NASDAQ: ENSCW

Business
Overview

We
are a clinical stage pharmaceutical company seeking to develop innovative solutions for severe pain relief while reducing the potential
for opioid misuse, abuse, and overdose.

We
are currently developing product candidates designed to improve the safety of prescription drugs. Our primary focus has been on opioid
pain products and opioid use disorder products. Prescription opioid abuse presents major burdens to society, resulting in significant
costs, illnesses, and deaths, many of which we believe could be prevented through the use of our proprietary technologies. We believe
the intertwined issues of (1) the widespread abuse of prescription opioids and (2) the resultant reluctance of many prescribers to write
prescriptions for opioid analgesics have resulted in the persistent under-treatment of patients with moderate-to-severe pain. Our platforms
utilize a novel molecular delivery technology designed to deter prescription opioid abuse at the molecular level.

Our
current development pipeline includes two new drug platforms - an abuse-resistant opioid prodrug technology – the Trypsin
Activated Abuse Protection, or the TAAP platform, and an overdose protection opioid prodrug technology - the Multi-Pill Abuse Resistant,
or the MPAR® platform. The TAAP platform is designed to seek to improve the care of patients with severe pain while reducing the
human and economic costs associated with prescription opioid drug abuse. The MPAR® platform when combined with our TAAP prodrugs
is designed not only to seek to prevent abuse of prescription drugs but also to reduce overdose occurrences. Each prodrug is intended
to be able to be combined with our MPAR® technology for overdose protection.

The
technology under the TAAP platform when applied to opioid drugs is designed to release clinically effective opioid drugs only when exposed
to specific physiological conditions (i.e., when the drug is ingested and exposed to the digestive enzyme trypsin). Our lead product
candidate, PF614, is a TAAP oxycodone prodrug that is a biologically inactive compound which can be metabolized in the body to produce
a drug with demonstrable features aimed at resisting both oral and non-oral modes of prescription drug abuse. This approach differs from
current formulation-based strategies such as OxyContin OP which uses Intac® Technology (crush-resistant polymers) and Extampza®ER
which uses DETERx™ (insoluble fatty acid salts in polymers), in a number of ways. First, the TAAP technology seeks to remove the
ability of a user to abuse PF614 intravenously or intranasally based on preclinical studies that show PF614 does not readily convert
into oxycodone in the blood stream and trypsin is not present in the nasal passage, and, accordingly, PF614 would not convert to oxycodone
in the nose. Furthermore, the chemically modified and abuse-resistance TAAP opioid drug is unaffected by simple physical manipulations
designed to extract abusable amounts of opioid, such as through kitchen chemistry. Our portfolio of TAAP product candidates is based
on a differentiated understanding of chemical reactivity and metabolism, as well as the key pillars of our unique approach which focuses
on: (1) enzyme mediated metabolic activation localized in the gastrointestinal track; (2) rearrangement chemistry to achieve pharmacokinetic
release of active drug products; and (3) preclinical and clinical data that set forth the metabolic and chemical activation profile for
each of our clinical candidates.

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Utilizing
this approach, we filed an Investigational New Drug application, or IND (116794), and commenced a Phase 1 clinical trial for PF614, which
was completed in February 2018. The clinical data from the Phase 1 trial demonstrated that oxycodone released from PF614 as chemically-designed,
and that it was absorbed following oral administration of the TAAP PF614, resulting in blood levels that matched the same release profile
as the extended release oxycodone product, OxyContin OP. A second multi-ascending dose study with a bioequivalent arm was completed in
July 2022 and a nasal human abuse potential (HAP) study was completed in October 2022. A second oral HAP study was completed in March
2023. A study to evaluate efficacy was completed in December 2023.

The
MPAR® technology is designed to limit the bioavailability of active opioid following co-ingestion of multiple doses, whether
inadvertent or intentional, through a combination of a TAAP prodrug with nafamostat. Nafamostat is a small molecule that clinical studies
have shown to have a steep dose response curve and to be a highly potent trypsin inhibitor. When combined with our TAAP prodrugs, our
MPAR® technology is designed not to affect metabolism and the release of the active pharmaceutical ingredient. However,
if the MPAR® combination product is taken in larger quantities than intended, the excess nafamostat is designed to inhibit
trypsin, thereby preventing metabolic activation and averting a drug overdose. We believe the potential benefits to society of an opioid
that resists both oral and parenteral abuse are considerable. A Phase 1 study to explore the combination of PF614 and nafamostat, PF614-MPAR-101
was initiated in December of 2021, and early data from the study reported in May 2022 demonstrated the combination product showed overdose
protection, with a reduction in the release of oxycodone over that of PF614 delivered alone. A second part of this trial to confirm overdose
protection from PF614-MPAR 25 mg was completed in 2023 and data reported in May 2023. PF614-MPAR was granted Breakthrough Therapy designation
by the FDA in January 2024. A second study, PF614-MPAR-102, designed to evaluate the overdose protection across a range of dosages, initiated
enrollment of subjects in December 2024 and is continuing enrollment.

Our
pipeline has been developed over the course of more than twenty years of research and investment and includes three clinical-stage product
candidates. While our principal focus and lead product candidates are geared towards combating abuse and overdose of opioid drugs, we
have, over the years of research and development, discovered and recognized qualities and unique features of certain product candidates
that may be useful in addressing other treatments.

PF614

PF614
is our lead TAAP prodrug candidate under development for the treatment of acute or chronic pain. PF614 is a delayed release TAAP prodrug
designed to release oxycodone under certain specific physiological circumstances when taken orally. PF164 was evaluated for safety and
pharmacokinetic release of oxycodone in a Phase 1 single ascending dose clinical trial in 64 healthy subjects. The trial showed that
PF614 was well tolerated with no serious adverse events. The study also showed pharmacokinetics had a maximum blood concentration of
oxycodone at 4 to 6 hours after swallowing PF614, demonstrating its delayed release profile. A second Phase 1b multi-ascending dose study
(MAD) was initiated in 2021 to evaluate PF614 delivered to healthy subjects twice daily for 4.5 days. This study evaluated both safety
and PK, with a second part to evaluate the bioequivalence (BE) of PF614 versus OxyContin. Final data from this trial was reported in
July 2022. The MAD study demonstrated both the safety of PF614 showing it was well tolerated at doses up to 200 mg, which was comparable
to 80 mg of OxyContin both delivered twice daily. The BE study arm followed the successful completion of the multi-ascending twice-daily
dosing study of PF614 and compared the release of oxycodone from PF614 versus OxyContin® administered to subjects in both fasted
and fed states. It was concluded that 100 mg PF614 was bioequivalent to 40 mg OxyContin under both fasted and fed conditions. This data
is critical to understand future prescribing criteria for PF614 as an agent bioequivalent to OxyContin and therefore may be developed
through the 505(b)(2) regulatory path as defined by the FDA. The intranasal (IN) and oral human abuse potential of PF614 was assessed
in two different studies. In study 1, PF614-103, we evaluated the abuse potential of PF614 100 mg relative to crushed oxycodone immediate-release
(IR) tablets 40 mg (equivalent opioid doses) and placebo following intranasal administration. In study 2, PF614-104, we evaluated the
oral abuse potential of intact PF614 at 3 different dose levels 50, 100 and 200 mg to IR oxycodone 40 mg and placebo. The purpose of
this study is to assess the PK and human oral abuse potential of PF614. An efficacy study, PF614-201 was conducted to evaluate 50 and
100 mg PF614 in 16 healthy male subjects for the time of onset of pain relief and the ability of PF614 to relieve pain. The data was
used to design our Phase 3 clinical trial.

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We
initiated our pivotal Phase 3 trial, PF614-301, examining the efficacy of PF614 in post-operative acute pain following abdominoplasty
in July 2025 and enrollment began in December 2025. We believe PF614 has the potential to provide a safer alternative to the abuse deterrent
formulated opioid products that are currently commercially available.

PF614-MPAR

PF614-MPAR,
a combination product of PF614 and nafamostat has been designed to limit abuse potential by providing resistance to use through injection
or inhalation and to provide overdose protection against excessive oral ingestion. Our IND application (150966) for PF614-MPAR received
FDA allowance on April 27, 2021 following the release of a Full Clinical Hold from January 8, 2021. We addressed deficiencies from the
initial IND submission, amended the protocol and submitted a response to the clinical hold letter on March 29, 2021. We initiated a Phase
1 clinical trial, PF614-MPAR-101, to evaluate safety and PK in healthy subjects in December 2021. Initial data from this trial was reported
in May of 2022. The PF614-MPAR-101 overdose protection study examined PF614 administered orally alone or in combination with the trypsin
inhibitor nafamostat (MPAR®) to healthy volunteers. The initial data demonstrated the overdose protection of our MPAR®
combination product, with reduced release of oxycodone from PF614 in a simulated overdose situation. It also demonstrated the PF614
in the systemic circulation (simulated injection) did not convert to oxycodone. We completed the clinical portion and reported data from
Part A of this study in December 2022. Part B of the study to test the overdose protection of the selected PF614-MPAR 25 mg formulation
by administering an escalating number of dose units to a group of healthy subjects completed enrollment in March 2023. The PK data from
Part B successfully showed that PF614-MPAR® 25 mg administered at a prescribed dose of one or two dose units (capsules)
provided oxycodone in an equivalent manner to PF614 without MPAR®. However, the simultaneous administration of 3 dose
units or greater of PF614-MPAR 25 mg, resulted in reduced oxycodone in the circulation, as compared to the unprotected PF614. There was
a highly significant difference between the oxycodone blood levels following delivery of PF614 200 mg versus 8 dose units of PF614-MPAR
25 mg (200 mg PF614 total) demonstrating the overdose protection produced by the MPAR® technology. This was reported in
May of 2023. PF614-MPAR was granted Breakthrough Therapy designation by the FDA in January 2024.

A
second three-part trial, PF614-MPAR-102, began in December 2024 to examine a 100 mg dose of PF614-MPAR. Parts 1 and 2 of the trial have
been completed and Part 3 is currently ongoing. MPAR is being tested clinically in partnership with Quotient Sciences, using its integrated
Translational Pharmaceutics® platform to search for a PF614-MPAR formulation that allows conversion into oxycodone within the prescribed
dose range but reduces conversion to oxycodone at higher than prescribed dose levels in an overdose scenario.

