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Data readouts from SOTERIA are expected to provide guidance
and a clear pathway for each of the four indications towards potentially registrable trials. We believe there may also be an opportunity
to seek accelerated approval for CLN2 and CLN3 from the FDA based on precedent approval for a third-party drug with a similar trial design.
Products studied for their safety and effectiveness in treating serious or life-threatening diseases or conditions may receive accelerated
approval upon a determination that the product has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit,
or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict
an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of
the condition and the availability or lack of alternative treatments. As a condition of accelerated approval, the FDA will generally require
the sponsor to perform adequate and well-controlled post-marketing clinical studies to verify and describe the anticipated effect on irreversible
morbidity or mortality or other clinical benefit.

PLX-200 has already received authorization under two separate
INDs to initiate potentially single pivotal trials in CLN2 and CLN3, the most prevalent subtypes of NCLs, which we filed on December 20,
2019 and March 6, 2020 and received authorization for on January 17, 2020 and April 6, 2020. Initiation of these trials was delayed due
to the COVID-19 pandemic and a subsequent shift in our strategy. We currently do not expect to commence the trials in the near term while
we focus our resources on SOTERIA. To date, the FDA has granted three orphan drug designations (“ODD”) to PLX-200, for
the treatment of all 13 subtypes of NCLs, GM2 gangliosidoses, such as Tay-Sachs and Sandhoff diseases, and Krabbe disease. PLX-200 has
also received fast track (“Fast Track”) designation for the treatment of CLN2 (for SOTERIA) and CLN3 (for STARLIGHT). For
more information, see “Business — Government Regulation — Expedited Development and Review
Programs” below. The receipt of such designations does not guarantee a faster development process, regulatory review, or
approval as compared to the conventional FDA approval process.

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●
PLX-300 (cinnamic acid) is a novel, oral small molecule therapy in IND-enabling studies for the treatment of LSDs. PLX-300 is an unsaturated carboxylic acid that occurs naturally in several plants as a deaminated product of phenylalanine. To date, the FDA has granted three ODDs to PLX-300 for the treatment of GM2 gangliosidosis, Krabbe disease, and Niemann-Pick Disease (“NPD”) type A and type B. PLX-300 has also received rare pediatric drug designation (“RPD”) for the treatment of GM2 gangliosidosis, Krabbe disease, and NPD type A and type B. The receipt of such designations does not guarantee a faster development process, regulatory review, or approval as compared to the conventional FDA approval process.

●
PLX-100 is a preclinical stage orally administrable combination therapy comprised of our proliferator-activated receptor alpha (“PPARα”) agonist, PLX-200, and vitamin A, a retinoid X receptor alpha (“RXRα”) agonist. PLX-100 is being developed for the treatment of LSDs. To date, the FDA has granted one ODD to PLX-100 for the treatment of classic late infantile neuronal ceroid lipofuscinoses, or CLN2. The receipt of such designation does not guarantee a faster development process, regulatory review, or approval as compared to the conventional FDA approval process.

●
PLX-400 is a preclinical stage novel gene therapy being developed for the treatment of LSDs. We are exploring PLX-400 as a monotherapy or in combination with oral administration of PLX-200 and expect to determine any clinical development plans for PLX-400 at a later date.

LSDs are a heterogeneous group of nearly 50 inherited
rare, catastrophic, metabolic diseases caused by mutations in genes encoding lysosomal enzymes or associated proteins. These mutations
result in the accumulation of undegraded substrates within lysosomes, leading to cellular dysfunction, chronic inflammation, and cell
apoptosis. LSDs often manifest in infancy or early childhood and are associated with severe clinical outcomes, including developmental
regression, seizures, blindness, motor impairment, and premature death. We believe that there are approximately 50,000 LSD patients in
the United States, Europe and select regions of the rest of the world (“ROW”), assuming an incidence rate of one in 5,000
births.

The LSDs addressed by our pipeline of drug candidates
are currently treated for symptomatic relief and palliative care, and, with few exceptions, lack approved disease-modifying therapies.
Our drug candidates have been validated in gold standard preclinical animal models for CLN2, CLN3, Sandhoff disease, Krabbe disease and
NPD type A and type B. With similar broad disease pathology shared across multiple LSDs in terms of substrate accumulation, neuroinflammation,
and neuronal loss, we believe our small molecule drug candidates have the potential to demonstrate high therapeutic benefit in other targeted
indications.

Our development program is focused on a subset
of rare LSDs with particularly high unmet need, including:

●
Neuronal Ceroid Lipofuscinoses: A group of 13 genetically distinct subtypes categorized according to the associated gene (CLN1–8; CLN10–14), we believe that NCLs represent approximately 15% of the LSD population, roughly 7,700 patients in the United States, Europe and select regions of ROW. NCLs are characterized by progressive neurodegeneration, vision loss, and early mortality. The three most common forms of NCLs are CLN1, CLN2, and CLN3. Of the 13 NCL sub-types, only one, CLN2, has an established standard of care in the form of an enzyme replacement therapy.

●
Krabbe Disease: Krabbe disease, also known as globoid cell leukodystrophy, is caused by mutations in the galactosylceramidase (“GALC”) gene, leading to GALC deficiency and an inability to break down certain lipids in the body. This results in accumulation of toxic substances in the brain and other areas of the nervous system leading to demyelination and severe neurological decline. The incidence rate of Krabbe disease varies significantly, affecting 0.3 to 2.6 per 100,000 live births. We believe that there are approximately 6,700 Krabbe disease patients in the United States, Europe and select regions of the ROW. Hematopoietic stem cell transplantation (“HSCT”) is considered the current standard of care.

2

●
Tay-Sachs and Sandhoff Diseases: Tay-Sachs and Sandhoff Diseases are part of a group of inherited disorders called GM2 gangliosidoses, resulting from deficiencies in the hexosaminidase enzyme. This mutation leads to an accumulation of GM2 ganglioside in nerve cells, resulting in rapid neurodegeneration. While the prevalence of Tay-Sachs disease is approximately one in 100,000 births, Sandhoff Disease is much rarer with a prevalence of approximately 0.67 per 100,000 births. We believe that there are approximately 1,200 Sandhoff disease patients in the United States, Europe and select regions of the ROW. There is currently no established standard of care for these diseases.

●
Niemann-Pick Disease Types A and B: NPD is caused by mutations in the sphingomyelin phosphodiesterase 1 (“SMPD1”) gene. This causes acid sphingomyelinase enzyme deficiency, leading to lipid accumulation in multiple organs, including the brain. The prevalence for NPD types A and B is one in 250,000 births, with a high prevalence found within the Ashkenazi Jewish population. An enzyme replacement therapy has been approved for the treatment of NPD type A and type B, but is not intended to treat neurological symptoms.

Our Pipeline

Our therapeutic pipeline includes PLX-200, PLX-300,
and PLX-100, which are orally available small molecule drug candidates designed to address core pathological mechanisms common to LSDs.
With shared modes of action involving transcription factor EB (“TFEB”) activation leading to increased lysosomal biogenesis
and autophagy, decreased neuroinflammation, and decreased neuronal loss, our small molecule therapies possess the potential to benefit
multiple indications within the LSD spectrum. However, if PLX-200 encounters safety or efficacy problems, manufacturing or supply interruptions,
developmental delays, regulatory issues or other problems, its development plans and business related to those other indications for PLX-200
as well as PLX-300 and PLX-100 could be significantly harmed. See the risk factor entitled “We are substantially dependent
on the success of our most advanced drug candidate, PLX-200, and our clinical trials of PLX-200 may not be successful.”

Our pipeline also includes PLX-400, a preclinical
gene therapy program. Our multi-modal approach positions us to potentially address both the genetic and downstream pathological features
of LSDs.

Figure 1. Our Lead Clinical Stage Program

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Our Small Molecule Pipeline Demonstrates Multiple Critical Modes
of Action

Our small molecule pipeline is represented by PLX-200,
PLX-300, and PLX-100, all of which exert their therapeutic effects through a constellation of complementary modes of action, each of which
is relevant to the pathophysiology of NCLs and other LSDs. All of our small molecule drug candidates in the portfolio work through a common
mechanism of action which involves PPARα-dependent upregulation of TFEB. As a master regulator of lysosomal biogenesis, TFEB
translocates to the nucleus and binds to the promoter regions of lysosomal and autophagy-related genes, initiating their transcription
and enhancing lysosomal function.

As demonstrated in well-established animal models
that closely mimic the human disease, our drug candidates exhibit the potential for therapeutic value via the following modes of action:

●
Lysosomal Biogenesis: LSDs are characterized by deficiency in lysosomal function. Our small molecule drug candidates, including our most advanced drug candidate PLX-200, have demonstrated the ability to upregulate the abundance and activity of lysosomes and related autophagy of cellular waste through TFEB-mediated lysosomal biogenesis and clearance of accumulated substrates, enhancing cellular homeostasis.

●
Reduction in Neural Inflammation: Our small molecules, including PLX-200, demonstrated PPARα-driven suppression of neuroinflammation caused by microglial and astroglial activation, mitigating secondary damage associated with lysosomal dysfunction.

●
Neuronal Support: PLX-200 and our other small molecule drug candidates mediate neuronal survival, which promotes resilience in vulnerable neuronal populations through PI3K pathway activation and contributes to anti-apoptotic signaling and neuroprotection.

Collectively, these mechanisms target multiple
nodes in the pathological cascade of LSDs, offering a multi-pronged therapeutic strategy. We believe that our lead drug candidate, PLX-200,
with a noninvasive and dose-controlled administration could potentially position our drug to become the standard of care in multiple LSDs. The
integrated impact of these pathways across disease stages is illustrated in Figure 2. Should PLX-200 fail to achieve positive results,
our small molecule portfolio’s sharing of modes of action and targeted indications increases risks related to PLX-100 and PLX-300’s
development and prospects for regulatory approval in similar indications.

Figure 2. Our Small Molecule Drug Candidates
Demonstrate Multiple Modes of Action

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Our History and Our People

We were founded in August 2014 as a Wyoming
corporation and completed the Redomestication to convert into a Nevada corporation on October 24, 2025. Since our inception through the
date of this Annual Report, we have raised $21.7 million supported by institutional and private investors.

We have assembled an executive team with deep experience
advancing private and publicly-listed clinical-stage and commercial-stage companies. Our leadership brings a proven track record in designing
and executing patient-centric drug development programs and clinical trials, particularly in the rare and orphan disease space.

Our senior management team is supported by an experienced
team of professionals who manage our current operations and is expected to continue to provide these mission-critical services. To maximize
efficiency and control cost, we signed the Services Agreement (“Service Agreement”) in November 2021 with our controlling
stockholder, Mstone Partners Healthcare Limited (together with its affiliates, “Mstone”), to receive critical consulting
and advisory services. Mstone is a Hong Kong-based biotechnology, healthcare, and AI incubator structured as a holding company. Mstone
manages a portfolio of seven companies and has a record of advancing early-to late-stage rare, neurological and pediatric life science
ventures. Mstone also has experience in managing strategic exits, including the sale of Epygenix Therapeutics, Inc., a rare pediatric
biopharmaceutical portfolio company to Nasdaq-listed Harmony Biosciences Holdings, Inc. in a transaction valued at up to $680 million.

A team of eleven Mstone professionals, many with
advanced degrees and experience in small-molecule drug discovery and clinical development in rare orphan indications, provide comprehensive
operational support across key functions, including: preclinical and clinical development; regulatory engagement; scientific and medical
affairs; business development, licensing, and strategic partnerships; intellectual property management; and investor relations and capital
markets engagement.

Our Strategy

Our objective is to establish a leading position
globally in the research, development, and commercialization of disease-modifying therapies targeting LSDs, which represent a significant
and largely unaddressed global medical need. To this end, we intend to strategically leverage the expertise of our executive leadership
and external collaborators to advance the development of therapeutic candidates that are safe, effective, and patient-friendly.

