand our operations, we are likely to be subject to additional laws and restrictions relating
to anti-bribery.

Environmental,
Health, and Safety Regulation

We
are subject to numerous federal, state, and local environmental, health, and safety (“EHS”) laws and regulations relating
to, among other matters, safe working conditions, product stewardship, environmental protection, and handling or disposition of products,
including those governing the generation, storage, handling, use, transportation, release, and disposal of hazardous or potentially hazardous
materials, medical waste, and infectious materials that may be handled by our partner research laboratories. Some of these laws and regulations
also require us to obtain licenses or permits to conduct our operations. If we fail to comply with such laws or obtain and comply with
the applicable permits, we could face substantial fines or possible revocation of our permits or limitations on our ability to conduct
our operations. Certain of our development and manufacturing activities may involve, from time to time, use of hazardous materials, and
we believe we are in compliance with the applicable environmental laws, regulations, permits, and licenses. However, we cannot ensure
that EHS liabilities will not develop in the future. EHS laws and regulations are complex, change frequently and have tended to become
more stringent over time. Although the costs to comply with applicable laws and regulations have not been material, we cannot predict
the impact on our business of new or amended laws or regulations or any changes in the way existing and future laws and regulations are
interpreted or enforced, nor can we ensure we will be able to obtain or maintain any required licenses or permits.

25

Employees

As
of December 31, 2025, we had a total of four full-time employees.

We
currently rely on several consultants who provide services to our Company. None of our employees are represented by a labor union or
covered by collective bargaining agreements. We consider our relationship with our employees to be good. We anticipate that the number
of employees will increase as we continue to develop the assets in our pipeline and other clinical assets that we seek to develop. Additionally,
we utilize and expect to continue to utilize clinical research organizations and third parties to perform our pre-clinical studies, clinical
studies, and manufacturing.

Corporate
Information

We
were incorporated under the name “Murphy Canyon Acquisition Corp.” in October 2021 under the laws of the State of Delaware
for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business
combination with one or more businesses. We changed our name to “Conduit Pharmaceuticals Inc.” in connection with the completion
of the Business Combination in September 2023. Effective August 5, 2025, the Company changed its name from Conduit Pharmaceuticals Inc.
to CDT Equity Inc. Our change to CDT Equity Inc. reflects the evolution of our strategy as a data-driven biotech development company
focused on identifying, enhancing, and advancing high-potential therapeutic assets through scientific innovation and strategic partnerships.

Our
principal executive offices are located at 4581 Tamiami Trail North, Suite 200 Naples, Florida. Our telephone number is +1 (646)-491-9132,
and our website can be found at https://www.cdtequity.com.