Market
Opportunity

Drug
Abuse and Drug Overdose

Opioid
pain medications are essential for improving the care and outcomes of a majority of Americans who live with chronic pain. In 2023, 34.9%
of adults had chronic pain, with 8.5% of those having high impact chronic pain. Millions of adults suffered from pain every day for the
preceding three months and almost 40 million adults experience severe levels of pain, which is linked to worse health status. High impact
chronic pain is characterized by extended periods of suffering which impair life quality to a severe degree. Prescription opioids drugs,
such as morphine, hydromorphone, hydrocodone, and oxycodone, have a long history of use for the management of severe and chronic pain.
Prescriptions for opioid medications in 2023 totaled almost 140 million, with $3.8 billion in market size in the United States.

The
CDC recently provided recommendations for clinicians who provide pain care, defining acute pain (duration less than 1 month), subacute
pain (duration of 1–3 months), or chronic pain (duration of 3 months or more), not including sickle cell disease related pain management,
cancer pain treatment, palliative care, and end-of life care. These guidelines are based on the indications, acute and chronic
pain, that we intend to explore for our TAAP and MPAR® opioid products including PF614.

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Opioids
are offered in a variety of dosages including immediate-release tablets (or capsules), extended-release tablets (or capsules), patches,
and other dose forms. Oxycodone is one of the most effective pain killers available today. This drug helps the patient to overcome pain
and focus on his or her work. Opioids have a risk of dependence and, when used improperly, a common side effect of high doses of opioids
like oxycodone can be euphoria, or a “high.” As a result of these side effects, opioids have become amongst the most misused
or abused prescription drugs in the United States. Opioid abuse was declared a public-health emergency in 2017 when more than 91 people
died each day from opioid-related overdoses. In 2021, the total number of opioid-related deaths rose to 109,600, whereas in 2022 that
number declined to 81,806. CDC data projects that almost 80,000 people die every year from opioid overdose, of which prescription opioids
factor into 12.4% of these deaths (https://drugabusestatistics.org/opioid-epidemic/).

The
large increase in overall overdose deaths is now driven by use of synthetic opioids, in particular fentanyl, as prescription opioids
have become harder to obtain. Prescription opioid-involved death rates from 2019 to 2022 were relatively flat at 14,319 to 14,716, respectively,
showing that attention to the problem had yielded a beneficial effect. However, 6.1 million Americans over the age of 12 were reported
to be suffering from opioid use disorder (“OUD”) in 2024. Based on information from the CDC, the most common drugs
involved in prescription opioid overdose deaths include Methadone, Oxycodone (such as OxyContin®), and Hydrocodone (such as Vicodin®).
The CDC indicates that improving opioid prescribing, treatment of opioid use disorder, and prevention of opioid use disorder would help
to improve the opioid crisis. Misuse or abuse of opioids is often done in one of the following manners:

●
Oral Excessive Tablet
Abuse. Generally recognized as the most prevalent route of administration by abusers, an abuser orally ingests more tablets (or
capsules) than is recommended for pain relief.

●
Nasal snorting.
Crushed tablets are insufflated for absorption of the drug through the nasal tissues.

●
Injection. The opioid
is physically or chemically removed from the dosage and injected into the vein using a syringe.

●
Oral Manipulated Tablet
Abuse. Extended-release tablets or patches are crushed, chewed, or otherwise physically or chemically manipulated to defeat an
extended-release mechanism and provide an immediate-release of the opioid for oral ingestion.

●
Poly-pharmacy. Opioids
are sometimes used in conjunction with alcohol, methamphetamine, benzodiazepines or other drugs to enhance the euphoria.

●
Overdose. Users
may accidentally introduce excessive quantities of drugs in their systems or combine drugs that may heighten the chance of adverse
effects of drugs. Some patients may over-ingest drugs accidentally or with the express intent of suicide.

●
Chronic or prolonged
use. Chronic or prolonged use of opioids resulting in dependence is another form of misuse or abuse.

Amphetamines
like Adderall are manufactured in pill form and are intended for oral ingestion. As of late 2022, seventy-five percent of Adderall prescriptions
are prescribed to the 10.5 million adults, age 22 or older, that are diagnosed with attention deficit hyperactivity disorder, or ADHD.
The number of prescriptions have fallen in 2023 and 2024 due to shortages of the medication. ADHD is the most common neurodevelopment
disorder in children. Five million adults misuse stimulant medication annually, by using alternative consumption methods to achieve a
more intense high faster; snorting or injecting are most-common methods of abuse. Both of these methods involve crushing pills.

We
believe that having prescription drug products available that have a reduced potential for abuse by crushing and injecting, snorting,
and chewing could provide an even greater reduction of prescription opioid related deaths in the abuse of opioids or amphetamines.

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Our
Technology Platform Solution

TAAP
Prescription Drugs

The
technology under the TAAP platform utilizes a novel technology designed to deter prescription drug abuse at the molecular level. The
molecular delivery system is designed to release clinically effective drugs only when exposed to specific physiological conditions (i.e.,
when the drug is ingested and exposed to the digestive enzyme trypsin). Our TAAP prodrugs delivery system demonstrates a number
of features aimed at resisting both oral and non-oral modes of abuse. This platform’s approach differs from current formulation-based
strategies (abuse deterrent formulations, or ADFs) in a number of ways. First, the abuse-resistance provided by TAAP is designed to be
unaffected by simple physical manipulations (e.g., crushing and extraction and/or chewing of the dose form provided to patients). We
believe the potential benefits to society of applying TAAP to opioids and amphetamines providing medication that resists both oral and
parenteral abuse are considerable.

MPAR®
Prescription Drugs

MPAR®
combination therapy, involves co-formulating TAAP prodrugs with a trypsin inhibitor, nafamostat, which, when administered at prescribed
dose levels, are intended to have no effect on the conversion of the prodrug to the active ingredient thus allowing normal drug plasma
exposure levels. However, if the drug were taken in greater than prescribed quantities, the trypsin inhibitor would also be present at
higher levels, inhibiting the first step in the activation process, preventing the conversion of the prodrug to the active ingredient
thus limiting the potential to an overdose from the medication.

Our
Development Programs

We
are currently developing product candidates designed to improve the safety and performance of prescription drugs. Our primary focus has
been on opioid pain products and opioid use disorder products. Each prodrug is intended to be able to be combined with our MPAR®
technology for overdose protection. Additionally, nafamostat, which is an ingredient in our overdose protection combination products,
may be developed for infection and pulmonary lung diseases. Besides our clinical candidates, we have a product portfolio of other TAAP
and MPAR® opioids and amphetamines that could potentially be developed to build on this pipeline.

Clinical
agents

PF614

PF614
is a chemically modified, extended-release oxycodone-derivative which releases clinically effective oxycodone only when exposed trypsin
in the gut (i.e., when the drug is ingested). This approach differs from formulation-based strategies which are currently commercially
available, in a number of ways. First, the abuse-resistance provided by PF614 is retained even when dissolved in water and is designed
to be unaffected by simple physical manipulations (e.g., extraction, chewing, and/or crushing). It also limits the bioavailability of
active medication following co-ingestion of multiple doses.

Following
ingestion, the release of oxycodone from PF614 proceeds via a two-step process comprised of (1) trypsin activation in the small intestine
and (2) a subsequent intramolecular cyclization release reaction. This reaction releases oxycodone with concomitant formation of a cyclic
urea metabolite. The time-course of oxycodone release from PF614 is a function of the kinetics of (i) the trypsin hydrolysis and (ii)
the cyclization-release reaction. In the Phase 1 study of PF614, the time to maximal blood concentration of oxycodone (Tmax)
was five to six hours for the release of oxycodone and this time cannot be modified by crushing, chewing, or physically manipulating
the drug product. Oxycodone safety, metabolism, and pharmacokinetics have been well studied.

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PF614-101
Phase 1 Clinical Trial

PF614
(IND 116796) has been evaluated in a Phase 1 clinical study for safety and pharmacokinetics of oxycodone release in 64 healthy subjects
in seven different closing cohorts from November 2016 to January 2018. This study was conducted for us by PRA Health Sciences –
Early Development Services Lenexa, Kansas, principal investigator, Daniel Dickerson, M.D., Ph.D. to evaluate the safety and pharmacokinetics
of PF614, as well as the pharmacokinetics of oxycodone at doses sufficient to characterize the extent to which plasma oxycodone is produced
and maintained following oral ingestion of PF614 and was compared to the oxycodone released from extended release oxycodone from OxyContin
OP. Subjects were randomized to receive a single dose of PF614 (dose of 15, 25, 50, 100, and 200 mg with 6 subjects per dosing group)
or OxyContin OP (dose of 10, 20, 50, and 80 mg with 2 subjects per dosing group). New subjects were recruited for each cohort. Cohort
1 compared subjects receiving PF614 and OxyContin OP with and without naltrexone blockade. Naltrexone is an opioid blocker to prevent
opioids from attaching to the opioid receptors, preventing the effect of the opioid medication such as pain relief, feeling of euphoria
or respiratory depression. The single ascending dose study also compared the release of oxycodone from PF614 under both fasted and fed
conditions at the highest dose of PF614 evaluated, 200 mg. The pharmacokinetics of the prodrug fragments was also evaluated. In addition,
this study instructed as to the “conversion efficiency” of the PF614 prodrug to oxycodone, with respect to OxyContin.

Pharmacokinetic
Analyses

The
shape of the plasma concentration versus time curve of oxycodone was similar following administration of OxyContin OP (oxycodone extended
release) and PF614. The efficiency of conversion for PF614 to oxycodone was determined to be approximately 86%. A PF614 dose of 50 mg
yields oxycodone exposure comparable to a 20.01 mg dose of OxyContin, indicating a potency ratio of 0.40. This data has allowed us to
match doses of PF614 to those of commercially available OxyContin OP.

Safety

A
total of 64 subjects were included in this study, of which 23 (35.9%) experienced 47 treatment-emergent adverse events, or TEAEs. The
majority of TEAEs were either gastrointestinal disorders or nervous system disorders with no deaths, serious adverse events, or severe
TEAEs. Additionally, there were no discontinuations due to study drug-related adverse events. Over half of TEAEs were study drug related,
but they were mostly mild in severity. The three TEAEs that were moderate in severity were nephrolithiasis, or kidney stones, nausea,
and vomiting, with the nausea and vomiting being study drug related. Comparing safety data across cohorts, the data indicated that dose,
naltrexone, and fed/fasted state had no clinically relevant effect on the safety profile of PF614. PF614 was generally well tolerated
at doses up to 200 mg in healthy subjects.