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To advance this mission, we intend to pursue the
following strategic initiatives:

●
Advance the development of PLX-200 through SOTERIA, a clinical trial designed to be flexible, resource-efficient, and provide important data and information important to PLX-200’s future clinical development. We intend to prioritize the clinical development of PLX-200, our lead drug candidate, through the initiation of SOTERIA. We submitted an IND application to the FDA for the SOTERIA trial in August 2025 and received a safe to proceed letter in October 2025. We anticipate that SOTERIA will initiate in the second half of 2026. SOTERIA is a Phase 2, open-label trial intended to assess the safety, tolerability, and clinical activity of PLX-200 in CLN2, CLN3, Krabbe disease, and Sandhoff disease, four different LSDs whose patient populations we believe represent approximately one quarter of the LSD population. Designed with a high degree of flexibility, SOTERIA represents a resource-efficient opportunity to validate PLX-200’s preclinical science across multiple LSDs while gathering data that we believe will be invaluable in planning PLX-200’s future development pathway, including the initiation of potentially pivotal trials. For the CLN2 and CLN3, cohorts although the entire trial is open label, these cohorts will incorporate analyses comparing natural history data as a control arm to PLX-200’s treated arm. A natural history study is a preplanned observational study intended to track the course of the disease. Should the data demonstrate compelling clinical activity, we may seek conditional marketing authorization.

●
Advance potentially single pivotal trials in CLN2 and CLN3. We intend to optimize the design of our potentially single pivotal clinical trials for PLX-200 in the CLN2 and CLN3 subtypes of NCLs, which represent the largest patient populations among the 13 known NCL subtypes. PLX-200 has received authorization under two separate INDs to initiate these trials in CLN2 and CLN3, which may serve as registrational studies later, which we filed on December 20, 2019 and March 6, 2020 and received authorization for on January 17, 2020 and April 6, 2020. Initiation of these trials was delayed due to the COVID-19 pandemic and a subsequent shift in our strategy. We currently do not expect to commence the trials in the near term while we focus our resources on SOTERIA. Our management team plans to focus on maximizing operational efficiency with respect to time, cost, and resource allocation. We intend to align CLN2 and CLN3 trial timelines with emerging data from SOTERIA as data readouts from SOTERIA are expected to provide guidance and a clear pathway for each of the four indications towards potentially registrable trials, including CLN2, CLN3, Krabbe disease and Sandhoff disease.

●
Pursue approval for PLX-200 through the 505(b)(2) regulatory pathway while strengthening PLX-200’s competitive positioning. In our Type B, pre-IND meeting with the FDA for our CLN2 trial held on June 16, 2017, the FDA indicated that the 505(b)(2) application is the appropriate marketing application to use for PLX-200. The 505(b)(2) pathway is a streamlined FDA drug approval process that allows the use of existing data. This pathway is covered by section 505(b)(2) of the Federal Food, Drug, and Cosmetic Act. While a drug seeking 505(b)(2) New Drug Approval requires full reports of investigations of safety and effectiveness, 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. Such information may include an FDA finding of safety or effectiveness of a listed drug, clinical data produced by other entities, or published literature. By utilizing the 505(b)(2) pathway as indicated in our IND correspondences, we expect that PLX-200 will benefit from an accelerated clinical development pathway that leverages gemfibrozil’s existing safety record as an approved drug and reduces development time and cost. Because gemfibrozil has never been approved for pediatric patients and the only approved dosage forms of gemfibrozil are oral capsules and tablets solely for administration to adult patients, we have completed juvenile toxicity studies to identify and establish an optimal pediatric dosing regimen, which is required for PLX-200 to be the first-to-market as a commercial form of gemfibrozil approved for pediatric patients. We have further differentiated PLX-200 from its approved form through a novel alternative oral solution formulation with a unique and proprietary buffer system. The physical and chemical properties of gemfibrozil make it challenging to formulate the drug product as an oral solution. Grinding commercially available gemfibrozil tablets for reconstitution in aqueous solution is unsuitable for pediatric administration due to poor content uniformity and resultant inaccurate dosing. Our development of a pediatric patient-friendly oral solution formulation is critical for compliance purposes given decreased swallowing function in pediatric patients suffering from NCLs and is essential to determining appropriate doses for safety and efficacy by using a weight-based titration scheme. We expect to continue to refine our proprietary oral formulation of PLX-200 to ensure suitability for pediatric administration and patient compliance with a focus on increasing the concentration of gemfibrozil oral solution and enhancing dose control with minimal volume intake. As part of the 505(b)(2) submission pathway, we expect to be able to rely on referenced studies instead of engaging in a new Phase 1 study. The referenced studies may include published safety studies, juvenile animal studies, publicly available information that is scientifically relevant to the PLX-200 program including the LOPID package insert, bridging studies and/or comparative bioavailability data. For more information regarding the 505(b)(2) regulatory pathway, see “Business — Government Regulation — 505(b)(2) New Drug Applications”.

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●
Further develop our pipeline and expand our targeted indications. While PLX-200 is our most advanced drug candidate, we intend to broaden our development efforts across our pipeline candidates, including our preclinical gene therapy candidate, and study those candidates across an expanded slate of LSDs characterized by high unmet medical need. Our preclinical studies have been conducted in well established, validated animal models representing these single gene mutations and, more importantly, they closely mimic the human disease. Our multi-modal pipeline offers the prospect of addressing the genetic and downstream pathological features of select LSDs by increasing clinical flexibility and enhancing our likelihood of therapeutic success. The three drug candidates in our small molecule portfolio possess similar mechanisms, such as storage material degradation, reduction in inflammation, and increased protection of neurons, that address key LSD disease processes and uniquely provide us with the potential to become the standard of care for multiple rare, orphan and pediatric LSDs.

●
Expand and protect our intellectual property portfolio. We will continue to expand and vigorously defend our global intellectual property portfolio to safeguard our proprietary technologies and therapeutic assets across key jurisdictions.

Disease and Industry Background

Lysosomes are ubiquitous membrane-enclosed organelles
in the body that are integral for major cellular processes, such as waste management and nutritional responses. The diverse functionality
of this single organelle requires a complex and coordinated regulation of its activity with the transcription factor TFEB, a key regulator
of lysosomal biogenesis. Defects in lysosomal genes and associated gene products (enzymes and other proteins) can result in accumulation
of toxic waste materials within the cells.

LSDs are a heterogeneous group of nearly 50 inherited
metabolic diseases caused by mutations in genes encoding lysosomal enzymes or associated proteins. These mutations result in the accumulation
of undegraded substrates within lysosomes, leading to cellular dysfunction, chronic inflammation, and cell apoptosis. LSDs often manifest
in infancy or early childhood and are associated with severe debilitating clinical outcomes, including developmental regression, seizures,
blindness, motor impairment, and premature death. These disorders are typically treated for symptomatic relief and palliative care and,
with the exception of CLN2, lack approved disease-modifying therapies.

We believe that there are approximately 50,000
LSD patients in the United States, Europe and select regions of ROW, based on an incidence rate of one in 5,000 births. Of the broader
universe of LSDs, we are focused on developing therapies for NCLs, of which there are 13 subtypes; Krabbe disease; Tay-Sachs and Sandhoff
diseases; and NPD type A and type B diseases. Virtually all of the LSDs on which we focus lack patient-friendly, disease-modifying therapies
and are characterized by devastating symptoms such as developmental delays, neurodegeneration, blindness, seizures, and early death.

Neuronal Ceroid Lipofuscinoses

NCLs are a heterogeneous group of 13 LSDs generally
characterized by the excessive accumulation of lipofuscin. Lipofuscins are made up of fats and proteins, and they are found inside cellular
lysosomes of the brain and the eye as well as in skin, muscle, and many other tissues. The cellular accumulation of lipofuscin results
in lysosomal dysfunction and causes devastating neurodegeneration.

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Despite being genetically heterogeneous, NCLs share
similar histopathological and clinical characteristics and clinical manifestations of NCLs include progressive mental deterioration, cognitive
impairment, visual failure, seizures, and deteriorating motor function, accompanied by histological findings such as the accumulation
of auto-fluorescent storage material in neurons or other cell types.

NCLs arise from genetic mutations within one of
13 different genes from CLN1-8 and CLN10-14. The three most common forms of NCLs are CLN1, CLN2, and CLN3. We believe that NCLs represent
approximately 15% of the LSD population, or roughly 7,700 patients. Of the 13 NCL sub-types, only CLN2 has an established standard of
care.

Our current areas of disease focus within NCLs
include:

●
CLN2 Disease

CLN2 disease, also known as late infantile neuronal ceroid
lipofuscinosis (“LINCL”), is associated with mutations in the CLN2 gene, which encodes lysosomal tripeptidyl-tripeptidase I
(“TPP1”), a 46-kDa protein that functions in the acidic environment of the lysosomal compartment to remove tripeptides from
the amino terminus of proteins. This mutation in the CLN2 gene results in a deficiency and/or loss of function of the TPP1 protein that
leads to intralysosomal accumulation of auto-fluorescent lipopigments known as ceroid-lipofuscin.

Globally, the classical form of CLN2 disease has a prevalence
of 0.6 to 0.7 per million inhabitants. CLN2 is a rare neurodegenerative genetic disease that affects children in early life. Its classic
form is rapidly progressive and the most common clinical manifestations in CLN2 disease at disease onset include unprovoked seizures and
ataxia, leading to death within the first ten years. The average age at diagnosis is four years old, and by the age of six years,
most children are completely dependent on caregivers for all of their daily needs. Life expectancy ranges from eight to 12 years.

●
CLN3 Disease

CLN3 disease, also known as juvenile neuronal ceroid lipofuscinosis
(“JNCL”) or juvenile Batten disease, is a rare inherited LSD that primarily affects the nervous system in childhood. With
a prevalence of one in 100,000 births worldwide, CLN3 disease is caused by mutations in the CLN3 gene which encodes a lysosomal transmembrane
protein, Battenin. The most common genetic defect is a ~1-kb deletion in CLN3, leading to a loss of protein function. The disorder follows
an autosomal recessive inheritance pattern, requiring two defective copies of CLN3 for disease manifestation. Due to impaired lysosomal
function, neurons accumulate waste material and progressively deteriorate, resulting in a neurodegenerative disease course.

Several subtypes of CLN3 disease exist, varying in age. CLN3
typically manifests between the ages of four and eight years, with the first symptom usually being progressive vision loss due to
retinal degeneration. For late and protracted CLN3, patients may face a slower disease progression and delayed onset of symptoms. Seizures,
progressive neurological deterioration, and severe motor and cognitive decline continue to develop during the course of the disease, with
death occurring in the second decade of life.

Tay-Sachs and Sandhoff Diseases

Tay-Sachs and Sandhoff disease are the two most
common types of GM2 gangliosidosis, a group of inherited LSDs. There is currently no established standard of care. Tay-Sachs and Sandhoff
diseases are both rare autosomal recessive LSDs caused by a mutation in either the HEXA gene for Tay-Sachs disease or the HEXB gene for
Sandhoff disease. This mutation results in a deficiency of a functional HEXA enzyme, while Sandhoff disease results in deficiencies of
both HEXA and HEXB enzymes due to the role of the HEXB gene. While the prevalence of Tay-Sachs disease is approximately one in 100,000
births, Sandhoff Disease is much rarer with a prevalence of approximately 0.67 per 100,000 births. We believe that there are approximately
1,200 Sandhoff disease patients in the United States, Europe and select regions of the ROW.

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Tay-Sachs disease is caused by mutations in the
HEXA gene, which disrupt the function of β-hexosaminidase A enzyme. This deficiency leads to the accumulation of GM2 gangliosides
in neurons, causing progressive neurodegeneration. Several subtypes of Tay-Sachs disease exist: infantile, juvenile, and adult-onset,
with infantile Tay-Sachs disease being the most severe. Symptom onsets begin within the first six months of life, with symptoms such
as motor weakness, developmental delay, and the hallmark “cherry-red spot” visible in the retina. Compared to the infantile
variant, the juvenile and adult-onset forms of the disease progress more slowly and may present psychiatric symptoms during adulthood.
Infantile Tay-Sachs patients experience an aggressive loss of motor function and vision as the disease progresses, often succumbing by
the age of four or five. For other variants, progressive neurological deterioration will eventually transition patients into a vegetative
state, with death occurring by the age of 10 to 15.