PF614-102
Phase 1b Clinical Trial

A
Phase 1b study was conducted by ICON (formerly PRA Health Sciences) with Dr. M Johnston as Principal investigator. This was a 2-part
study comprised of a MAD study (Part A) and a comparative bioavailability/bioequivalence and food effect study (Part B) in healthy subjects.
Part A treated a total of 24 subjects and utilized a randomized, open-label, MAD design with up to 3 separate dose groups of 8 subjects
per group. Within each dose group, subjects were randomized to receive either PF614 (n=6) or OxyContin (n=2). Subjects received repeated
BID doses, planned to be administered every 12 hours (q12h) over a 5-day period, for a total of 9 doses. PF614 doses were 50 mg, 100
mg, and 200 mg, which were expected to be approximately equivalent to the 20 mg, 40 mg, and 80 mg OxyContin doses, for Dose Groups 1,
2, and 3, respectively. Serial PK sampling was performed for the first day/first dose (Day 1) and for the last day/last dose (Day 5).
Only trough PK samples were taken within 30 minutes prior to the morning dose on Days 2, 3, and 4. Safety assessments, including regular
assessments of adverse events (AEs), vital signs (pulse rate, blood pressure, respiratory rate, and oxygen saturation [SpO2]),
clinical laboratory tests, 12-lead electrocardiograms (ECGs), and cardiac telemetry were monitored throughout the study. Subjects were
monitored for hypotension, hypopnea, apnea, and oxygen desaturation.

Part
B treated a total of 60 subjects and utilized an open-label, single-dose, randomized, 4-way crossover design. Subjects were randomized
to receive each of the following single oral doses of study drugs in a Williams design crossover manner (1 at each treatment period):

●
Treatment A: 100 mg PF614, administered under fasted conditions (hereafter referred to as 100 mg PF614, fasted)

●
Treatment B: 100 mg PF614, administered under fed conditions (high-fat breakfast) (hereafter referred to as 100 mg PF614, fed)

●
Treatment C: 40 mg OxyContin, administered under fasted conditions (hereafter referred to as 40 mg OxyContin, fasted)

●
Treatment D: 40 mg OxyContin, administered under fed conditions (high-fat breakfast) (hereafter referred to as 40 mg OxyContin, fed)

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Each
treatment was separated by a washout interval of 5 days. Serial PK sampling was performed after each study drug administration up to
120 hours post dose. Safety including regular assessments of AEs, vital signs (pulse rate, blood pressure, respiratory rate, and SpO2
), clinical laboratory tests, and 12-lead ECGs were monitored. Subjects were monitored for hypotension, hypopnea, apnea, and oxygen
desaturation.

Pharmacokinetics

Part
A: The shape of the plasma concentration versus time curve of oxycodone was similar following administration of PF614 and OxyContin (oxycodone
extended release). Oxycodone plasma exposure (Tmax, Cmax,ss and AUCtau) were assessed and PF614 showed
similar trends as OxyContin following administration of multiple oral BID doses. Due to the small sample number for OxyContin some PK
parameters could not be calculated. Trough concentrations of oxycodone were generally similar from Day 2 through Day 4, suggesting that
subjects achieved steady state after repeated oral BID dosing of PF614 and OxyContin at all dose levels.

Part
B: A total of 57 subjects were included in the PK analyses. The data for Cmax, AUC0-t, and AUC0-inf
of oxycodone post 100 mg PF614 versus 40 mg OxyContin dosing under fasted and fed conditions were completely contained within the standard
bioequivalence limits of 80% to 125%. Therefore, it was concluded that 100 mg PF614 was bioequivalent to 40 mg OxyContin under both fasted
and fed conditions.

Safety

PF614
was generally safe and well-tolerated following oral administration of 50 mg, 100 mg, or 200 mg PF614 BID for 5 days. There was no apparent
difference in the safety profile of single oral doses of 100 mg PF614 when administered in the fasted or fed state or between PF614 and
OxyContin when administered in the fasted and fed state. PF614 was generally safe and well-tolerated following single and multiple oral
doses under naltrexone blockade.

PF614-103
Intranasal Human Abuse Potential Clinical Trial

PF614-103
was a randomized, double-blind, placebo- and active-controlled, 3-way crossover study to evaluate the abuse potential and pharmacokinetics
of intranasally administered PF614, relative to crushed oxycodone IR tablets and placebo, in non-dependent recreational opioid users
conducted by Lotus Clinical Trials LLC through Ohio Clinical Trials, Inc with Principal investigator, Dr. G. Apseloff.

The
study consisted of 4 phases: Screening, Qualification, Treatment, and Follow-up. Subjects were randomized to receive PF614 100mg or crushed
oxycodone 40 mg intranasally. The primary objective of the study was to evaluate the abuse potential of PF614 relative to crushed oxycodone
immediate-release (IR) tablets and placebo following intranasal administration in non-dependent recreational opioid users (n=26), with
the primary pharmacodynamic endpoint being the maximum effect (Emax) for Drug Liking (“at this moment”)
measured up to 24 hours after dosing using a visual analogue scale (VAS). The secondary objectives of the study were to evaluate the
pharmacokinetic profile of PF614 relative to crushed oxycodone IR tablets following intranasal administration, to evaluate the safety
of PF614 following intranasal administration.

In
the study, PF614 powder produced a statistically significant lower peak “drug liking” (Emax) when compared with intranasal
crushed IR oxycodone (p = 0.0133) using the full modified completer population in a 3-period crossover of PF614 vs. crushed oxycodone
and placebo. Furthermore, in a first period analysis of initial impressions of each drug, a statistically significant difference was
noted between PF614 (n=8) and crushed IR oxycodone (n=10) (p = 0.0175), even with this smaller cohort of subjects.

Statistically
significant differences in peak effects (Emax) between PF614 and crushed IR oxycodone intranasal were also demonstrated for the secondary
endpoint of “take drug again,” also using a first period analysis (p < 0.0001).

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The
intranasal HAP study was designed to test if known recreational drug users “liked” the product and is critical for
labeling claims for new drugs in this class. The primary measure in this study, “drug liking,” is recommended by the
FDA in their Guidance on “Assessment of Abuse Potential of Drugs.” This measure is known to correlate with a drug’s
potential for abuse. The results demonstrated that inhaled powdered PF614 had significantly lower drug liking than inhaled crushed IR
oxycodone.

PF614-104
Oral Human Abuse Potential Clinical Trial

PF614-104
was a randomized, double-blind, placebo- and active-controlled, 5-way crossover study to evaluate the abuse potential and pharmacokinetics
of orally administered PF614, relative to oxycodone IR tablets and placebo, in non-dependent recreational opioid users conducted by DVCR,
Kansas.

The
study consisted of 4 phases: Screening, Qualification, Treatment, and Follow-up. Subjects were randomized to receive PF614 50, 100 and
200 mg, oxycodone 40 mg or placebo orally. The primary objective of the study was to evaluate the abuse potential of PF614 relative to
oxycodone immediate-release (IR) tablets and placebo following oral administration in non-dependent recreational opioid users (n=28),
with the primary pharmacodynamic endpoint being the maximum effect (Emax) for Drug Liking (“at this moment”)
and “Take Drug Again” Emax (Secondary endpoint) measured up to 24 hours after dosing using a visual analogue scale (VAS).
The secondary objectives of the study were to evaluate the pharmacokinetic profile of PF614 relative to oxycodone IR tablets and to evaluate
the safety of PF614.

PF614
produced statistically lower effects than oxycodone, the lowest dose p<0.0001, and statistically significant overall “Drug Liking”
at both the low and the mid doses p<0.0001 and p=0.0025, respectively. PF614 took a significantly lower median time to reach Emax
for “Drug Liking” than oxycodone at all three dose levels, which is highly important for reducing drug abuse. Similar findings
were noted with a second endpoint “Take Drug Again”. The secondary endpoint was met at both the low and mid dose of PF614
with highly significant values of p<0.001 and p=0.0038, respectively, and was numerically lower than comparator even at double the
dose, demonstrating that recreational users would be less motivated to abuse PF614 compared to immediate release oxycodone.

In
November 2022, we received written guidance from the FDA that an acute pain indication may be appropriate for PF614. The FDA guidance,
while not binding, states that our proposed clinical development approach of conducting at least two adequate and well-controlled clinical
trials in two different pain models comparing PF614 to a placebo and to another immediate release (IR) opioid, such as IR oxycodone,
appears reasonable to support a new drug application for PF614 for an acute pain indication. The FDA guidance also provides additional
guidance with respect to the non-clinical studies and clinical trials planned by us. The clinical development pathway of PF614 for an
acute pain indication may reduce the development timeline and be more cost-effective than initially pursuing a chronic pain indication
for PF614.

PF614-201
Time of Onset clinical study

PF614-201
was a randomized, double-blind, placebo-controlled study of PF614 50 and 100 mg to evaluate the onset of analgesia following administration
of a single oral dose of PF614 in healthy male subjects in an experimental pain model (cold pressor test [CPT]). This study was initiated
in September of 2023 and enrolled 16 subjects. The Treatment Phase consisted of 2 treatment periods; PF614 50 mg or 100 mg versus placebo.
The CPT, pharmacodynamic (PD), and safety assessments were conducted prior to dosing and for six hours after each study drug administration.
This study was the first to successfully demonstrate the efficacy of PF614. Data was reported December 2023, stating the time-of-onset
of pain relief from both doses of PF614 was identified, and PF614 did decrease the intensity of pain.

PF614-301
Phase 3 Clinical Trial

The
pivotal PF614-301 trial is a multicenter, randomized, double-blind, placebo-controlled study evaluating the efficacy and safety of PF614
for the treatment of moderate to severe pain following abdominoplasty. The study is designed to demonstrate PF614’s ability to provide
strong, consistent post-surgical pain relief while incorporating an innovative chemical mechanism intended to reduce the risk of abuse.
The trial will also evaluate PF614’s potential to provide a smoother, safer treatment of severe acute pain using twice daily dosing with
reduced highs and lows in blood drug concentration, an approach which is seen as beneficial by leaders in the field. Enrollment in the
study began in December 2025.

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PF614-MPAR

We
initiated a Phase 1 study that is evaluating PF614-MPAR in study entitled “A Single Dose, 2 Part Study to Evaluate the Pharmacokinetics
of Oxycodone and PF614, when PF614 Solution is Co-Administered with nafamostat, as an Immediate Release Solution and/or Extended Release
(ER) Capsule Formulations in Healthy Subjects:” We are clinically testing MPAR® in partnership with Quotient Sciences,
using its integrated Translational Pharmaceutics® platform to search for a PF614-MPAR formulation that allows conversion
into oxycodone within the prescribed dose range but reduces conversion to oxycodone at higher than prescribed dose levels in an overdose
scenario.

PF614-MPAR-101
Phase 1 Clinical Trial

The
primary objectives of the Phase 1 study are to assess the pharmacokinetics of oxycodone, when PF614 solution is administered alone and
with nafamostat as an immediate release solution and/or extended-release capsule prototypes. The study is designed to aid in the selection
of the optimal nafamostat formulation and dose to combine with PF614 in order to provide oxycodone when a prescribed dose is taken yet
attenuate the maximum plasma concentration (Cmax) and the area under the concentration time curve (AUC) of oxycodone when
more than the prescribed PF614-MPAR dose is taken. Initial data was reported in May 2022 that demonstrated nafamostat administer in combination
with PF614 in a simulated overdose situation reduced the release of oxycodone from PF614 as designed. We completed the clinical portion
of Part A of this study in December 2022, with the identification of an optimal drug product formulation. A second, Part B was initiated
in January 2023 to test the overdose protection of the selected formulation by administering an escalating number of dose units to a
group of healthy subjects. Enrollment was completed in March 2023.

Part
B was a dose escalation study of PF614 25 mg alone, or increasing dose units of PF614-MPAR 25 mg (PF614 25 mg with 1 mg formulated nafamostat),
and enrolled 6 to 8 healthy subjects in each cohort. PF614-MPAR 25 mg was delivered at 1, 2, 3, 5, and 8 doses simultaneously, with safety
and PK endpoints. The plasma PK of oxycodone released from PF614 or PF614-MPAR was measured and compared to prior data where PF614 was
delivered up to 200 mg alone. Additionally, the PK of parent PF614 and metabolic fragments were measured.

The
results of the study successfully demonstrated that up to 2 dose units of PF614-MPAR delivered oxycodone at the same level as was derived
from PF614 without MPAR®. At 3 units of PF614-MPAR the amount of oxycodone delivered was reduced compared to a 75 mg dose
of PF614. At 8 dose units there was a significant decrease (p<0.00333) in the maximal oxycodone plasma concentration (Cmax) as compared
to that delivered from unprotected PF614 200 mg. In addition, delivering 2 doses of PF614-MPAR sequentially, 12 hours apart did not affect
the release of oxycodone from the 2nd dose. Data from this study was reported in May 2023.

PF614-MPAR
was granted Breakthrough Therapy designation by the FDA in January 2024. A Type D meeting request to discuss the non-clinical program
for PF614-MPAR was submitted in 2023 and responses to questions were received in February 2024.

PF614-MPAR-102
Phase 1b Clinical Trial

The
primary objectives of the Phase 1b study are to assess the pharmacokinetics of oxycodone when PF614 is administered alone and with formulated
nafamostat, evaluate a food effect, and explore PF614-MPAR delivered in a multi-ascending dose study. The study initiated in December
2024 and is expected to be completed in 2026.

Competition

The
life sciences industry is characterized by rapidly advancing technologies, intense competition, and a strong emphasis on proprietary
products. We expect to face competition from a number of sources, including pharmaceutical and biotechnology companies, generic drug
companies, drug delivery companies, and academic and research institutions. Most of these existing and potential competitors have significantly
greater financial and other resources than we do.

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The
key competitive factors that are expected to affect the development and commercial success of our product candidates include safety and
tolerability, the ability of our product candidates to limit human abuse potential, bioavailability and therapeutic efficacy of our product
candidates, market indications and convenience of dosing and distribution. PF614 will also face competition from commercially available
generic and branded extended-release and long-acting opioid drugs other than oxycodone, including, but not limited to, fentanyl, hydromorphone,
oxymorphone, and methadone, as well as opioids that are currently in clinical development.

We
believe that obtaining an abuse-deterrent label through the FDA for our prodrugs would provide us with a significant competitive advantage.
There are only four commercially available (in the United States) opioid drugs for chronic pain relief that have an abuse-deterrent label.
These drugs are MorphaBond™ ER, marketed by Daiichi Sankyo, OxyContin® ER and Hysingla® ER, both
of which are marketed by Purdue Pharma, LP, and Collegium Pharmaceutical, Inc.’s XTampza®ER. However, obtaining
an abuse-deterrent label involves a lengthy and complicated process with no certainty of success. We believe abuse-deterrent opioids
represent a therapeutic option to maximize pain relief in patients for whom opioid analgesia is indicated, while reducing the risks of
abuse and diversion.

A
number of other companies including, but not limited to, Pfizer Inc., Daiichi Sankyo, Endo Health Solutions, Nektar Therapeutics, Teva
Pharmaceutical, Inc., Egalet Ltd., KemPharm Inc., Elysium Therapeutics Inc., and Acura Pharmaceutical, have either extended-release or
abuse-deterrent products in various stages of development. Other companies offer products indicated for chronic, severe, long-term pain
with various delivery technologies, but these products do not have abuse-deterrent claims on their labels. Vertex has recently announced
the approval of a non-opioid pain product, suzetrigine, that inhibits NaV1.8. The clinical data provided to date has indicated that suzetrigine
did not provide superior pain relief compared to the opioid control arm of the Phase 3 study.

We
do not believe there are other companies developing products that have an overdose mechanism similar to our MPAR® technology.

Intellectual
Property

Our
commercial success depends in part on our ability to obtain and maintain proprietary protection for product candidates and any of our
future product candidates, novel discoveries, product development technologies, and know-how; to operate without infringing on the proprietary
rights of others; and to prevent others from infringing our proprietary rights. Our policy is to seek to protect our proprietary position
by, among other methods, filing or in-licensing United States and foreign patents and patent applications related to our proprietary
technology, inventions, and improvements that are important to the development and implementation of our business. We also rely on trademarks,
trade secrets, know-how, continuing technological innovation, and potential in-licensing opportunities to develop and maintain our proprietary
position.

In
August 2020, EBIR entered into a Technology Transfer Agreement with Mucokinetica to acquire its intellectual property and all assets
associated with the inhaled nafamostat program. Specifically, EBIR acquired Patent EP2124926B1 and all data and assets associated with
the development and expansion of the inhaled nafamostat program. These assets included COVID-19 and cystic fibrosis drug targets in development.

In
consideration for this intellectual property, Mucokinetica received a 1% equity ownership in EBIR, and its founders, Roderick Hall and
Peter Cole, entered into Consulting Agreements with EBIR. The Consulting Agreements were subsequently terminated by Messrs. Hall and
Cole.

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Patents
and Patent Applications

We
own numerous patents and applications in the United States and significant commercial markets, such as Europe, China, and Japan, relating
to our product candidates currently in development, as well as other product candidates that may be developed in the future. These patents
and applications are projected to expire between 2028 and 2042, subject to any patent term adjustment or extension that might be available
in a particular jurisdiction. A table of the key patent families and their natural or projected expiry dates is presented below.

Countries of
Filings*

Natural or Projected
Expiry Date

TAAP and MPAR Patents and Applications for Opioids

Compositions Comprising Enzyme-Cleavable
Ketone-Modified Opioid Prodrugs and Optional Inhibitors Thereof

U.S., Australia, Brazil, Canada,
China, Europe, Hong Kong, Israel, India, Japan, Mexico, Russia

2030

Compositions Comprising Enzyme-Cleavable Opioid Prodrugs
and Inhibitors Thereof

U.S.

2030

Compositions Comprising Enzyme-Cleavable Oxycodone
Prodrugs

U.S., Australia, Brazil, Canada, China, Europe, Hong
Kong, Israel, India, Japan, Russia

2032

Compositions Comprising Enzyme-Cleavable Prodrugs and
Controlled Release Nafamostat and Methods of Use Thereof

U.S., PCT, Taiwan

2042

Active Agent Prodrugs with Heterocyclic Linkers

U.S., Australia, Brazil, Canada, China, Europe, Hong
Kong, Israel, India, Japan, Russia

2032

Enzyme-Cleavable Methadone Prodrugs and Methods of
Use Thereof

U.S., PCT, Europe, Brazil, China, Japan, Korea, Canada,
Mexico, Australia, India, Israel

2042

Nafamostat Patents and Applications

Methods of Treating Coronavirus Infections and COVID-19

U.S., Canada, Europe

2041

Oral formulations of Nafamostat

U.S., PCT, Taiwan, Europe, Brazil, China, Japan, Korea,
Canada, Mexico, Australia, India, Israel

2042

Methods of Treating Respiratory Diseases with Mucostasis

Germany, France, Italy, United Kingdom

2028

TAAP and MPAR Patents and Applications for Amphetamines

Compositions Comprising Enzyme-Cleavable Amphetamine
Prodrugs and Inhibitors Thereof

U.S., Europe

2031

Compositions Comprising Enzyme-Cleavable Amphetamine
Prodrugs and Inhibitors Thereof

U.S., Europe, Hong Kong

2040

*“Europe”
refers to patent applications filed in, and patents issued by, the European Patent Office (“EPO”), which can provide
the basis for rights in multiple countries that are members of the European Patent Convention.

While
we seek broad coverage under our existing patent applications, there is always a risk that an alteration to the products or processes
may provide sufficient basis for a competitor to avoid infringing our patent claims. In addition, patents, if granted, expire and we
cannot provide any assurance that any patents will be issued from our pending or any future applications or that any potentially issued
patents will adequately protect our product candidates.

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Individual
patents extend for varying periods depending on the date of filing of the patent application or the date of patent issuance and the legal
term of patents in the countries in which they are obtained. Generally, patents issued for regularly filed applications in the United
States are granted a term of 20 years from the earliest effective non-provisional filing date. In addition, in certain instances, a patent
term can be extended to recapture a period due to delay by the United States Patent and Trademark Office (“USPTO”)
in issuing the patent as well as a portion of the term effectively lost as a result of the FDA regulatory review period. However, as
to the FDA component, the restoration period cannot be longer than five years and the total patent term including the restoration period
must not exceed fourteen years following FDA approval. The duration of foreign patents varies in accordance with provisions of applicable
local law, but typically is also 20 years from the earliest effective non-provisional filing date. However, the actual protection afforded
by a patent varies on a product-by-product basis, from country to country, and depends upon many factors, including the type of patent,
the scope of its coverage, the availability of regulatory-related extensions, the availability of legal remedies in a particular country,
and the validity and enforceability of the patent.

Our
commercial success will also depend in part on not infringing upon the proprietary rights of third parties. It is uncertain whether the
issuance of any third-party patent would require us to alter our development or commercial strategies for our products or processes,
or to obtain licenses or cease certain activities. Our breach of any license agreements or failure to obtain a license to proprietary
rights that we may require to develop or commercialize our future products may have an adverse impact on us. If third parties prepare
and file patent applications in the United States that also claim technology to which we have rights, we may have to participate in interference
or derivation proceedings in the USPTO to determine priority of invention. For more information, please see “Risk Factors—Risks
Related to Our Intellectual Property.”