Sandhoff disease, a more severe form of Tay-Sachs
disease, is caused by mutations in the HEXB gene, which impair the function of β-hexosaminidase enzymes. This deficiency causes the
accumulation of GM2 gangliosides in neurons, resulting in progressive neurodegeneration. Several subtypes of Sandhoff disease exist, varying
depending on the age of onset. The infantile form typically manifests between three and six months of age and is the most severe.
The first symptom is often hypotonia, accompanied by an exaggerated startle response to auditory stimuli, followed by developmental regression.
Acute infantile and sub-acute juvenile Sandhoff disease patients begin regressing significantly after the onset of symptoms, with death
usually occurring between two and three years for the infantile cohort and early to late teens for the juvenile cohort. Life expectancy
for late-onset Sandhoff patients is not significantly impacted.

Krabbe Disease

Krabbe disease, also known as globoid cell leukodystrophy,
is caused by mutations in the GALC gene, encoding galactosylceramidase, an enzyme critical for breaking down galactolipids in myelin.
Deficiency in galactosylceramidase leads to the toxic accumulation of psychosine, resulting in widespread demyelination and neurodegeneration
in the central and peripheral nervous systems. The incidence rate of Krabbe disease varies significantly, affecting 0.3 to 2.6 per 100,000
live births. We believe that there are approximately 6,700 Krabbe disease patients in the United States, Europe and select regions of
the ROW. Krabbe disease is categorized into four subtypes based on age of symptom onset. Classic infantile form has the earliest onset,
typically at birth to six months, and is the most severe. Late infantile form, with an onset of six months to three years,
has slightly slower progression but early loss of motor and cognitive functions. Juvenile form, with onset between three to 16 years,
presents with gait abnormalities, motor decline, and vision loss. Adult form, with onset over the age of 16, presents with progressive
weakness, cognitive decline, and psychiatric symptoms, with variable life expectancy. HSCT is considered the current standard of care.

Niemann-Pick disease

NPD, also known as acid sphingomyelinase deficiency,
is a rare and catastrophic pediatric neurodegenerative lipid metabolism disorder caused by genetic mutations in acidic sphingomyelinase
(“ASMase”), an enzyme found in lysosomes and important in the degradation of sphingomyelin or proteins involved in lipid transport.
It is characterized by progressive cerebellar ataxia and dementia. Based on the genetic origin and the signs and symptoms of this rare
condition, NPD is divided into four subtypes: types A, B, C1, and C2. We are focused on NPD types A and B, which are caused by mutations
in the SMPD1 gene encoding ASMase. The prevalence for NPD types A and B is one in 250,000 births, with a high prevalence found within
the Ashkenazi Jewish population. An enzyme replacement therapy has been approved for the treatment of NPD type A and type B, but is not
intended to treat neurological symptoms.

Children with NPD type A exhibit hepatosplenomegaly
and profound central nervous system (“CNS”) deficits in infancy. These patients rarely survive beyond two to three years
of age. Patients with NPD type B also have hepatosplenomegaly and significant lung pathology, but there are usually no CNS deficits. The
age of onset and rate of disease progression vary greatly among patients with NPD type B. Although patients with NPD type B may live
into adulthood, some patients can develop significant life-threatening complications.

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Our Drug Candidates

Our small molecule drug candidates, PLX-200, PLX-300,
and PLX-100, exert therapeutic effects through multiple modes of action demonstrated in all three compounds, which have unique relevance
for the treatment of NCLs as well as other LSDs.

These modes of action include:

●
PPARα/TFEB-mediated lysosomal biogenesis and removal of storage materials,

●
PPARα/TFEB-mediated suppression of inflammation, and

●
PPARα/TFEB mediated neuronal survival and PI3Kinase mediated protection and anti-apoptosis.

The critical mechanism of action is PPARα-dependent
upregulation of TFEB. As a master regulator of lysosomal biogenesis, the subsequent TFEB binding to the promoter region of genes
involved in lysosomal biogenesis activates their production. Together, these mechanisms affect LSDs along important points of the disease
process as shown in Figure 2. With mechanisms that address key pathophysiological characteristics, we believe our drug candidates possess
the potential to become the standard of care in multiple rare, orphan, and pediatric LSDs. Should PLX-200 fail to achieve positive results,
our small molecule portfolio’s sharing of modes of action and targeted indications increases risks related to PLX-100 and PLX-300’s
development and prospects for regulatory approval in similar indications.

Figure 2. Illustration of PLX Candidates’
Multiple Modes of Action

PLX-200

Description

Our lead drug candidate, PLX-200, is a liquid orally
available compound comprised of gemfibrozil. Gemfibrozil is an FDA-approved lipid regulating agent in the fibrate family which has only
been approved in a capsule form for adult patients with very high elevations of serum triglyceride levels to decrease serum triglycerides
and very low-density lipoprotein cholesterol and increase high density lipoprotein cholesterol. The ability of gemfibrozil to cross the
blood-brain barrier (“BBB”) has also been documented in third-party preclinical trials and safe use of gemfibrozil in adults
has also been well-established over several decades of clinical investigation and commercial use, which we believe accelerates clinical
development and reduces associated costs. Although pediatric patients have been treated with gemfibrozil through small studies across
several pediatric indications, including CLN2, gemfibrozil has never been approved to treat any indications in pediatric patients. We
believe the unique ability of PLX-200 to cross the BBB, along with its widely applicable mechanism of action, positions PLX-200 to potentially
address the immense unmet need in multiple rare, catastrophic LSD indications.

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We are pursuing PLX-200 through the 505(b)(2) regulatory
pathway as a repurposed drug. In our Type B, pre-IND meeting with the FDA for our CLN2 trial held on June 16, 2017, the FDA indicated
that the 505(b)(2) application is the appropriate marketing application to use for PLX-200. We expect this guidance will apply to all
of our product candidates since all of our planned studies have cross-referenced the CLN2 study and each product candidate shares the
same dosage form as PLX-200. For more information regarding the 505(b)(2) regulatory pathway, see “Business — Government
Regulation — 505(b)(2) New Drug Applications”. The therapeutic potential of PLX-200 in neurodegenerative
disorders was identified by Dr. Kalipada Pahan, the scientist behind our therapeutic pipeline and a member of our Scientific and
Clinical Advisory Board. Dr. Pahan has worked extensively on the science of peroxisome proliferator-activated receptors for more
than three decades. To pursue his interest in neurodegenerative disorders and neuroinflammation, Dr. Pahan studied and evaluated
a long list of PPARα agonists and discovered that gemfibrozil maintains a superior safety profile among other fibrates.

We believe PLX-200 is clearly differentiated as
a potential disease-modifying therapy with patient-friendly characteristics as demonstrated in our animal studies and anecdotal evidence
through anecdotal off-label use in CLN2 patients. As an orally administered, small molecule drug candidate with multiple modes of action,
we believe that PLX-200 possesses the potential to gain leadership in the treatment of multiple NCLs. Unlike enzyme replacement therapies,
which are limited to treating a specific disorder by replacing a deficient or missing enzyme, PLX-200 possesses the prospect of treating
multiple indications due to its multiple modes of action.

Patient-friendly administration is a further point
of differentiation as patients with NCLs commonly suffer from decreased swallowing function. Currently, the only form of gemfibrozil is
an oral tablet. There are limitations on the use of grounded oral tablets for pediatric administration in patients with NCLs given the
hydrophobic physicochemical properties of gemfibrozil. Our development of a patient-friendly oral solution for PLX-200 is designed to
overcome these challenging properties and enhance patient compliance, while providing accurate pediatric dosing in a home environment.
We continue to further optimize our proprietary oral solution by, among other things, increasing gemfibrozil concentration, and aim to
further deepen patient adherence by lowering administered volumes. In comparison, BRINEURA® (cerliponase alfa), an enzyme
replacement therapy and the only available standard of care for patients with CLN2, requires a regularly scheduled intracerebroventricular
administration injected in a hospital environment. In addition, the administration of cerliponase alfa has also been associated with device-related
complications, including infections, leakage, and an increased white-cell count in cerebrospinal fluid.

To date, the FDA has granted three ODD to PLX-200
for the treatment of all 13 sub-types of NCLs, Tay-Sachs and Sandhoff diseases, and Krabbe disease. PLX-200 has also received Fast Track
designation for the treatment of CLN3. The receipt of such designations does not guarantee a faster development process, regulatory review,
or approval as compared to the conventional FDA approval process.

PLX-200 Mechanism of Action

PLX-200 is a potent activator of PPARα, which
promotes the expression of TFEB genes. TFEB is a master regulator of CLN1, CLN2, and CLN3, and is known to be involved in coordinated
regulation of several lysosomal genes via CLEAR elements leading to lysosomal biogenesis, improving the cellular clearance of accumulated
storage materials in neurodegenerative diseases.

PLX-200 also promotes anti-inflammatory gene expression
to facilitate reduction of inflammation. Our compounds activate PPARα, which also promote the transcription of anti-inflammatory
genes such as IL-1Ra and SOSC3. Since neuroinflammation accelerates neuronal loss in LSDs, reducing inflammation may protect neurons and
prolong survival.

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PLX-200 Preclinical Data Summary

We have evaluated the tolerability and clinical
activity of PLX-200 in proof-of-concept preclinical models that support PLX-200’s therapeutic potential to address multiple LSDs,
including CLN2, CLN3, Krabbe, and Sandhoff Diseases. Our preclinical studies in well-established mouse models that closely mirror clinical
phenotypes suggest that PLX-200 has the potential to be a well-tolerated and disease-modifying drug. In all animal models, PLX-200 has
been demonstrated to upregulate the deficient gene function associated with the human disease, attenuate neuroinflammation, suppresses
apoptosis, and improve neuronal survival.

CLN3

We believe that PLX-200 has the potential to address
unmet needs in CLN3 disease. In our preclinical studies, PLX-200 was shown to activate PPARα and stimulate TFEB, a key regulator
of lysosomal biogenesis and autophagy, improving cellular clearance and reducing the toxic accumulation of storage materials containing
subunit c of mitochondrial ATP synthase (“SCMAS”) (Figure 3). In our in vivo studies with the CLN3∆ex7/8
animal model, activation of PPARα by PLX-200 suppressed the activation of microglia and astroglia and reduced the level of
proinflammatory molecule inducible nitric oxide synthase (“iNOS”) (Figure 4). Chronic neuroinflammation contributes to disease
progression in CLN3. PLX-200 mediated reduction in neuroinflammation protected neurons from further cell death and slowed down disease
progression.

Figure 3. Effect of PLX-200 on TFEB and Storage
Material Levels in CLN3 Mice Model

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Figure 4. PLX-200 Reduces Glial Activation and
Neuroinflammation in CLN3 Mice Model

In the gold standard mouse model of CLN3 (CLN3ΔJNCL
mouse model), PLX-200 improved locomotor activity and motor coordination (Figure 5), suggesting potential benefits in preserving neuronal
function and delaying disease progression. By activating PPARα, upregulating TFEB, reducing neuroinflammation, enhancing lysosomal
function, protecting neurons and slowing down disease progression, we believe PLX-200 shows promise as a therapeutic candidate for CLN3.

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Figure 5. Effect of PLX-200 in Improving Locomotor
Activity

CLN2

We believe that PLX-200, as a PPARα agonist,
also has high therapeutic importance for CLN2 and we are targeting to address some of the limitations of current therapies. We have completed
preclinical studies using CLN2 mouse and human primary astrocytes. In these studies, CLN2-/- mice treated with PLX-200 have
been shown to reduce the accumulation of storage materials, quantified by SCMAS positive immunofluorescence (Figure 6).

Figure 6. PLX-200 Reduces Buildup of Storage
Materials

In a mouse model of LINCL (CLN2-/- model),
PLX-200 has been demonstrated to upregulate levels of antiapoptotic phosphorylated BCL2-associated Death Protein (“pBAD”)
in the striatum and motor cortex, leading to BCL-2 mediated suppression of apoptosis and reduction of neuronal death (Figure 7). The activation
of PI3K has been documented to phosphorylate BAD via Akt. Through PI3K-pBAD pathway, PLX-200 suppresses apoptosis in the CNS of CLN2-/-
mice. In the same preclinical study, treatment with PLX-200 has also been shown to improve locomotor activities (Figure 8).