TAAP
and MPAR® Patents and Applications for Opioids

We
are the owner of patent families that include several granted U.S. patents, as well as granted patents and pending patent applications
in numerous foreign jurisdictions, including Australia, Brazil, Canada, China, Europe, India, Japan, and Russia, relating to chemically
modified opioids, such as oxycodone, methadone, and hydromorphone, covalently linked using specific linkers to a gastrointestinal enzyme-cleavable
moiety and pharmaceutical compositions containing these modified opioids, pharmaceutical compositions containing these modified opioids
and a gastrointestinal enzyme inhibitor, and methods of using the same to treat pain. Three of these patent families are directed to
ketone containing opioids and cover PF614 and PF614-MPAR and certain methadone TAAP product candidates that are still in the discovery
phase. These three families contain issued patents in the United States and certain foreign jurisdictions, including Australia, Brazil,
Canada, China, Europe, India, Japan, and Russia and expire between 2030 and 2032, subject to any applicable patent term extension that
might be available in a jurisdiction. We also own issued United States and pending Patent Cooperation Treaty (PCT), and Taiwan applications
directed to oral formulations of PF614-MPAR, which if pursued and issued would expire in 2042, subject to any potential patent term adjustment
or extension that may be available in a jurisdiction. We also own one patent family that includes granted patents in the United States,
as well as granted patents and pending patent applications in numerous foreign jurisdictions, including Australia, Brazil, Canada, China,
Europe, India, Japan, and Russia, relating to chemically modified ketone-containing agents, such as oxycodone, methadone, and hydromorphone,
covalently linked using specific linkers to a gastrointestinal enzyme-cleavable moiety, pharmaceutical compositions containing these
modified ketone-containing agents, pharmaceutical compositions containing these modified ketone-containing agents and a gastrointestinal
enzyme inhibitor, and methods of using the same to treat pain, would cover certain methadone TAAP product candidates that are still in
discovery phase and expire in 2032. While we own these patent families, we have not updated records in the various patent offices to
reflect our ownership of these patent families. Failure to update such ownership may result in an innocent purchaser potentially acquiring
rights in such patents that are adverse to our interests. Furthermore, as noted above, we have not obtained assignments for certain patent
applications relating to abuse-resistant amphetamines.

We
believe that one patent covering PF614 will be eligible for up to five years of patent term extension in the United States and intend
to pursue such extension. In addition to patent exclusivity until at least 2032, under the provisions of the Hatch-Waxman Act, upon any
approval in the United States, we believe that PF614 will be eligible for five-year New Chemical Entity, or NCE, regulatory exclusivity,
during which time no 505(b)(2) New Drug Application, or NDA, or Abbreviated New Drug Application, or ANDA, can be approved that contains
the same active moiety as the chemical entity in the PF614 NDA. In addition, if an ANDA or 505(b)(2) applicant were to file its application
referencing the NDA for PF614 before expiration of our formulation patent and the applicant asserted that the patent is invalid or would
not be infringed, it may be subject to additional waiting periods prior to the FDA’s approval (including a statutory thirty-month
stay, starting at the end of the five-year NCE regulatory exclusivity period, if we sue for infringement, or a shorter period if the
patent expires of there are certain settlements or judicial decisions in the patent litigation) and may ultimately be required to wait
until the natural expiration of our compositions patents if the patents are found to be valid and infringed by the challenging applicant.
For more information please see “—Patents and Patent Applications.”

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Nafamostat
Patents Applications

We
own pending applications in the U.S., Canada and Europe directed to the use of orally administered nafamostat and extended-release formulations
of nafamostat. Some of the claims are directed to the use of oral nafamostat for the treatment of infections caused by coronaviruses,
including COVID-19, and pending United States, PCT, and Taiwan patent applications directed to oral formulations of nafamostat. We intend
to pursue these applications in the United States and other significant commercial markets and any patents that may be issued would expire
in 2041 and 2042, respectively, subject to any applicable patent term adjustment or extension in a particular jurisdiction. Additionally,
we acquired one European patent from Mucokinetica Ltd. that is directed to the use of certain compounds, including nafamostat, for the
manufacture of a medicament for the treatment of respiratory diseases with mucostasis or poor mucus clearance. This patent was validated
in Germany, France, Italy, and the United Kingdom and expires in 2028, subject to any applicable patent term extension that might be
available in Europe Union or United Kingdom. Currently, we do not have any issued patent or pending application directed to methods of
treating infections caused by coronaviruses, including COVID-19, with inhaled nafamostat, but intend to file pending applications upon
development of a suitable inhalation formulation of nafamostat. We believe that one patent covering nafamostat will be eligible for up
to five years of patent term extension in the United States and Europe and intend to pursue such extension. In addition to patent exclusivity,
under the provisions of the Hatch-Waxman Act, upon any approval in the United States, we believe that nafamostat will be eligible for
five-year NCE regulatory exclusivity, during which time no 505(b)(2) NDA or ANDA can be approved that contains the same active moiety
as the chemical entity in the nafamostat NDA. In addition, if an ANDA or 505(b)(2) applicant were to file its application referencing
the NDA for nafamostat before expiration of our use patent and the applicant asserted that the patent is invalid or would not be infringed,
it may be subject to additional waiting periods prior to the FDA’s approval (including a statutory thirty-month stay, starting
at the end of the five-year NCE regulatory exclusivity period, if we sue for infringement, or a shorter period if the patent expires
of there are certain settlements or judicial decisions in the patent litigation) and may ultimately be required to wait until the natural
expiration of our compositions patents if the patents are found to be valid and infringed by the challenging applicant. For more information
please see “—Patent and Patent Applications.”

TAAP
and MPAR® Patents and Applications for Amphetamines

We
are the owner of two patent families that include issued and pending applications in the United States and numerous European foreign
jurisdictions relating to chemically modified amphetamines covalently linked to a gastrointestinal enzyme-cleavable moiety, pharmaceutical
compositions containing the modified amphetamines, pharmaceutical compositions containing the modified amphetamines and a gastrointestinal
enzyme inhibitor and methods of using the same to treat a subject. While we own these patent families, we have not updated the records
in the various patent offices to reflect our ownership of this patent family. Failure to update such ownership may result in an innocent
purchaser potentially acquiring rights in such patents that are adverse to our interests. In addition, we own pending United States and
European patent applications directed to pharmaceutical compositions containing chemically modified amphetamines covalently linked to
a gastrointestinal enzyme-cleavable moiety and a trypsin inhibitor and methods of using the same to treat a subject. We have not obtained
assignments from all of the inventors of these applications to date, which could negatively impact our ability to pursue or enforce this
application. If issued, these patent applications would expire between 2031 and 2040, subject to any applicable patent term adjustment
or extension that might be available in a jurisdiction.

Trademarks
and Trade Secrets

We
intend to pursue trademark registrations in the United States and other significant commercial markets for our product candidates as
they progress through clinical development. We received registration of our trademark for MPAR on May 16, 2023.

Furthermore,
we rely upon trade secrets, know-how, continuing technological innovation, and potential in-licensing opportunities to develop and maintain
our competitive position. We seek to protect our proprietary information, in part, using confidentiality and invention assignment agreements
with our commercial partners, collaborators, employees, and consultants. These agreements are designed to protect our proprietary information
and, in the case of the invention assignment agreements, to grant us ownership of technologies that are developed through a relationship
with an employee or a third party. These agreements may be breached, and we may not have adequate remedies for any breach. In addition,
our trade secrets may otherwise become known or be independently discovered by competitors. To the extent that our commercial partners,
collaborators, employees, and consultants use intellectual property owned by others in their work for us, disputes may arise as to the
rights in related or resulting know-how and inventions.

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Manufacturing
and Supply

We
do not currently own or operate manufacturing facilities for the production of clinical or commercial quantities of our product candidates.
Our drug substance and drug products are manufactured for us by CMOs, to our specifications. Any manufacturing problem or the loss of
a CMO could be disruptive to our operations.

Our
lead product candidate, PF614, is a small molecule opioid prodrug. As such, it is a controlled substance, regulated by the Drug Enforcement
Administration (“DEA”) and state-controlled substance authorities. Our CMOs will be required to be registered with
DEA and will be responsible for obtaining adequate quota to manufacture and otherwise handle controlled substances.

We
currently engage third parties to provide clinical supplies of PF614 and nafamostat. We also currently engage a CMO to provide drug product
manufacture of PF614, PF614-MPAR and nafamostat. We currently have sufficient supplies of PF614 and nafamostat on hand for our current
clinical trial needs. Any reliance on suppliers may involve several risks, including a potential inability to obtain critical materials
and reduced control over production costs, delivery schedules, reliability, and quality.

Government
Grants

We
have received funding under federal grant award programs through governmental agencies, such as the NIH and NIDA. For the year ended
December 31, 2025, we received federal grant funding totaling $4.8 million from NIH related to the Phase 1 clinical trial for PF614-MPAR.
Current remaining funding under the PF614-MPAR grant totaled $2.1 million as of December 31, 2025, covering the period through May 2026.
The PF614-MPAR grant also includes $5.3 million of pending funding from June 2026 through May 2027. We may apply for additional grant
funding from these or similar governmental agencies in the future.

Government
Regulation

In
the United States, pharmaceutical products are subject to extensive regulation by the FDA, and those pharmaceutical products that are
controlled substance are also subject to extensive regulation by the DEA. The Federal Food, Drug, and Cosmetic Act (the “FDC
Act”), the Controlled Substances Act (“CSA”), and other federal, state, and local statutes and regulations,
govern, among other things, the research, development, testing, manufacture, storage, recordkeeping, approval, labeling, promotion and
marketing, distribution, prescribing, dispensing, post-approval monitoring and reporting, sampling, and import and export of pharmaceutical
products. Pharmaceutical products used for the prevention, treatment, or cure of a disease or condition of a human being are subject
to regulation under the FDC Act. Failure to comply with applicable U.S. requirements may subject a company to a variety of administrative
or judicial sanctions, such as clinical hold, FDA refusal to approve pending NDAs, revocation of licensing authority, warning or untitled
letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, civil penalties,
and criminal prosecution.

The
FDA Drug Approval Process

FDA
approval is required before any new drug can be marketed. A new drug is one not generally recognized by experts qualified by scientific
training and experience, as safe and effective for its intended use. The process of drug development is complex and lengthy. The activities
undertaken before a new pharmaceutical product may be marketed in the United States generally include, but are not limited to, preclinical
studies; submission to the FDA of an IND, which must become active before human clinical trials may commence; adequate and well-controlled
human clinical trials to establish the safety and efficacy of the product; submission to the FDA of an NDA; filing of the NDA by FDA;
satisfactory completion of an FDA pre-approval inspection of the clinical trial sites and manufacturing facility or facilities at which
both the active ingredients and finished drug product are produced to assess compliance with, among other things, patient informed consent
requirements, the clinical trial protocols, current Good Clinical Practices, or GCP, and GMPs; and FDA review and approval of the NDA
prior to any commercial sale and distribution of the product in the United States.