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Figure 7. PLX-200 Suppresses Apoptosis Through
Activation of PI3K-pBAD Pathway

Figure 8: Treatment with PLX-200 Improves Locomotor
Activities

Human primary astrocytes were treated with 25µm
PLX-200 for 24 hours under similar culture conditions and were double-labeled for TPP1 (red) and glial fibrillary acidic protein
(“GFAP”) (green) (Figure 9 (G)). SH-SY5Y cells were treated with 25µm PLX-200 in B27-AO containing Neurobasal media
for 24 h and were double-labeled for TPP1 (red) and β-tubulin (green) (Figure 9 (H)).

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Figure 9. PLX-200 Upregulation of TPP1 via PPARα

By activating PPARα, upregulating TPP1, promoting
lysosomal biogenesis, and reducing neuroinflammation, PLX-200 has shown to mitigate the pathological accumulation of undigested proteins
in CLN2 neurons of animal model studies.

Krabbe Disease

In Krabbe Disease, increase in myelination in the
CNS has therapeutic importance. In our preclinical studies, PLX-200 has been demonstrated to restore myelin in cerebellum and corpus callosum
of GALC-/- animal model. Oral administration of PLX-200 increased the level of myelin basic protein (“MBP”) and
proteolipid protein (“PLP”), which are markers for myelin, in both cerebellum and corpus callosum of GALC-/- mice
(Figure 10). PLX-200 has also been shown to attenuate glial activation by reducing GFAP and iNOS levels, a hallmark of neurodegenerative
diseases, resulting in reduced inflammation (Figure 11). Treatment with PLX-200 has also exhibited significant improvement in hypolocomotion
and increased longevity of GALC-/- mice by 11-13 days (Figure 12).

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Figure 10. PLX-200 Increases MBP and PLP Levels
in the Brain

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Figure 11. PLX-200 Decreases GFAP and iNOS Levels

Figure 12. PLX-200 Increases Life Span in GALC-deficient
Mice

Tay-Sachs and Sandhoff Diseases

We have conducted preclinical studies to determine
the therapeutic potential of PLX-200 for GM2 gangliosidoses, such as Sandhoff Disease. In GM2 gangliosidosis, the accumulation of undegraded
ganglioside is directly linked to the activation of microglial cells, triggering apoptosis and contributing to the disease progression.
In our preclinical studies, oral treatment of PLX-200 at 8 mg/kg/day dose has been demonstrated to attenuate neuronal apoptosis and
reduce glycoconjugates (magenta stained), a hallmark of GM2 gangliosides (Figure 13; Figure 14).

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Figure 13. PLX-200 Lowers Storage Materials

Figure 14. PLX-200 Reduces TUNEL Positive Cells
and PAS Positive Granules

In the same study, widely dispersed swollen dystrophic
axons, neurites, and spheroids were observed in various tissues, along with severe vacuolation. These pathological findings were markedly
reduced after treatment with PLX-200 (Figure 15). PLX-200 has also been shown to reduce iNOS and GFAP levels (Figure 16), a hallmark of
inflammation in neurodegenerative disorders, including Sandhoff disease.

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Figure 15. PLX-200 Preserves Neuronal Function
and Structure

Figure 16. PLX-200 Reduces iNOS and GFAP Levels

Juvenile Toxicology Study (Covance)

We have completed juvenile rate pharmacokinetic
(“PK”) and toxicology studies with PLX-200. In this in vivo study using Sprague-Dawley rats, doses of 0, 100, 300,
and 1000/600 mg/kg/day of PLX-200 were administered via oral gavage from postnatal day 21 to 105. Based on the findings of repeated-dose
toxicity studies, the no observed adverse effect level was identified. Estimated corresponding pediatric doses are calculated based on
weight tiers. Assessment of toxicity was based on mortality, clinical observations, body weights, food consumption, ophthalmic examinations,
neurobehavioral assessments, gross pathology, organ weights, and microscopic pathology. Satellite animals were included for toxicokinetic
assessments.

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PLX-200 Clinical Programs

PLX-200 Clinical Development Strategy

PLX-200’s clinical development strategy prioritizes
the launch of Phase 2 SOTERIA, for which we received FDA authorization to initiate in October 2025, over the launch of PLX-200-001 and
PLX-200-003, two potentially single pivotal trials which received Study May Proceed letters from the FDA in January and April 2020, respectively.
The onset and prolonged impact of the COVID-19 pandemic delayed the launch of these two IND approved trials. Following the conclusion
of the pandemic period and recognizing financial constraints, we decided to pause the trials while conducting additional studies to investigate
the effectiveness of PLX-200 across other LSDs beyond CLN2 and CLN3, such as Krabbe disease and Sandhoff disease. The results from these
preclinical studies confirmed PLX-200’s potential therapeutic value beyond CLN2 and CLN3 to include multiple LSDs. Our clinical
development strategy now focuses on a Phase 2 trial to target a number of indications which we believe will provide useful data on PLX-200.
Based on these findings, we may find relevant information that can be used to optimize the PLX-200-001 and PLX-200-003 trials within the
context of their existing INDs. We believe the optimization will require an amendment to the existing INDs, which may provide for different
trial design elements such as trial center identification and patient recruitment, enrollment criteria, primary and secondary endpoints,
relevant biomarkers, and trial duration. See the risk factor entitled “Preclinical and clinical development involves a lengthy
and expensive process that is subject to delays and uncertain outcomes, and results of earlier studies and trials may not be predictive
of future clinical trial results. If our preclinical studies and clinical trials are not sufficient to support regulatory approval of
any of our drug candidates, we may incur additional costs or experience delays in completing, or ultimately be unable to complete, the
development of such drug candidate.”

We anticipate that SOTERIA will initiate in the
second half of 2026. Our regulatory approval and commercialization strategy for PLX-200 would prioritize the United States, followed
by Europe and other foreign jurisdictions. However, we cannot guarantee that an FDA approval will result in the expedited approvals in
other foreign jurisdictions.

PLX-200-600 (SOTERIA) Phase 2 Basket Clinical Trial

SOTERIA is a small-scale, proof-of-concept, open-label
Phase 2 basket trial intended to study PLX-200 for up to 101 weeks. We held a pre-IND submission meeting in April 2025. We submitted an
IND application to the FDA for the SOTERIA trial in August 2025 and received a safe to proceed letter in October 2025. SOTERIA is a Phase
2, open-label trial intended to assess the safety, tolerability, and clinical activity of PLX-200 in CLN2, CLN3, Krabbe disease, and Sandhoff
disease, four different LSDs whose patient populations we believe represent approximately one quarter of the LSD population. Designed
with a high degree of flexibility, SOTERIA represents a resource-efficient opportunity to validate PLX-200’s preclinical science
across multiple LSDs while gathering data that we believe will be invaluable in planning PLX-200’s future development pathway, including
the initiation of potentially pivotal trials. For the CLN2 and CLN3 cohorts, although the entire trial is open-label, these cohorts will
incorporate analyses comparing natural history data as a control arm to PLX-200’s treated arm. A natural history study is a preplanned
observational study intended to track the course of the disease. Should the data demonstrate compelling efficacy, we may seek conditional
marketing authorization.

SOTERIA’s purpose is to collect positive
patient data across several indications, with an additional focus on identifying safety parameters and clinical outcome assessments. SOTERIA
has been designed to provide key data and information important to PLX-200’s future clinical development. Data readouts from are
expected to provide guidance and a clear pathway for each of the four indications towards potentially registrable trials. Further, with
the precedent approval of Brineura, a drug approved to treat CLN2 on the basis of a single-arm, natural history comparator, open-label
trial, we believe there may be an opportunity for CLN2 and CLN3 to seek accelerated approval from the FDA based on precedent approval
for a third-party drug with a similar trial design. Products studied for their safety and effectiveness in treating serious or life-threatening
diseases or conditions may receive accelerated approval upon a determination that the product has an effect on a surrogate endpoint that
is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or
mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into
account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments. As a condition of
accelerated approval, the FDA will generally require the sponsor to perform adequate and well-controlled post-marketing clinical studies
to verify and describe the anticipated effect on irreversible morbidity or mortality or other clinical benefit.

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We anticipate this trial will initiate in the second half of 2026. For CLN2 and CLN3 cohorts, enrollment is expected to begin in the second half of 2026, with the first interim analysis
anticipated one year after the enrollment of the last patient. Given the flexible design of SOTERIA, enrollment timeline for the remaining
indications (Krabbe disease and Sandhoff disease) may also begin in 2026 but may be adjusted at the discretion of management once initial
sentinel data from Group 1 (CLN2 and CLN3) is provided.

SOTERIA’s Phase 2 basket trial design
is illustrated below in Figure 17.

Figure 17. Proposed PLX-200-600 (SOTERIA) Trial
Design

As depicted above, this basket trial is expected
to have a total of four cohorts. The CLN2 and CLN3 cohorts will be enrolled first, with the first three patients in each of the cohorts
designed as the sentinel group. The remaining cohorts, which include the Sandhoff and Krabbe cohorts, will initiate after CLN2 and CLN3
participants’ safety data is reviewed. All cohorts are expected to undergo titration and 96-week maintenance periods, followed by
safety follow-up. An interim analysis is expected to be used to determine the statistical power of the trial, triggered by various milestones.

SOTERIA’s primary objective is expected to
be the evaluation of the safety and tolerability of PLX-200 in a total of 18 trial participants, ranging from two to fifteen years
of age, with LSDs during the treatment period. Secondary objectives are expected to include evaluation of clinical activity of PLX-200
in trial participants as measured by respective instruments, as well as evaluation of PK and pharmacodynamic and biomarker data.

PLX-200-003 CLN3 Phase 3 Clinical Trial

PLX-200-003, our IND-approved Phase 3 clinical
trial of PLX-200 for the treatment of CLN3, is a single registrable, randomized, double-blind, placebo-controlled clinical trial for participants
with mild to moderate CLN3 disease. In March 2020, we submitted an IND for PLX-200 for the treatment of CLN3 and, in April 2020,
the FDA determined that the Phase 3 clinical trial may proceed. The primary objectives are to evaluate the safety and tolerability
of PLX-200 compared with the placebo group and to evaluate the efficacy of PLX-200 using the motor score of Hamburg Rating Scale compared
with the placebo group after 60 weeks of maintenance therapy.

PLX-200-003 Optimization

After extensive engagement with the CLN3 community,
we have determined that a clinical trial design optimization exercise is warranted with a possible change in trial design to a single-arm,
open-label trial. We plan to continue to actively engage with the FDA to seek alignment on the proposed trial optimization.

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The primary efficacy objective of the proposed
single arm, open-label clinical trial would be to evaluate the efficacy of PLX-200 in trial participants four to 18 years old with
mild to moderate CLN3 disease as measured by the Gait and Speech Clarity subdomains of the Physical Assessment of the Unified Batten Disease
Rating Scale after 96 weeks of treatment administration (maintenance period), while the secondary objective is to evaluate the safety
and tolerability of PLX-200 in CLN3 patients.

Figure 18. Proposed PLX-200-003 (CLN3) Trial
Design

1
Maximum tolerated dose is based on age and weight categories.

2,3,4
IA1, IA2 and IA3 allow potential accelerated approval depending on the result of evaluation.

We plan to continue optimizing our clinical trial
design based on the findings from SOTERIA and inputs from clinical experts in the CLN3 landscape before continuing to actively align with
the FDA. If the SOTERIA trial generates evidence of safety and effectiveness, it may help support the regulatory pathway and NDA
submission for PLX-200 as the treatment of CLN3.

PLX-200-001 CLN2 Phase 2 Clinical Trial

PLX-200-001, our IND-approved Phase 2 clinical
trial of PLX-200 for the treatment of CLN2, is a potentially single pivotal, single arm, open-label, synthetic control clinical trial
in participants with mild-to-moderate “classic” CLN2 disease.

In December 2019, we submitted an IND for
PLX-200 for the treatment of CLN2 and, in January 2021, the FDA determined that the Phase 2 clinical trial may proceed. PLX-200-001’s
primary endpoint aims to measure the mean difference in the rate of decline in the Total Disability Score of the Adapted Hamburg Rating
Scale, which contains the motor, visual, and language domains, between matched populations (PLX-200 participants with similar baseline
CLN2 motor score, genotype, and age (age three to 16) within three months as analyzable DEM-CHILD data), at Week 96 of treatment
exposure. The current total trial duration is expected to be approximately two years, although we may amend the clinical trial design
to improve patient/caregiver experience in the trial, reduce the length of the trial, and ensure that patients are exposed to an effective
and safe treatment.

PLX-300

Description

PLX-300 (cinnamic acid) is an unsaturated carboxylic
acid that occurs naturally in several plants as a deaminated product of phenylalanine. Cinnamic acid has a long history of human use as
a component of plant-derived scents and is one of many compounds in the common spice cinnamon, which has been used for millennia for its
medicinal properties. To date, the FDA has granted three ODDs to PLX-300 for the treatment of GM2 gangliosidosis, Krabbe disease, and
NPD types A and B. PLX-300 has also received RPD for the treatment of GM2 gangliosidosis, Krabbe disease, and NPD type A and type
B. The receipt of such designations does not guarantee a faster development process, regulatory review, or approval as compared to the
conventional FDA approval process.

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We have completed preclinical animal model studies
for PLX-300 and are evaluating the potential for clinical advancement, which will be contingent upon a positive readout and successful
commercialization of our most advanced drug candidate, PLX-200.

PLX-300 Mechanism of Action

Cinnamic acid, the main component of PLX-300, has
been documented to have antioxidant and anti-inflammatory activities that are important for protecting brain cells from neurodegeneration,
a common pathology in LSDs. Additional biological activities of cinnamic acid have been identified, including stimulation of suppressor
of cytokine signaling 3 activity, which inhibits the activation of microglia. Our preclinical studies demonstrate that PLX-300 is also
capable of activating PPARα and stimulating autophagy. Through these mechanisms, we believe that PLX-300 has potential to address
unmet needs within the LSD landscape.

PLX-300 Preclinical Data Summary

Tay-Sachs and Sandhoff Diseases

We have completed preclinical studies using PLX-300
in a HEXB-/- mice model, a gene mutation animal model of Sandhoff disease, a severe form of Tay-Sachs disease. Our animal studies
demonstrated that oral administration of PLX-300 reduced glycoconjugate accumulation (Figure 19), astroglial and microglial activations
(Figure 20), and apoptosis in the brain of HEXB-/- mice, which led to improved neurobehavioral scores in open-field activities
and enhanced rotarod performance, and normalized both footprints and gating (Figure 21). Based on these preclinical data, we believe that
PLX-300 has therapeutic potential to halt the progression of Sandhoff Disease.

Figure 19. PLX-300 Reduces Neuronal Apoptosis
and Cerebral Glycoconjugates Accumulation

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Figure 20. PLX-300 Reduces Neuroinflammation

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Figure 21. PLX-300 Improves Locomotor Function

Krabbe Disease

We have also completed in vivo studies using
PLX-300 in GALC-/- mice, in which we observed that treatment with PLX-300 increased the level of MBP and PLP, markers of myelin,
in cerebellum and corpus callosum (Figure 22), indicating the restoration of myelin. This finding was confirmed by immunostaining
with antibodies against PLP. PLX-300 has also been demonstrated to reduce astroglial activation and neuroinflammation, as observed
by decreased level of iNOS and GFAP, in vivo in the cerebellum of GALC-/- mice (Figure 23). Based on these preclinical data
and the fact that Krabbe Disease is associated with lipid accumulation and glial activation, we believe that PLX-300 has the potential
for high therapeutic value in treating Krabbe Disease.

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Figure 22. Treatment with PLX-300 Restores Myelin
in Cerebellum and Corpus Callosum of GALC-/- Mice

Figure 23. PLX-300 Reduces Astroglial Activation
In Vivo in Cerebellum and Corpus Callosum of GALC-/- Mice

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NPD type A and type B

We have also evaluated the effects of PLX-300 on
both glial activation and neurodegeneration in ASMase knock out mice (ASMase-/- mice). Our preclinical studies demonstrated
that orally administered PLX-300 reduced accumulation of neural sphingomyelin, a pathological hallmark of NPD (Figure 24), activated astroglial
and microglial in the cerebellum, decreased neural apoptosis (Figure 25) and improved the locomotor activities (Figure 26) in treated
ASMase-/- mice.

Figure 24. PLX-300 Reduces the Accumulation
of Sphingomyelin in ASMase-/- Mice

Figure 25. PLX-300 Decreases Neural Apoptosis
in ASMase-/- Mice

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Figure 26. PLX-300 Improves Locomotor Activities
in ASMase-/- Mice

PLX-300 Anticipated Clinical Programs

We have completed preclinical animal model studies
for PLX-300 and are evaluating the potential for clinical advancement, which will be contingent upon a positive readout and successful
commercialization of our most advanced drug candidate, PLX-200.

PLX-100

Description

PLX-100 is a novel oral therapy comprised of our
PPARα agonist, PLX-200, and vitamin A, a RXRα agonist. We believe that the unique mechanism of lysosomal biogenesis in PLX-200
and the role of vitamin A, a group of fat-soluble retinoids in major biological processes such as cellular communication, work synergistically
to improve relevant enzymatic activities in multiple LSD indications while minimizing exposure levels. PLX-100 allows for an alternative
to PLX-200 and may show improved efficacy. We are developing PLX-100 with the goal of addressing some of the limitations of therapies
currently available in the LSD landscape. To date, the FDA has granted one ODD to PLX-100 for the treatment of CLN2. The receipt of such
designation does not guarantee a faster development process, regulatory review, or approval as compared to the conventional FDA approval
process.

We have completed preclinical animal model studies
for PLX-100 and are evaluating the potential for clinical advancement, which will be contingent upon a positive readout and successful
commercialization of our most advanced drug candidate, PLX-200.

PLX-100 Mechanism of Action

PLX-100 forms a PPARα/RXRα heterodimer
with PLX-200 binding to PPARα and retinoic acid activating RXRα. PPARα/RXRα heterodimer has been documented to
show DNA binding activity and activate transcription of genes involved in lipid homeostasis, cell growth, and differentiation. Our preclinical
studies demonstrated that PPARα/RXRα heterodimer binds to PPRE-and RXR-binding sites in the TFEB promoter and, thereby, upregulates
TFEB and lysosomal genes. Moreover, retinoic acid supports vision, which is lost in Batten disease patients.

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Figure 27. Mode of Action of PLX-100

The potential therapeutic benefits of PLX-200,
one of the main components of PLX-100, has been studied in multiple preclinical studies across various LSD indications. As our preclinical
studies in animal models demonstrated that PLX-100 as a combination therapy may provide improved efficacy over PLX-200 alone, we believe
that PLX-100 also has a strong therapeutic value in treating other catastrophic LSD indications beyond CLN2 and Krabbe Diseases, such
as CLN3, Tay-Sachs and Sandhoff Diseases.

PLX-100 Preclinical Data Summary

CLN2

Our preclinical studies using a CLN2 animal model
showed that PLX-100 up-regulated TPP1 mRNA, protein, and enzymatic activity in mouse and human primary astrocyte cultures via activation
of the PPARα in a dose and time dependent manner. Activation of PPARα induced lysosomal biogenesis in mouse brain cells. Protein
levels of TPP1 were also increased in both human astrocytes and SH-SY5Y human neuroblastoma cell lines as determined by immunofluorescence
(Figure 28). Our animal model suggested that the upregulation of TPP1 occurs via formation of PPARα/RXRα heterodimer. Based
on these data, we believe that PLX-100 may provide benefit to patients with CLN2, which is characterized by deficiency and/or loss of
function of the TPP1 lysosomal protein.

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Figure 28. PLX-100 Increases Lysosomal Biogenesis
in LINCL Patient Fibroblasts

Our preclinical studies also demonstrated that
PLX-100 upregulates TFEB in brain cells via PPARα/RXRα pathway. Primary astrocytes treated with PLX-100 for 4, 6, 12, and
24 hours demonstrated enhanced expression of TPP1 by almost more than three-fold relative to the levels achieved by PLX-200 alone.
Figure 29 below shows improvement in TFEB level when treated with PLX-100. Given the increased potency, we believe PLX-100 has therapeutic
value in the treatment of LSDs in which the autophagy-lysosome pathway plays an important role.

Figure 29. PLX-100 Upregulates TFEB via PPARα/RXR

Krabbe Disease

Oral administration of PLX-100 has been shown to
markedly protect and/or increase the level of myelin markers, MBP and PLP in the cerebellum and corpus callosum of GALC-/- mice
(Figure 30; Figure 31). We believe this increase in MBP and PLP has therapeutic importance in Krabbe disease as we have also seen a marked
decrease in MBP and PLP in cerebellum and corpus callosum of GALC-/- mice as compared to wild type mice (Figure 30; Figure
31).

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Figure 30. PLX-100 Increases MBP and PLP Levels
in Cerebellum

Figure 31. PLX-100 Increases MBP and PLP Levels
in Corpus Callosum

In the same study, oral administration of PLX-100
has also been shown to reduce glial activation, a hallmark of many neurodegenerative diseases, including Krabbe Disease. Our preclinical
studies showed that PLX-100 decreased the astroglial marker GFAP and proinflammatory marker iNOS levels in both the cerebellum and corpus
callosum (Figure 32; Figure 33). Administration of PLX-100 has also shown to significantly improve hypolocomotion in GALC-deficient mice
(Figure 34).

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Figure 32. PLX-100 Decreases iNOS and GFAP Levels
in Cerebellum

Figure 33. PLX-100 Decreases iNOS and GFAP Levels
in Corpus Callosum

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Figure 34. PLX-100 Improves Locomotor Function
in GALC-deficient Mice

PLX-100 Anticipated Clinical Programs

We have completed preclinical animal model studies
for PLX-100 and are evaluating the potential for clinical advancement, which will be contingent upon a positive readout and successful
commercialization of our most advanced drug candidate, PLX-200.

PLX-400

Description

PLX-400 is a novel intranasally deliverable gene
therapy candidate. It is designed to deliver lysosomal genes in appropriate adeno-associated viral vectors. We are initially developing
PLX-400 for the treatment of CLN2 and CLN3 and are actively conducting additional preclinical animal studies with the goal of advancing
the program toward clinical development.

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Intra-nasal delivery takes advantage of the “nose-to-brain”
(“N2B”) transport systems in which several possibilities exist for bypassing the BBB for direct delivery to the brain. These
include the draining of drugs absorbed in the nasal mucosa into the sinus and eventually to the carotid artery, where a “counter-current
transfer” from venous blood to the brain may occur. Lymphatic drainage into the perivascular space from the olfactory trigeminal
nerves have also been postulated as the mechanism of N2B transport. PLX-400 is designed to deliver lysosomal genes via intranasal delivery
system to address the limitations of therapies currently available in the LSD market.

PLX-400 Mechanism of Action

PLX-400 is a self-complementary intranasally deliverable
adeno-associated virus (“AAV”) gene replacement therapy with a human cytomegalovirus (“CMV”) promoter. PLX-400
is designed to express the relevant missing human gene for the treatment of LSDs, such as CLN2 transgene for the treatment of CLN2 disease.

PLX-400 Preclinical Data Summary

In our preclinical studies using a CLN2 single
gene mutation animal model, PLX-400 as a monotherapy as well as in combination with oral administration of PLX-200, was demonstrated to
prolong the life span CLN2-/- mice (Figure 35).

Figure 35. Improved Life Span with PLX-400 as
a Monotherapy and in Combination with Oral PLX-200

PLX-400 Anticipated Clinical Programs

We intend to undertake further preclinical animal
model studies for PLX-400 and evaluate clinical advancement potential, whether as a monotherapy or in combination with oral administration
of PLX-200, at a later date.

Manufacturing and Supply

We do not own or operate, and currently have no
immediate plans to establish, any manufacturing facilities for the clinical or commercial scale production of our product candidates.
We currently rely, and expect to continue to rely for the foreseeable future, on third-party CMOs for the manufacturing of our product
candidates for preclinical and clinical testing, as well as for commercial manufacture of any products that we may commercialize. We currently
obtain our supplies from our CMOs on a purchase order basis and do not have long-term supply arrangements in place. Should any of our
CMOs become unavailable to us for any reason, we believe that there are a number of potential replacements, although we may face delays
in identifying and qualifying such replacements. We intend to qualify manufacturers to provide the active pharmaceutical ingredients and
drug products prior to submission of an NDA to the FDA or other marketing authorization applications to other regulatory authorities.