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Preclinical
studies include laboratory evaluation of product chemistry and formulation, and in some cases, animal studies and other studies to preliminarily
assess the potential safety and efficacy of the product candidate. The results of preclinical studies together with manufacturing information,
analytical data, and detailed information including protocols for proposed human clinical trials are then submitted to the FDA as a part
of an IND. An IND must become effective, and approval must be obtained from an Institutional Review Board (“IRB”)
prior to the commencement of human clinical trials. The IND becomes effective 30 days following its receipt by the FDA unless the FDA
objects to, or otherwise raises concerns or questions and imposes a clinical hold. We, the FDA, or the IRB may suspend or terminate a
clinical trial at any time after it has commenced due to safety or efficacy concerns or for commercial reasons. In the event the FDA
imposes a clinical hold, the IND sponsor must address any outstanding FDA concerns or questions to the satisfaction of the FDA before
clinical trials can proceed or resume.

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

In
Phase 1, the initial introduction of the drug into patients, the product is tested to assess safety, dosage tolerance, metabolism, pharmacokinetics,
pharmacological actions, side effects associated with drug exposure, and to obtain early evidence of a treatment effect if possible.
Phase 2 usually involves trials in a limited patient population to determine the effectiveness of the drug for a particular indication,
determine optimal dose and regimen, and to identify common adverse effects and safety risks. If a compound demonstrates evidence of effectiveness
and an acceptable safety profile in Phase 2 evaluations, Phase 3 trials are undertaken to obtain additional information about clinical
effects and confirm efficacy and safety in a larger number of patients, typically at geographically dispersed clinical trial sites, to
permit the FDA to evaluate the overall benefit-risk relationship of the drug and to provide adequate information for the labeling of
the product. In most cases, the FDA requires two adequate and well-controlled Phase 3 clinical trials to demonstrate the safety and efficacy
of the drug. In rare instances, a single Phase 3 trial may be sufficient when either (1) the trial is a large, multicenter trial demonstrating
internal consistency and a statistically very persuasive finding of a clinically meaningful effect on mortality, irreversible morbidity,
or prevention of a disease with a potentially serious outcome and confirmation of the result in a second trial would be practically or
ethically impossible or (2) the single trial is supported by other confirmatory evidence.

In
addition, the manufacturer of an investigational drug in a Phase 2 or Phase 3 clinical trial for a serious or life-threatening disease
is required to make available, such as by posting on its website, its policy on evaluating and responding to requests for expanded access
to such investigational drug.

After
completion of the required clinical testing, an NDA is prepared and submitted to the FDA. FDA approval of the NDA is required before
marketing and distribution of the product may begin in the United States. The NDA must include the results of all preclinical, clinical,
and other testing and a compilation of data relating to the product’s pharmacology, chemistry, manufacture, and controls. The cost
of preparing and submitting an NDA is substantial. The submission of most NDAs is additionally subject to a substantial application user
fee, currently exceeding $4.6 million for Fiscal Year 2026. Under an approved NDA, the applicant is also subject to an annual program
fee, currently exceeding $440,000. These fees typically increase annually. Under limited circumstances, an applicant may be exempt from
or seek a waiver of the application fee requirement.

The
FDA has 60 days from its receipt of an NDA to determine whether the application will be filed based on the FDA’s determination
that it is adequately organized and sufficiently complete to permit substantive review. Once the submission is filed, the FDA begins
an in-depth review. The FDA has agreed to certain performance goals to complete the review of NDAs. For a standard review, the goal for
review of a new molecular entity (“NME”) is ten months from the date the FDA files the NDA, while the goal for review
of a non-NME is ten months from the date of receipt of the NDA. For an NDA that has received a priority review designation from the FDA,
the goal for review of an NME is six months from the date the FDA files the NDA, while the goal for review of a non-NME is six months
from the date of receipt of the NDA. An NDA can receive a priority review designation when the FDA determines the drug has the potential
to treat a serious or life-threatening condition and, if approved, would be a significant improvement in safety or effectiveness compared
to available therapies. The review process for both standard and priority reviews may be extended by the FDA for three or more additional
months to consider certain late-submitted information, or information intended to clarify information already provided in the NDA submission.

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The
FDA may also refer applications for novel drug products, as well as drug products that present difficult questions of safety or efficacy,
to be reviewed by an advisory committee—typically a panel that includes clinicians, statisticians, and other experts—for
review, evaluation, and a recommendation as to whether the NDA should be approved. The FDA is not bound by the recommendation of an advisory
committee, but generally follows such recommendations. Before approving an NDA, the FDA will typically inspect one or more clinical sites
to assure compliance with GCP. Additionally, the FDA will inspect the facility or the facilities at which the drug product is manufactured.
The FDA will not approve the product unless compliance with cGMP is satisfactory and the NDA contains data that provide substantial evidence
that the drug is safe and effective in the claimed indication.

After
the FDA evaluates the NDA and completes any clinical and manufacturing site inspections, it issues either an approval letter or a complete
response letter. A complete response letter generally outlines the deficiencies in the NDA submission and may require substantial additional
testing, or information, in order for the FDA to reconsider the application for approval. If, or when, those deficiencies have been addressed
to the FDA’s satisfaction in a resubmission of the NDA, the FDA will issue an approval letter. The FDA has committed to reviewing
such resubmissions in two or six months depending on the type of information included. An approval letter authorizes commercial marketing
and distribution of the drug with specific prescribing information for specific indications. As a condition of NDA approval, the FDA
may require a risk evaluation and mitigation strategy (“REMS”) to help ensure that the benefits of the drug outweigh
the potential risks to patients. A REMS can include medication guides, communication plans for healthcare professionals, and elements
to assure a products safe use (“ETASU”). An ETASU REMS can include, but is not limited to, special training or certification
for prescribing or dispensing the product, dispensing the product only under certain circumstances, special monitoring, and the use of
patient-specific registries. The requirement for a REMS can materially affect the potential market and profitability of the product.
Moreover, the FDA may require substantial post-approval testing and surveillance to monitor the product’s safety or efficacy.

Before
approval, the FDA evaluates the results from in vitro manipulation and extraction, pharmacokinetics, and clinical human abuse potential
studies to determine whether the accumulated evidence is sufficient to warrant claims of abuse deterrence. Post-marketing studies may
also be required to determine whether the marketing of a product with abuse-deterrent properties results in meaningful reductions in
abuse, misuse, and related adverse clinical outcomes, including addiction, overdose, and death in the post-approval setting.

Once
granted, product approvals may be withdrawn if compliance with regulatory standards is not maintained or problems are identified following
initial marketing. Changes to some of the conditions established in an approved NDA, including changes in indications, product labeling,
manufacturing processes, or facilities, require submission and FDA approval of a new NDA, or supplement to an approved NDA, before the
change can be implemented. An NDA supplement for a new indication typically requires clinical data similar to that in the original application,
and the FDA uses the same procedures and actions in reviewing NDA supplements as it does in reviewing original NDAs.

Section
505(b)(2) NDAs

An
alternative to the NDA pathway described above is an NDA submitted under Section 505(b)(2) of the FDC Act, which enables the applicant
to rely, in part, on the FDA’s prior findings in approving a similar product or published literature in support of its application.
Section 505(b)(2) NDAs often provide an alternate path to FDA approval for modified formulations, new routes of administration, or new
uses of previously approved products. Section 505(b)(2) permits the submission of an NDA where at least some of the information required
for approval comes from studies not conducted by, or for, the applicant and for which the applicant has not obtained a right of reference.
If the Section 505(b)(2) applicant can establish that reliance on the FDA’s prior findings of safety or effectiveness is scientifically
appropriate, it may eliminate the need to conduct certain preclinical or clinical studies of the new product. The FDA may also require
companies to perform additional studies or measurements to support the change from the approved product. The FDA may then approve the
new product candidate for all, or some, of the indications for which the referenced product has been approved, as well as for any new
indication sought by the Section 505(b)(2) applicant.

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Fast
Track Designation and Priority Review

FDA
is required to facilitate the development, and expedite the review, of drugs that are intended for the treatment of a serious or life-threatening
disease or condition for which there is no effective treatment and which demonstrate the potential to address unmet medical needs for
the condition. Fast Track designation may be granted for products that are intended to treat a serious or life-threatening disease or
condition for which there is no effective treatment and preclinical or clinical data demonstrate the potential to address unmet medical
needs for the condition. Fast Track designation applies to both the product and the specific indication for which it is being studied.
Any product submitted to FDA for marketing, including under a Fast Track designation, may be eligible for other types of FDA programs
intended to expedite development and review, such as priority review.

Priority
review may be granted for products that are intended to treat a serious or life-threatening condition and, if approved, would provide
a significant improvement in safety and effectiveness compared to available therapies. FDA will attempt to direct additional resources
to the evaluation of an application designated for priority review to facilitate the review.

Breakthrough
Therapy Designation

FDA
Breakthrough Therapy designation is designed to expedite the development and review of drugs that are intended to treat a serious condition
where preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over available therapies. The primary
intent of Breakthrough Therapy designation is to develop evidence needed to support approval as efficiently as possible. The designation
provides all the features of Fast Track designation including accelerated approval and priority review along with intensive guidance
involving FDA senior managers on an efficient drug development program.

Disclosure
of Clinical Trial Information

Sponsors
of clinical trials of FDA-regulated products, including drugs, are required to register and disclose certain clinical trial information
on the website www.clinicaltrials.gov. Information related to the product, patient population, phase of investigation, trial sites and
investigators, and other aspects of a clinical trial are then made public as part of the registration. Sponsors are also obligated to
disclose the results of their clinical trials after completion. Disclosure of the results of clinical trials can be delayed in certain
circumstances for up to two years after the date of completion of the trial. Competitors may use this publicly available information
to gain knowledge regarding the progress of clinical development programs as well as clinical trial design.

The
Hatch-Waxman Amendments

Under
the Drug Price Competition and Patent Term Restoration Act of 1984, referred to as the Hatch-Waxman Amendments, a portion of a product’s
U.S. patent term that was lost during clinical development and regulatory review by the FDA may be restored. The Hatch-Waxman Amendments
also provide a process for listing patents pertaining to approved products in the FDA’s Approved Drug Products with Therapeutic
Equivalence Evaluations (commonly known as the “Orange Book”) and for a competitor seeking approval of an application
that references a product with listed patents to make certifications pertaining to such patents. In addition, the Hatch-Waxman Amendments
provide for a statutory protection, known as non-patent exclusivity, against the FDA’s acceptance or approval of certain competitor
applications.