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Given our stage of development, we have not yet
defined our sales, marketing or product distribution capabilities and strategy for our product candidates. We intend to build a commercial
infrastructure to support the sale of any of our approved products and our commercial strategy may include the establishment of our own
commercial sales force or third-party relationships, including the use of strategic partners, distributors, and a contract sales force.
While we may commit significant financial and management resources to commercial activities, we may also consider enhancing our capabilities
by collaborating with one or more pharmaceutical companies. We plan to further evaluate these alternatives as we approach approval for
our product candidates.

Licensing, Collaboration and Other Agreements

We actively pursue strategic licensing and collaboration
opportunities with biopharmaceutical companies and academic institutions to expand our product pipeline and support the advancement of
our product candidates. Below is an overview of our licensing and collaboration agreements that are expected to have a material impact
on our financial results in the near term.

2016 License Agreement with Rush University Medical Center

In April 2016, we entered into a License Agreement
with Rush, which was subsequently amended by the First Amendment in July 2019, the Second Amendment in September 2019, and the
Third Amendment in December 2021 (as amended, the “2016 Rush License Agreement”). Pursuant to the 2016 Rush License Agreement,
we received an exclusive, sublicensable license to certain of Rush’s rights in certain technologies (the “Licensed Patents”)
in the fields of composition and method of treating certain neurodegenerative disorders (the “Licensed Field”) to make, use,
formulate, import, export, sell and offer to sell certain products within the Licensed Field, worldwide. We also granted non-exclusive
licenses to Rush, with the right to grant sublicenses to non-profit institutions and governmental agencies, to make and use the Licensed
Patents and certain improvements solely for non-commercial research and education purposes.

As consideration for the license, we paid Rush
an upfront payment of $70 thousand and issued common stock to Rush equal to 15% of our then-outstanding common stock. Pursuant to the
2016 Rush License Agreement, we are obligated to pay Rush (i) up to $150 thousand upon the achievement of specific milestones and
(ii) an annual royalty equal to 3.5% of net sales. In the event we sublicense the rights under the 2016 Rush License Agreement, we
are also obligated to pay Rush (i) an annual royalty equal to 3.5% of such sublicensee’s net sales and (ii) a percentage
of all non-royalty considerations we receive from such sublicensee in the mid-double-digit range.

The 2016 Rush License Agreement will continue indefinitely
or until the expiration of the last Licensed Patent, unless terminated (i) by us at any time upon 90 days’ written notice
to Rush or (ii) by Rush for certain conditions, including our insolvency, material breach of the agreement, or failure to appoint
a new chief executive officer or president within six months following the termination or resignation of the current chief executive
officer or president that remain uncured for 90 days after written notice. The last licensed patent underlying the 2016 Rush License
Agreement is estimated to expire in 2044.

Master Services Agreement with Rush University Medical Center

In June 2016, we entered into a Master Services
Agreement with Rush (the “Rush MSA”), pursuant to which Rush provides services regarding the development and regulatory approval
process for products currently under development by us, under statements of work for such services agreed to by the parties from time
to time.

The Rush MSA will continue until the completion
of all services, unless terminated by either party (i) upon 30 days’ prior written notice for any reason, (ii) upon
30 days’ prior written notice of the other party’s material breach that remains uncured during that period, or (iii) upon
written notice of the other party’s bankruptcy, liquidation, or insolvency. We may also terminate the Rush MSA upon 30 days’
written notice to Rush if we decide not to proceed with the development of our products.

In April 2025, the Company paid $109 thousand under
two statements of work pursuant to the Rush MSA. Total expenses incurred for the years ended December 31, 2025 and 2024 were $133 thousand
and zero, respectively, which is recorded in research and development in the statement of operations and comprehensive loss. As of December
31, 2025 and 2024, there was $23 thousand and zero due to Rush, respectively, which is recorded in accrued expenses – related party
in the balance sheet.

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2022 License Agreement with Rush University Medical Center

In May 2022, Somaryx Therapeutics Limited
(“Somaryx”), an affiliate of Mstone, entered into a License Agreement with Rush (as amended, the “2022 Rush License
Agreement”), which was subsequently novated to us by Somaryx in January 2025 and amended in February 2025. Under the 2022
Rush License Agreement, we received an exclusive, sublicensable license to certain of Rush’s rights in certain technologies (the
“Patent Rights”) in the fields of composition and method of treating certain disorders (the “Licensed Field”)
to make, use, formulate, import, export, sell and offer to sell certain products within the Licensed Field, worldwide including a gene
therapy to treat various lysosomal storage disorders. In consideration for the license, we issued 277,823 shares to Rush and 3,426,484
shares to Mstone.

Pursuant to the 2022 Rush License Agreement, we
are obligated to pay Rush (i) up to $75 thousand upon the achievement of specific milestones for an orphan indication, (ii) up
to $650 thousand upon the achievement of specific milestones for a non-orphan indication, and (iii) an annual royalty equal to 1.75% of
net sales. In the event we sublicense the rights under the 2022 Rush License Agreement, we are also obligated to pay Rush (i) an
annual royalty equal to 1.75% of such sublicensee’s net sales and (ii) 7.5% of all non-royalty considerations we receive from
such sublicensee.

The 2022 Rush License Agreement will continue indefinitely
or until the expiration of the last Patent Rights, unless terminated (i) by us at any time upon 90 days’ written notice
to Rush or (ii) by Rush for certain conditions, including our insolvency, material breach of the agreement, or failure to appoint
a new chief executive officer or president within six months following the termination or resignation of the current chief executive
officer or president that remain uncured for 90 days after written notice. The last licensed patent underlying the 2022 Rush License
Agreement is expected to expire in 2040.

Intellectual Property

Intellectual property, including patents, trade
secrets, trademarks and copyrights, is a critical component of our business. Our commercial success depends, in part, on our ability to
obtain and maintain robust intellectual property protections for our current and future product candidates, as well as for our proprietary
discoveries, development technologies, and know-how. It also depends on, in part, on our ability to protect our intellectual property
from unauthorized use. We pursue a strategy to develop and maintain protection of our proprietary position by, among other methods, filing
patent applications in the United States and other key jurisdictions relating to our product candidates and their methods of use.
A comprehensive discussion on risk relating to intellectual property is provided under the section of this Annual Report entitled “Risk
Factors — Risks Related to Intellectual Property.”

Our patent portfolio is built with a strategic
objective of establishing layered protection around our product candidates through claims on compositions of matter, pharmaceutical formulations,
and methods of treatment. Along with our Licensor (Rush), we are actively prosecuting patents in principal jurisdictions with strong IP
enforcement and commercial relevance, specifically the United States, Europe, Canada and China (including Hong Kong, SAR). As
of January 12, 2026, our patent portfolio consists of six distinct patent application families protecting the compositions of matter and
methods of treatment of our product candidates. This includes five issued patents in the United States, six issued patents in foreign
jurisdictions (excluding validated European patents in individual countries), one allowed patent, and 25 pending patent applications,
of which four are U.S. filings, with the remainder filed internationally. We also hold two proprietary patent families protecting
the pharmaceutical formulations of our lead candidate, PLX-200.

PLX-200/PLX-100

We hold exclusive rights to four patent families
that disclose and cover the methods of using a fibrate, including gemfibrozil, all-trans retinoic acid, or a combination of a fibrate
and all-trans retinoic acid for the treatment of lysosomal storage disorders, which represent our key areas of immediate clinical development.

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U.S. Patent No. US 9,750,712 B2 and its divisional,
U.S. Patent No. US 10,357,471 B2, contain issued claims directed to methods of treating NCLs comprising administering a fibrate (e.g.,
gemfibrozil), all-trans retinoic acid, or a combination of a fibrate and all-trans retinoic acid. A continuation of this family, U.S. Patent
No. US 11,351,142 B2, contains issued claims directed to methods of treating Tay-Sachs disease comprising administering a fibrate (e.g.,
gemfibrozil), or a combination of a fibrate and all-trans retinoic acid. This patent family is estimated to expire in 2034.

A separate patent family discloses the treatment
of lysosomal storage disorders, specifically neuronal ceroid lipofuscinosis, comprising administering a fibrate such as gemfibrozil. The
patent family is issued in the United States (US 11,020,366 B2), Australia (2017388399), and Canada (CA 3043921 C), with additional
applications from this family pending in China (including Hong Kong), and estimated expiration dates in 2034 and 2037 on granted
claims.

A patent family that discloses methods of administering
or using gemfibrozil alone or in combination with Vitamin A to treat globoid cell leukodystrophy (a/k/a Krabbe disease) is filed in the
United States (U.S. Ser. No. 18/261,959), Europe, Canada, and China (including Hong Kong), and once granted will have an estimated
expiration date in 2041. Another patent family discloses the treatment of juvenile neuronal ceroid lipofuscinosis with PLX-200 is filed
in the United States (U.S. Ser. No. 19/149,297), Europe, Canada, China, Korea, and Japan, with an estimated expiry date in 2044 on any
granted claims.

With respect to the formulation of gemfibrozil,
we hold issued patents disclosing a gemfibrozil salt composition in Australia (2021224133) and Japan (JP 7538557 B2), both with projected
expiration dates in 2041. Additional patent applications from this family are pending in the United States, Europe, and Canada, with
projected expiration dates in 2041. We are also pursuing a patent application directed to a liquid pharmaceutical composition of gemfibrozil
in an aqueous solvent in the United States (U.S. Application No. 18/871,396), with a projected expiration date in 2043.

Orphan Drug Designation

PLX-200 has obtained orphan drug designation from
the FDA as well as the EMA for the treatment of all 13 sub-types of neuronal ceroid lipofuscinoses. PLX-200 has obtained additional orphan
drug designation status from the FDA for the treatment of GM2 gangliosidoses or Tay-Sachs and Sandhoff diseases, and globoid cell leukodystrophy
or Krabbe disease. PLX-100 has obtained orphan drug designation from the FDA for treatment of neuronal ceroid lipofuscinoses. Under the
Orphan Drug Act, the FDA may designate a product as an orphan drug if, in relevant part, it is a drug intended to treat a rare disease
or condition, defined as a patient population of fewer than 200,000 in the United States. If PLX-200 receives the first marketing
approval for the treatment of any of the 13 sub-types of neuronal ceroid lipofuscinoses, Tay-Sachs and Sandhoff diseases, and/or Krabbe
disease, then it would be entitled to marketing exclusivity for seven years, which precludes the FDA from approving another marketing
application for the same drug for the same use or indication for seven years after PLX-200’s marketing approval. We may seek
an additional six months of market exclusivity pursuant to The Best Pharmaceuticals for Children Act (“BPCA”). Among the other
benefits of orphan drug designation are tax credits for certain research and fee waivers. The receipt of such designation does not guarantee
a faster development process, regulatory review, or approval as compared to the conventional FDA approval process.

PLX-300

We hold exclusive rights to an issued patent covering
the administration of cinnamic acid or in combination with either all-trans retinoic acid or Vitamin A to treat a lysosomal storage disorder
in the United States (US 12,023,345 B2), Europe (EP 3,220,906 B1), Japan (JP 2021107404 A) and Australia (2015350223). Currently,
this patent family includes an allowed patent in Canada (2967066), and pending divisional applications in Europe, Canada, and the United States.
The granted claims in this patent family are estimated to expire in 2035. In addition, along with our Licensor (Rush), we are pursuing
patent protection for the method of using cinnamic acid to treat globoid cell leukodystrophy or Krabbe disease under a related patent
family filed for PLX-200. This family shares the same application as noted above and is filed in the United States (U.S. Ser.
No. 18/261,959), Europe, Canada and China (including Hong Kong), with estimated expiration dates in 2041.

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Orphan Drug Designation

We have obtained orphan drug designation from the
FDA for the treatment of GM2 gangliosidosis, Krabbe disease, and NPD disease type A and type B. Under the Orphan Drug Act, the FDA
may designate a product as an orphan drug if, in relevant part, it is a drug intended to treat a rare disease or condition, defined as
a patient population of fewer than 200,000 in the United States. If PLX-300 receives the first marketing approval for the treatment
of GM2 gangliosidosis, Krabbe disease or NPD type A or type B then it would be entitled to marketing exclusivity for seven years,
which precludes the FDA from approving another marketing application for the same drug for the same use or indication for seven years
after PLX-300’s marketing approval. The receipt of such designation does not guarantee a faster development process, regulatory
review, or approval as compared to the conventional FDA approval process.

PLX-400

We hold exclusive rights to an issued patent disclosing
methods of treating lysosomal storage disorders by administering a combination of nasal gene delivery and a pharmaceutical agent, including
oral cinnamic acid, oleamide, or gemfibrozil in Australia (2020245415). The patent is pending in the United States (U.S. Ser.
No. 17/441,029), Canada, China, Japan, and the Republic of Korea. Any granted claims from this patent family will have an estimated expiration
date in 2040.

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 date of filing the non-provisional application. In the United States, a patent’s term may be lengthened by patent
term adjustment, which compensates a patentee for administrative delays by the USPTO in granting a patent or may be shortened if a patent
is terminally disclaimed over an earlier-filed patent. The term of a patent that covers an FDA-approved drug may also be eligible for
patent term extension, which permits patent term restoration of a U.S. patent as compensation for the patent term lost during the
FDA regulatory review process. The Hatch-Waxman Act permits a patent term extension of up to five years beyond the expiration of
the patent. The length of the patent term extension is related to the length of time the drug is under regulatory review. A patent term
extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval and only one
patent applicable to an approved drug may be extended. Moreover, a patent can only be extended once, and thus, if a single patent is applicable
to multiple products, it can only be extended based on one product. Similar provisions are available in Europe and other foreign jurisdictions
to extend the term of a patent that covers an approved drug. When possible, we expect to apply for patent term extensions for patents
covering our product candidates and their methods of use.

We may also rely on trade secrets relating to our
discovery programs and product candidates, and seek to protect and maintain the confidentiality of proprietary information to protect
aspects of our business that are not amenable to, or that we do not consider appropriate for, patent protection. It is our policy to require
our employees, consultants, outside scientific collaborators, sponsored researchers and other advisors to execute confidentiality agreements
upon the commencement of employment or consulting relationships with us, and for employees and consultants to enter into invention assignment
agreements with us.

Competition

The pharmaceutical and biotechnology industries
are characterized by rapidly advancing technologies, fierce competition, and a strong defense of intellectual property. While we believe
that our platform, knowledge, scientific resources and experience provides us with competitive advantages, we face competition with respect
to our current product candidates and will face competition with respect to any other product candidates that we may seek to develop or
commercialize in the future, from, among others, major pharmaceutical companies, specialty pharmaceutical and biotechnology companies,
academic institutions, governmental agencies and public and private research institutions worldwide. It is also possible that we will
face competition from other pharmaceutical approaches as well as other types of therapies. The key competitive factors affecting the success
of our product candidates are likely to be the efficacy and safety of our product candidates, the scope and limitations of marketing approval,
the success of regulatory approval, the successful protection of our intellectual property, and the availability of funding and reimbursement.

With respect to products and product candidates
in the treatment of the 13 sub-types of NCLs, there is currently one established standard of care for one sub-type. On April 17,
2017, cerliponase alfa was approved for the treatment of CLN2 disease. We are also aware of companies that are currently developing product
candidates that can be competitive, including Tern Therapeutics, Inc. For the remaining sub-types of NCLs, while direct competition is
limited as there is currently no established standard of care, we are aware of companies that are developing product candidates, including
THX Pharma (formerly known as Theranexus) in the treatment of CLN3.

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With respect to products and product candidates
in the treatment of Tay-Sachs and Sandhoff diseases, while direct competition is limited as there is currently no established standard
of care, we are aware of companies that are developing product candidates that can be competitive, including IntraBio, Inc.

With respect to products and product candidates
in the treatment of Krabbe disease, hematopoietic stem cell transplantation is considered the current standard of care. We are aware of
other companies that are developing product candidates that can be competitive, including Forge Biologics (Ajinomoto).

With respect to products and product candidates
in the treatment of NPD type A or type B, there is currently one established standard of care. On August 31, 2022, olipudase alfa
was approved for the treatment of NPD type A and type B. We are unaware of other companies developing treatments for NPD type A or
type B that can be competitive.

Additional potential competitors include academic
institutions, government agencies and other public and private research organizations that conduct research, seek patent protection and
establish collaborative arrangements for research, development, manufacturing and commercialization.

There are a number of large pharmaceutical and
biotechnology companies that currently market and sell products or are pursuing the development of product candidates for the treatment
of the indications that we are pursuing. More established companies may have a competitive advantage over us due to their greater size,
resources and institutional experience. In particular, these companies have greater experience and expertise in securing reimbursement,
government contracts, relationships with key opinion leaders, conducting testing and clinical trials, obtaining and maintaining regulatory
approvals and distribution relationships to market products, and marketing approved drugs. These companies also have significantly greater
research and marketing capabilities than we do.

Government Regulation

The FDA and other regulatory authorities at federal,
state and local levels, as well as in foreign countries, extensively regulate, among other things, the research, development, testing,
manufacture, quality control, import, export, safety, effectiveness, labeling, packaging, storage, distribution, record keeping, approval,
advertising, promotion, marketing, post-approval monitoring and post-approval reporting of drug product candidates, such as those we are
developing. We, along with third-party contractors, will be required to navigate the various preclinical, clinical and commercial approval
requirements of the governing regulatory agencies of the countries in which we wish to conduct studies or seek approval or licensure of
our product candidates. Generally, before a new therapeutic product can be marketed, considerable data demonstrating a biological product
candidate’s quality, safety, purity and potency, or a small molecule drug candidate’s quality, safety and efficacy, must be
obtained, organized into a format specific for each regulatory authority, submitted for review and approved by the regulatory authority.
For biological product candidates, potency is similar to efficacy and is interpreted to mean the specific ability or capacity of the product,
as indicated by appropriate laboratory tests or by adequately controlled clinical data obtained through the administration of the product
in the manner intended, to effect a given result.

Failure to comply with the applicable U.S. requirements
at any time during the product development process, approval process or post-marketing may subject an applicant to administrative or judicial
sanctions. These sanctions could include, among other actions, the FDA’s refusal to approve pending applications from the sponsor,
withdrawal of an approval, a clinical hold, untitled or warning letters, product recalls or market withdrawals, product seizures, total
or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement and
civil or criminal penalties. Any agency or judicial enforcement action could have a material adverse effect on our company and our products
or product candidates.

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U.S. Government Regulation

In the United States, the FDA regulates drugs
under the Federal Food, Drug, and Cosmetic Act (“FDCA”) and its implementing regulations. The process of obtaining regulatory
approvals and the subsequent compliance with appropriate federal, state, and local statutes and regulations requires the expenditure of
substantial time and financial resources. Failure to comply with the applicable U.S. requirements at any time during the product
development process, approval process or following approval may subject an applicant to administrative action and judicial sanctions.
The process required by the FDA before a drug may be marketed in the United States generally involves the following:

●
completion of preclinical laboratory tests and animal studies performed in accordance with the FDA’s current Good Laboratory Practices regulation;

●
submission to the FDA of an IND, which must become effective before clinical trials may begin and must be updated annually or when significant changes are made;

●
approval by an independent IRB, or ethics committee at each clinical site before the trial is commenced;

●
manufacture of the proposed biologic candidate in accordance with current good manufacturing practices(“cGMP”);

●
performance of adequate and well-controlled human clinical trials in accordance with GCP requirements to establish the safety, purity and potency of the proposed biologic product candidate for its intended purpose;

●
preparation of and submission to the FDA of an NDA (or a BLA for a biological product), after completion of all pivotal clinical trials;

●
satisfactory completion of an FDA Advisory Committee review, if applicable;

●
a determination by the FDA within 60 days of its receipt of an NDA or BLA to file the application for review (if applicable);

●
satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the proposed product is produced to assess compliance with cGMPs, and to assure that the facilities, methods and controls are adequate to preserve the biological product’s continued safety, purity and potency, and of selected clinical investigation sites to assess compliance with GCPs; and

●
FDA review and approval of the NDA or BLA to permit commercial marketing of the product for particular indications for use in the United States.

Preclinical and Clinical Development

Prior to beginning any clinical trial with a product
candidate in the United States, we must submit an IND to the FDA. An IND is a request for authorization from the FDA to administer
an investigational new drug product to humans. The central focus of an IND submission is on the general investigational plan and the protocol
or protocols for preclinical studies and clinical trials. The IND also includes results of animal and in vitro studies assessing the toxicology,
pharmacokinetics, pharmacology and pharmacodynamic characteristics of the product, CMC information, and any available human data or literature
to support the use of the investigational product. In April 2025, the FDA published a roadmap to reduce animal testing in preclinical
safety studies, including those required in INDs, with scientifically validated new approach methodologies (“NAMs”). An IND
must become effective before human clinical trials may begin. The IND automatically becomes effective 30 days after receipt by the
FDA, unless the FDA, within the 30-day period, raises safety concerns or questions about the proposed clinical trial. In such a case,
the IND may be placed on clinical hold and the IND sponsor and the FDA must resolve any outstanding concerns or questions before the clinical
trial can begin. Submission of an IND therefore may or may not result in FDA authorization to begin a clinical trial.

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In addition to the IND submission process, supervision
of human gene transfer trials includes evaluation and assessment by an IBC, a local institutional committee that reviews and oversees
research utilizing recombinant or synthetic nucleic acid molecules at that institution. The IBC assesses the safety of the research and
identifies any potential risk to public health or the environment and such review may result in some delay before initiation of a clinical
trial.

Clinical trials involve the administration of the
investigational product to human subjects under the supervision of qualified investigators in accordance with GCPs, which include the
requirement that all research subjects provide their informed consent for their participation in any clinical study. Clinical trials are
conducted under protocols detailing, among other things, the objectives of the study, the parameters to be used in monitoring safety and
the effectiveness criteria to be evaluated. A separate submission to the existing IND must be made for each successive clinical trial
conducted during product development and for any subsequent protocol amendments. Furthermore, an independent IRB for each site proposing
to conduct the clinical trial must review and approve the plan for any clinical trial and its informed consent form before the clinical
trial begins at that site, and must monitor the study until completed. Regulatory authorities, the IRB or the sponsor may suspend a clinical
trial at any time on various grounds, including a finding that the subjects are being exposed to an unacceptable health risk or that the
trial is unlikely to meet its stated objectives. Some studies also include oversight by an independent group of qualified experts organized
by the clinical study sponsor, known as a data safety monitoring board, which provides authorization for whether or not a study may move
forward at designated check points based on access to certain data from the study and may halt the clinical trial if it determines that
there is an unacceptable safety risk for subjects or other grounds, such as no demonstration of efficacy. There are also requirements
governing the reporting of ongoing preclinical studies and clinical trials and clinical study results to public registries.

Human clinical trials are typically conducted in
three sequential phases that may overlap.

●
Phase 1. The investigational product is initially introduced into healthy human subjects or patients with the target disease or condition. These studies are designed to test the safety, dosage tolerance, absorption, metabolism and distribution of the investigational product in humans, the side effects associated with increasing doses, and, if possible, to gain early evidence on effectiveness.

●
Phase 2. The investigational product is administered to a limited patient population with a specified disease or condition to evaluate the preliminary efficacy, optimal dosages and dosing schedule and to identify possible adverse side effects and safety risks. Multiple Phase 2 clinical trials may be conducted to obtain information prior to beginning larger and more expensive Phase 3 clinical trials.

●
Phase 3. The investigational product is administered to an expanded patient population to further evaluate dosage, to provide statistically significant evidence of clinical efficacy and to further test for safety, generally at multiple geographically dispersed clinical trial sites. These clinical trials are intended to establish the overall risk/benefit ratio of the investigational product and to provide an adequate basis for product approval.