Patent
Term Extension

Patent
Term Extension (“PTE”) in the United States can compensate for lost patent grant time during product development and
the regulatory review process for a patent that covers a new product or its use. This PTE period is generally one-half the time between
the effective date of an IND (falling after issuance of the patent) and the submission date of an NDA, plus the time between the submission
date of an NDA and the approval of that application, provided the sponsor acted with diligence. PTEs that can be obtained are for up
to five years beyond the expiration of the patent or fourteen years from the date of product approval, whichever is earlier. Only one
patent applicable to an approved drug may be extended and the extension must be applied for prior to expiration of the patent. The USPTO,
in consultation with the FDA, reviews and approves the application for any patent term extension or restoration.

26

The
term of individual patents depends upon the legal term of the patents in the countries in which they are obtained. In most countries
in which we file, the patent term is 20 years from the earliest date of filing a nonprovisional patent application related to the patent.
A U.S. patent also may be accorded patent term adjustment, or PTA, under certain circumstances to compensate for delays in obtaining
the patent from the USPTO. In some instances, such a PTA may result in a U.S. patent term extending beyond 20 years from the earliest
date of filing a non-provisional patent application related to the U.S. patent. In addition, in the United States, the term of a U.S.
patent that covers an FDA-approved drug may also be eligible for a patent term extension, or PTE, which permits patent term restoration
as compensation for the patent term lost during the FDA regulatory review process. The Hatch-Waxman Act permits a PTE of up to five years
beyond the expiration of the patent. The length of the PTE is related to the length of time the drug is under regulatory review. PTE
cannot extend the remaining term of a patent beyond a total of fourteen years from the date of product approval and only one patent applicable
to an approved drug may be extended. Similar provisions are available in Europe and certain other jurisdictions to extend the term of
a patent that covers an approved drug. In the future, if and when our products receive FDA approval, we expect to apply for PTEs on patents
covering products eligible for PTE. We plan to seek PTEs for any of our issued patents in any jurisdiction where these are available;
however, there is no guarantee that the applicable authorities, including the FDA in the United States, will agree with our assessment
of whether such extensions should be granted, and if granted, the length of such extensions.

We
also believe that (1) PF614 and nafamostat will be eligible for a five-year NCE regulatory exclusivity, and (2) PF614-MPAR will be eligible
for a three-year clinical investigation, or CI, regulatory exclusivity, under the Hatch-Waxman Act, during which time no ANDA can be
approved.

Under
the Hatch-Waxman Act, patents covering the product such as patents claiming the approved composition of matter, approved methods of use,
approved formulations, and approved dosing and administration shall be listed in the Orange Book, which identifies drug products approved
by FDA under the FDC Act. Applicable regulatory exclusivities, such as the five-year NCE exclusivity and the three-year CI exclusivity,
are also listed in the Orange Book. If an ANDA or 505(b)(2) applicant were to file its application before expiration of all patents listed
in the Orange Book, it must certify whether it will either honor or challenge all the patents listed in the Orange Book. If an Orange
Book listed patent is challenged and we sue the ANDA or 505(b)(2) applicant for infringement, a statutory 30-month stay of approval,
started at the end of the NCE exclusivity period, will be put in place that will prohibit the FDA from finally approving the ANDA or
505(b)(2) application until the 30-months have expired or after a court has held in favor of the ANDA or 505(b)(2) applicant. The 30-month
stay begins at the end of the five-year NCE exclusivity period. If the Orange Book listed patent(s) is ultimately held valid and infringed,
the ANDA or 505(b)(2) applicant will not be finally approved until the Orange Book listed patent(s) expires. If a pediatric study is
requested by the FDA in a Pediatric Written Request, or PWR, and we complete the pediatric study according to the terms of the PWR, all
unexpired Orange Book listed exclusivities (patent or regulatory) will be extended by six months.

Similar
provisions are available in Europe, Japan, and certain other jurisdictions to extend the exclusivity of a patent that covers an approved
drug. In Europe, we believe PF614 and nafamostat will be eligible for 10 years of regulatory exclusivity from European Marketing Application,
or EMA, approval. In Japan, we believe PF614 will be eligible for eight years of regulatory exclusivity from a Japanese new drug application,
or J-NDA, approval.

Orange
Book Listing

In
seeking approval for a drug through an NDA, applicants are required to list with the FDA each patent with claims covering the applicant’s
product or method of using the product. Upon approval of a drug, each of the patents identified in the application for the drug are then
published in the FDA’s Orange Book. Drugs listed in the Orange Book can, in turn, be cited by potential generic competitors in
support of approval of an ANDA. An ANDA provides for marketing of a drug product that has the same active ingredients in the same strengths
and dosage form as the listed drug and has been shown to be bioequivalent to the listed drug. Other than the requirement for bioequivalence
testing, ANDA applicants are not required to conduct, or submit results of, preclinical or clinical tests to prove the safety or effectiveness
of their drug product. Drugs approved in this way are commonly referred to as “generic equivalents” to the listed
drug and can often be substituted by pharmacists under prescriptions written for the original listed drug.

The
ANDA applicant is required to certify to the FDA concerning any patents listed for the approved 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. The ANDA applicant may also elect to submit a Section VIII
statement certifying that its proposed ANDA labeling does not contain (or carves out) any language regarding the patented method-of-use
rather than certify to a listed method-of-use patent. If the applicant does not challenge the listed patents, the ANDA application will
not be approved until all the listed patents claiming the referenced product have expired.

27

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 ANDA 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 filed with and accepted 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 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 applicant.

An
applicant submitting an NDA under Section 505(b)(2) of the FDC Act, which permits the filing of an NDA where at least some of the information
required for approval comes from studies not conducted by, or for, the applicant and for which the applicant has not obtained a right
of reference, is required to certify to the FDA regarding any patents listed in the Orange Book for the approved product it references
to the same extent that an ANDA applicant would.

Market
Exclusivity

Market
exclusivity provisions under the FDC Act also can delay the submission or the approval of certain applications. The FDC Act provides
a five-year period of non-patent marketing exclusivity within the United States to the first applicant to gain approval of an NDA for
a new chemical entity (“NCE”). A drug is entitled to NCE exclusivity if it contains a drug substance with no active
moiety of which has been previously approved by the FDA. During the exclusivity period, the FDA may not accept for review an ANDA or
a 505(b)(2) NDA submitted by another company for another version of such drug where the applicant does not own or have a legal right
of reference to all the data required for approval. However, an application may be submitted after four years if it contains a Paragraph
IV certification. For a drug that has been previously approved by the FDA, the FDC Act also provides three years of marketing exclusivity
for an NDA, 505(b)(2) NDA, or supplement to an existing NDA if new clinical investigations, other than bioavailability studies, that
were conducted or sponsored by the applicant are deemed by the FDA to be essential to the approval of the application, for example, for
new indications, dosages or strengths of an existing drug. This three-year exclusivity covers only the new conditions of use and does
not prohibit the FDA from approving ANDAs for drugs for the original conditions of use, such as the originally approved indication. Five-year
and three-year exclusivity will not delay the submission or approval of a full NDA; however, an applicant submitting a full NDA would
be required to conduct or obtain a right of reference to all of the non-clinical studies and adequate and well-controlled clinical trials
necessary to demonstrate safety and effectiveness.

Post-Marketing
Requirements

Following
approval of a new product, a pharmaceutical company and the approved product are subject to continuing regulation by the FDA, including,
among other things, monitoring and recordkeeping activities, reporting to the applicable regulatory authorities of adverse experiences
with the product, providing the regulatory authorities with updated safety and efficacy information, product sampling and distribution
requirements, and complying with promotion and advertising requirements, which include, among others, standards for direct-to-consumer
advertising, restrictions on promoting drugs for uses or in patient populations that are not described in the drug’s approved labeling
(known as “off-label use”), limitations on industry-sponsored scientific and educational activities and requirements
for promotional activities involving the internet. Although physicians may prescribe legally available drugs for off-label uses, manufacturers
may not market or promote such off-label uses. Modifications or enhancements to the product or its labeling or changes of the site of
manufacture are often subject to the approval of the FDA and other regulators, who may or may not grant approval or may include in a
lengthy review process.

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Prescription
drug advertising is subject to federal, state, and foreign regulations. In the United States, the FDA regulates prescription drug promotion,
including direct-to-consumer advertising. Prescription drug promotional materials must be submitted to the FDA in conjunction with their
first use. Any distribution of prescription drug products and pharmaceutical samples must comply with the U.S. Prescription Drug Marketing
Act (“PDMA”), a part of the FDC Act. In addition, Title II of the Federal Drug Quality and Security Act of 2013, known
as the Drug Supply Chain Security Act or the DSCSA, has imposed new “track and trace” requirements on the distribution
of prescription drug products by manufacturers, distributors, and other entities in the drug supply chain. These requirements are being
phased in over a ten-year period. Unless the products were packaged prior to November 27, 2018, the DSCSA requires product identifiers
(i.e., serialization) on prescription drug products in order to establish an electronic interoperable prescription product system to
identify and trace certain prescription drugs distributed in the United States. The DSCSA replaced the prior drug “pedigree”
requirements under the PDMA and preempts existing state drug pedigree laws and regulations. The DSCSA also establishes requirements for
the licensing of wholesale distributors and third-party logistic providers. These licensing requirements preempt states from imposing
licensing requirements that are inconsistent with, less stringent than, directly related to, or otherwise encompassed by standards established
by FDA pursuant to the DSCSA. Until FDA promulgates regulations to address the DSCSA’s new national licensing standard, current
state licensing requirements typically remain in effect.

In
the United States, once a product is approved, its manufacture is subject to comprehensive and continuing regulation by the FDA. The
FDA regulations require that products be manufactured in specific facilities and in accordance with cGMP. cGMP regulations require among
other things, quality control and quality assurance as well as the corresponding maintenance of records and documentation and the obligation
to investigate and correct any deviations from cGMP. Drug manufacturers and other entities involved in the manufacture and distribution
of approved drugs are required to register their establishments with the FDA and certain state agencies and are subject to periodic unannounced
inspections by the FDA and certain state agencies for compliance with cGMP and other laws. Accordingly, manufacturers must continue to
expend time, money, and effort in the area of production and quality control to maintain cGMP compliance. These regulations also impose
certain organizational, procedural, and documentation requirements with respect to manufacturing and quality assurance activities. NDA
holders using contract manufacturers, laboratories, or packagers are responsible for the selection and monitoring of qualified firms,
and, in certain circumstances, qualified suppliers to these firms. These firms and, where applicable, their suppliers are subject to
inspections by the FDA at any time, and the discovery of violative conditions, including failure to conform to cGMP, could result in
enforcement actions that interrupt the operation of any such product or may result in restrictions on a product, manufacturer, or holder
of an approved NDA, including, among other things, recall or withdrawal of the product from the market.

The
CSA and DEA Regulation

Our
products are regulated as “controlled substances” as defined under the CSA and regulations promulgated by DEA. The
law and regulations establish registration, security, recordkeeping, reporting, storage, distribution, importation, exportation, and
other requirements administered by DEA.

Controlled
substances are classified into five schedules: Schedule I, II, III, IV, or V, depending on the abuse potential. Schedule I substances
by definition have no established medicinal use and may not be marketed or sold in the United States. A pharmaceutical product may be
listed as Schedule II, III, IV, or V, with Schedule II substances considered to present the highest risk of abuse and Schedule V substances
the lowest relative risk of abuse among such substances.

PF614
will be classified as a Schedule II controlled substance under the CSA and regulations because it contains oxycodone which is already
regulated as a Schedule II controlled substance. Consequently, the manufacturing, shipping, storing, selling, prescribing, and dispensing
of our products is subject to a high degree of regulation. Schedule II drugs are subject to the strictest requirements for registration,
security, recordkeeping, and reporting. Facilities must maintain complete and accurate inventories and records of all controlled substances
received, manufactured, stored, and distributed. These facilities must comply with strict security requirements to prevent diversion
of drugs in their possession. Also, distribution and dispensing of these drugs are highly regulated. For example, all Schedule II drug
prescriptions must be signed by a physician, presented to a pharmacist and generally limited to a 30-day supply, and may not be refilled,
that is, a new prescription is required.

Annual
registration is required for any facility that manufactures, distributes, imports, or exports any controlled substance. Also, practitioners
and pharmacies are required to register every three years. The registration is specific to the location, activity, and controlled substance
schedule. For example, separate registrations are needed for import and manufacturing, and each registration will specify which schedules
of controlled substances the facility is authorized to handle. Our contract manufacturers must be registered with DEA.

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In
addition, the CSA establishes an annual quota system that limits the manufacturing of API and dosage forms in the United States of Schedule
I and II controlled substances. First, the DEA establishes an annual aggregate quota for how much active opioid ingredients, such as
oxycodone and tapentadol, may be produced in total in the United States based on the DEA’s estimate of the quantity needed to meet
legitimate scientific and medicinal needs. The limited aggregate number of opioids that the DEA allows to be produced in the United States
each year is allocated among individual companies, who must submit applications annually to the DEA for individual production quotas.
Also, dosage form manufacturers must also request a procurement quota to acquire opioid API to manufacture dosage forms for distribution.
We and our contract manufacturers must receive an annual quota from the DEA in order to produce or procure any Schedule I or Schedule
II substance, including oxycodone base for use in manufacturing PF614. The DEA may adjust aggregate production quotas and individual
production and procurement quotas from time to time during the year. DEA has substantial discretion in whether or not to make such adjustments.
Our contract manufacturers must apply for and obtain the necessary quotas on an annual basis.

In
November 2017, the DEA reduced the amount of almost every Schedule II opiate and opioid medication that may be manufactured in the United
States in calendar year 2018 by 20%. In October 2018, the SUPPORT Act was enacted, which included amendments to the CSA to require that
appropriate quota reductions be made after estimating potential for diversion. DEA announced that the estimate is based on rates of overdose
deaths and abuse, the overall public health impact related to specific controlled substances and may include other factors as appropriate.
For 2019, the DEA proposed decreased manufacturing quotas for the six most frequently misused opioids, including oxycodone, by an average
of 10% as compared to the 2018 quotas. In October 2019, consistent with the SUPPORT Act, DEA proposed additional regulations to amend
the manner in which the agency grants quotas to manufacturers. The proposed regulations will establish use-specific quotas, including
commercial sales, product development, transfer, replacement, and packaging. To decrease the risk of diversion and increase accountability,
inventory allowances will be reduced, and procurement quota certifications will be required. The DEA proposed further decreasing manufacturing
quotas in 2020 for five of the six opioids (fentanyl, hydrocodone, hydromorphone, oxycodone, and oxymorphone), by an average of 28%.
For 2021, the DEA decreased the aggregate quota for oxycodone by about 13% and for hydrocodone by about 10% from the final established
2020 quotas. Because PF614 is regulated as a Schedule II controlled substance, it is subject to the DEA’s aggregate, individual
production, and procurement quota scheme.

Ordering
and distribution of any Schedule I or II controlled substance are also subject to special ordering requirements under either the electronic
Controlled Substance Ordering System (“CSOS”) or use of DEA Form 222s. Information regarding specific transactions
are reported to DEA, and cumulative reports of such transactions are required monthly/quarterly.

The
DEA also requires drug manufacturers to design and implement a system that identifies and reports suspicious orders of controlled substances.
Such orders include those of unusual size, those that deviate substantially from a normal pattern, and those of unusual frequency. Manufacturers
must refuse to complete any sale and report to DEA any orders for which it is unable to resolve any potential “red flags.”
A compliant suspicious order monitoring system includes well-defined due diligence, “know your customer” process as
well as systems to identify and monitor ordering and sales of controlled substances.

To
enforce these requirements, the DEA conducts periodic inspections of registered establishments that handle controlled substances. Failure
to maintain compliance with applicable requirements, especially security and recordkeeping and as manifested in loss or diversion or
inability to account for all controlled substances, can result in administrative, civil, or criminal enforcement action that could have
a material adverse effect on our business, results of operations, and financial condition. The DEA may seek civil penalties, refuse to
renew necessary registrations, or initiate administrative proceedings to revoke those registrations. The DEA may also reduce or deny
quota to manufacturing facilities based on non-compliance with these requirements. In certain circumstances, violations could result
in criminal proceedings.

Individual
states also independently regulate controlled substances.

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Legislative
and Regulatory Initiatives for Opioids

In
response to widespread prescription opioid abuse, the United States government and a number of state legislatures have enacted legislation
and regulations intended to fight the opioid epidemic. The number and scope of legislative and regulatory actions, particularly in the
last three years, emphasize the severity of the opioid epidemic and its impact on our society. The FDA has stated that addressing prescription
drug abuse is a priority and has reaffirmed that the development of abuse-deterrent opioids is a key part of that strategy.

Recent
actions to address the opioid abuse epidemic include:

●
FDA guidance: In April
2015, the FDA adopted final guidance regarding studies and clinical trials that should be conducted to demonstrate that a given formulation
has abuse-deterrent properties, how those studies and clinical trials will be evaluated, and what product labeling claims may be
approved based on the results of those studies and clinical trials. The guidance describes four categories of abuse-deterrence studies
and clinical trials: Categories 1, 2, and 3 consist of pre-marketing studies and clinical trials designed to evaluate a product candidate’s
potentially abuse-deterrent properties under controlled conditions, while Category 4, post-marketing clinical trials and studies,
assesses the real-world impact of abuse-deterrent formulations. The final guidance also provides examples of product label claims
that may be made based on the results of the corresponding studies and clinical trials.

●
FDA Opioids Action Plan:
In February 2016, the FDA released an action plan to address the opioid abuse epidemic and reassess the FDA’s approach to opioid
medications. The FDA’s plan is part of a broader initiative led by the U.S. Department of Health and Human Services (“HHS”),
to address opioid-related overdose, death, and dependence.

●
CDC Prescribing Guidelines:
In November 2022, the CDC released a new Guideline for Prescribing Opioids for Pain to update their 2016 Guidelines. The new guidance
includes recommendations for managing acute (duration of <1 month), subacute (duration of 1–3 months), and chronic (duration
of >3 months) pain. The guideline addresses the following four areas: 1) determining whether or not to initiate opioids for pain,
2) selecting opioids and determining opioid dosages, 3) deciding duration of initial opioid prescription and conducting follow-up,
and 4) assessing risk and addressing potential harms of opioid use.

●
FDA Drug Safety Communication:
In April 2023, the FDA issued a communication that in the ongoing effort to address the nation’s opioid crisis, it was making
several updates to the prescribing information of opioid pain medicines to provide additional guidance on their use. The changes
include label updates addressing addiction, abuse and misuse as well as life-threatening respiratory depression, accidental ingestion,
risks from concomitant use with other CNS depressants, neonatal withdrawal and opioid analgesic risk evaluation and mitigation strategy.

●
Enhanced Warnings and Safety
Labeling: In March 2016, the FDA announced required enhanced warnings for immediate-release opioid pain medications related to risks
of misuse, abuse, addiction, overdose, and death. Subsequently, there have been several class-wide labeling changes, including the
addition of boxed warnings relating to serious risks of using certain opioids medications along with benzodiazepines and other central
nervous system depressants, including alcohol (Decembers 2016); and additional information relating to the new class-wide REMS (Septembers
2018).

●
Enactment of the Comprehensive
Addiction and Recovery Act (“CARA”): In 2016, the CARA was enacted to address the national epidemics of prescription
opioid abuse and heroin use. Consistent with the initiatives of HHS, this legislation sought to, among other things, expand the availability
of naloxone for law enforcement and other first responders; form an interagency task force to develop best practices for pain management
with opioid medications; and provide resources to improve state monitoring of controlled substances, including opioids. In 2018,
CARA 2.0 was introduced as follow-up legislation to limit initial prescriptions for opioids to 3 days, while exempting initial prescriptions
for chronic care, cancer care, hospice or end of life care, and palliative care.

●
Enactment of the Substance
Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (“SUPPORT Act”):
In November 2018, the SUPPORT Act was enacted as a comprehensive legislative response to the continuing opioid epidemic. It includes
a number of measures directed towards regulation and improvement of treatment for substance use-disorder and increased coverage by
CMS of medically assisted treatment options. In addition, the SUPPORT Act requires HHS to report to Congress on existing barriers
to access to abuse-deterrent opioid formulations by Medicare Part C and D beneficiaries. It also includes a number of requirements
directed at reducing the potential for oversupply of opioids to reduce the potential for misuse and diversion.

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Properties

Our
principal executive office is located at 7946 Ivanhoe Ave., Suite 201 in La Jolla, California, where we lease a total of 850 square feet
of office space that we use for our administrative activities. All development activities are undertaken at contract research organizations.
The lease expires in October 2026. We believe that our current arrangements will be sufficient to meet our needs for the foreseeable
future, and that, should it be needed, suitable space will be available to accommodate our administrative activities.

Human
Capital Resources (Employees)

We
have eight full-time employees and two part-time employees. Of these, five have a Ph.D. From time to time, we also retain independent
contractors to support our organization. None of our employees are represented by a labor union or covered by collective bargaining agreements,
and we believe our relationship with our employees is good.