In some cases, the FDA may require, or companies
may voluntarily pursue, additional clinical trials after a product is approved to gain more information about the product. These so-called
Phase 4 studies may be made a condition to approval of an NDA or BLA. Concurrent with clinical trials, companies may complete
additional animal studies and develop additional information about the biological characteristics of the product candidate, and must finalize
a process for manufacturing the product in commercial quantities in accordance with cGMP requirements. The manufacturing process must
be capable of consistently producing quality batches of the product candidate and, among other things, must develop methods for testing
the identity, strength, quality and purity of the final product, or for biologics, the safety, purity and potency. Additionally, appropriate
packaging must be selected and tested and stability studies must be conducted to demonstrate that the product candidate does not undergo
unacceptable deterioration over its shelf life.

A sponsor may choose, but is not required, to conduct
a foreign clinical study under an IND. When a foreign clinical study is conducted under an IND, all IND requirements must be met
unless waived. When the foreign clinical study is not conducted under an IND, the sponsor must ensure that the study complies with certain
FDA regulatory requirements in order to use the study as support for an IND or application for marketing approval or licensure, including
that the study was conducted in accordance with GCP, including review and approval by an independent ethics committee and use of proper
procedures for obtaining informed consent from subjects, and the FDA is able to validate the data from the study through an onsite inspection
if the FDA deems such inspection necessary. The GCP requirements encompass both ethical and data integrity standards for clinical studies.

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BLA Submission and Review

Assuming successful completion of all required
testing in accordance with all applicable regulatory requirements, the results of product development, nonclinical studies and clinical
trials are submitted to the FDA as part of a BLA requesting approval to market the product for one or more indications. The BLA must include
all relevant data available from pertinent preclinical studies and clinical trials, including negative or ambiguous results as well as
positive findings, together with detailed CMC information, and proposed labeling, among other things. Data can come from company-sponsored
clinical studies intended to test the safety and effectiveness of the product, or from a number of alternative sources, including studies
initiated and sponsored by investigators. The submission of a BLA requires payment of a substantial application user fee to the FDA, unless
a waiver or exemption applies.

In addition, under the Pediatric Research Equity
Act (“PREA”), a BLA or supplement to a BLA must contain data to assess the safety and effectiveness of the biological product
candidate for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric
subpopulation for which the product is safe and effective. The Food and Drug Administration Safety and Innovation Act requires that a
sponsor who is planning to submit a marketing application for a biological product that includes a new active ingredient, new indication,
new dosage form, new dosing regimen or new route of administration submit an initial pediatric study plan within sixty days after
an end-of-Phase 2 meeting or as may be agreed between the sponsor and FDA. Unless otherwise required by regulation, PREA does
not apply to any biological product for an indication for which orphan designation has been granted, except that the PREA will apply to
an original BLA for a new active ingredient that is orphan-designated if the biologic is a molecularly targeted cancer product intended
for the treatment of an adult cancer and is directed at a molecular target that the FDA determines to be substantially relevant to the
growth or progression of a pediatric cancer.

Within 60 days following submission of the
application, the FDA reviews a BLA submitted to determine if it is substantially complete before the agency accepts it for filing. The
FDA may refuse to file any BLA that it deems incomplete or not properly reviewable at the time of submission and may request additional
information. In this event, the BLA must be resubmitted with the additional information. Once a BLA has been accepted for filing, the
FDA’s goal is to review standard applications within ten months after the filing date, or, if the application qualifies for
priority review, six months after the FDA accepts the application for filing. In both standard and priority reviews, the review process
may also be extended by FDA requests for additional information or clarification. The FDA reviews a BLA to determine, among other things,
whether a product is safe, pure and potent and the facility in which it is manufactured, processed, packed or held meets standards designed
to assure the product’s continued safety, purity and potency. The FDA may convene an advisory committee to provide clinical insight
on application review questions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations
carefully when making decisions. Before approving a BLA, the FDA will typically inspect the facility or facilities where the product is
manufactured. The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance
with cGMP requirements and adequate to assure consistent production of the product within required specifications. Additionally, before
approving a BLA, the FDA will typically inspect one or more clinical sites to assure compliance with GCPs. If the FDA determines that
the application, manufacturing process or manufacturing facilities are not acceptable, it will outline the deficiencies in the submission
and often will request additional testing or information. Notwithstanding the submission of any requested additional information, the
FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval.

After the FDA evaluates a BLA and conducts inspections
of manufacturing facilities where the investigational product and/or its drug substance will be produced, the FDA may issue an approval
letter or a Complete Response letter. An approval letter authorizes commercial marketing of the product with specific prescribing information
for specific indications. A Complete Response letter will describe all of the deficiencies that the FDA has identified in the BLA, except
that where the FDA determines that the data supporting the application are inadequate to support approval, the FDA may issue the Complete
Response letter without first conducting required inspections, testing submitted product lots and/or reviewing proposed labeling. In issuing
the Complete Response letter, the FDA may recommend actions that the applicant might take to place the BLA in condition for approval,
including requests for additional information or clarification. The FDA may delay or refuse approval of a BLA if applicable regulatory
criteria are not satisfied, require additional testing or information and/or require post-marketing testing and surveillance to monitor
safety or efficacy of a product.

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If regulatory approval of a product is granted,
such approval will be granted for particular indications and may entail limitations on the indicated uses for which such product may be
marketed. For example, the FDA may approve the BLA with a risk evaluation and mitigation strategy (“REMS”) to ensure the benefits
of the product outweigh its risks. A REMS is a safety strategy to manage a known or potential serious risk associated with a product and
to enable patients to have continued access to such medicines by managing their safe use, and could include medication guides, physician
communication plans, or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization
tools. The FDA also may condition approval on, among other things, changes to proposed labeling or the development of adequate controls
and specifications. Once approved, the FDA may withdraw the product approval if compliance with pre-and post-marketing requirements is
not maintained or if problems occur after the product reaches the marketplace. The FDA may require one or more Phase 4 post-market
studies and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization, and may limit
further marketing of the product based on the results of these post-marketing studies.

NDA Submission and Review

Following successful completion of the required
clinical testing and the results of the pre-clinical and clinical studies, together with detailed CMC information and proposed labeling,
among other information, are submitted to the FDA as part of an NDA requesting approval to market the product for one or more indications.
In most cases, the submission of an NDA is subject to an application user fee. Under the Prescription Drug User Fee Act guidelines, the
FDA has a target of ten months from the date of “filing” of a standard NDA for a new molecular entity to review and act
on the submission. This review typically takes twelve months from the date the NDA is submitted to the FDA. Therapies that have Orphan
Drug Designation are granted Priority Review. Under the Prescription Drug User Fee Act guidelines, the FDA has a target of six months
from the date of “filing” of a standard NDA for a new molecular entity to review and act on the submission. This review typically
takes ten months from the date the NDA is submitted to the FDA.

The BPCA is a U.S. federal law enacted in 2002
(and made permanent in 2012) that incentivizes pharmaceutical companies to conduct pediatric clinical trials by offering six months of
additional market exclusivity for drugs studied in children. The program works through FDA-issued “Written Requests” that
specify needed pediatric studies. While the FDA may issue a Written Requests on their own, generally a company must request the Written
Requests by submitting a Proposed Pediatric Study Request to the FDA. If the FDA agrees to issue the Written Requests in response to the
Proposed Pediatric Study Request and the company completes these studies, they receive the exclusivity extension regardless of whether
the drug proves safe or effective in children.

In addition, under the Pediatric Research Equity
Act of 2003, certain NDAs or supplements to an NDA must contain data that is adequate to assess the safety and effectiveness
of the drug for the claimed indications in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric
subpopulation for which the product is safe and effective. The FDA may, on its own initiative or at the request of the applicant, grant
deferrals for submission of some or all pediatric data until after approval of the product for use in adults, or full or partial waivers
from the pediatric data requirements. Therapies that have Orphan Drug Designation are exempt from PREA.

The FDA also may require submission of a REMS plan
to ensure that the benefits of the drug outweigh its risks. REMS plans typically include medication guides, physician communication plans,
assessment plans, and/or elements to assure safe use, such as restricted distribution methods, patient registries, or other risk minimization
tools.

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The FDA conducts a preliminary review of all NDAs
within the first 60 days after submission, before accepting them for filing, to determine whether they are sufficiently complete
to permit substantive review. The FDA may request additional information rather than accept an NDA for filing. In this event, the application
must be resubmitted with the requested information. The resubmitted application is also subject to review before the FDA accepts it for
filing. After the submission is accepted for filing, the FDA begins a substantive review. The FDA reviews an NDA to determine whether
the drug is safe and effective and whether the facility in which it is manufactured, processed, packaged or held meets standards designed
to assure the product’s continued safety, quality and purity.

The FDA may refer an application for a novel drug
to an advisory committee. An advisory committee is a panel of independent experts, including clinicians and other scientific experts,
that reviews, evaluates and provides a recommendation as to whether the application should be approved and under what conditions. The
FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.

Before approving an NDA, the FDA typically will
inspect the facility or facilities where the product is manufactured. The FDA will not approve an application unless it determines that
the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the
product within required specifications. Additionally, before approving an NDA, the FDA may inspect one or more clinical trial sites to
assure compliance with GCP requirements.

After evaluating the NDA and all related information,
including the advisory committee recommendation, if any, and inspection reports regarding the manufacturing facilities and clinical trial
sites, the FDA may issue an approval letter or a Complete Response letter. A Complete Response letter generally contains a statement of
specific conditions that must be met in order to secure final approval of the NDA and may require additional clinical or pre-clinical
testing for the FDA to reconsider the application. Even after submission of this additional information, the FDA may decide that the application
does not satisfy the regulatory criteria for approval. If and when those conditions have been met to the FDA’s satisfaction, the
FDA will typically issue an approval letter. An approval letter authorizes commercial marketing of the drug with specific prescribing
information for specific indications.

Even if the FDA approves a product, it may limit
the approved indications for use of the product. It may also require that contraindications, warnings or precautions be included in the
product labeling or require that post-approval studies, including Phase 4 clinical trials, be conducted to further assess a drug’s
safety after approval. In addition, the FDA may mandate testing and surveillance programs to monitor the product after commercialization,
or impose other conditions, including distribution and use restrictions or other risk management mechanisms under a REMS. This can
materially affect the potential market and profitability of the product. The FDA may prevent or limit further marketing of a product based
on the results of post-marketing studies or surveillance programs. After approval, some types of alterations, such as adding new indications,
manufacturing changes and additional labeling claims, are subject to further testing requirements and FDA review and approval.

Additional Considerations for Gene Therapy Products

In addition to the regulations discussed above,
there are a number of additional considerations that apply to clinical trials involving the use of gene therapy. Supervision of human
gene transfer trials includes evaluation and assessment by an institutional biosafety committee, a local institutional committee that
reviews and oversees research utilizing recombinant or synthetic nucleic acid molecules at that institution. The IBC assesses the safety
of the research and identifies any potential risk to public health or the environment, and such review may result in some delay before
initiation of a clinical trial. The FDA has issued various guidance documents regarding gene therapies, which outline additional factors
that the FDA will consider at each of the above stages of development and relate to, among other things: the proper preclinical assessment
of gene therapies; the CMC information that should be included in an IND application; the proper design of tests to measure product efficacy
or potency in support of an IND or BLA application; and measures to observe delayed adverse effects in subjects who have been exposed
to investigational gene therapies when the risk of such effects is high. For instance, the FDA usually recommends that sponsors observe
all surviving subjects who receive treatment using gene therapies that are based on adeno-associated virus vectors in clinical trials
for potential gene therapy-related delayed adverse events for a minimum five-year period. FDA does not require the long-term tracking
to be complete prior to its review of the BLA.

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Expedited Development and Review Programs

The FDA offers a number of expedited development
and review programs for qualifying product candidates. The Fast Track program is intended to expedite or facilitate the process for reviewing
new products that meet certain criteria. Specifically, new products are eligible for Fast Track designation if they are intended to treat
a serious or life-threatening disease or condition and data demonstrate the potential to address unmet medical needs for the disease or
condition. Fast track designation applies to the combination of the product and the specific indication for which it is being studied.
The sponsor of a Fast Track product has opportunities for more frequent interactions with the review team during product development and,
once a BLA is submitted, the product may be eligible for priority review. A Fast Track product may also be eligible for rolling review,
where the FDA may consider for review sections of the BLA or NDA on a rolling basis before the complete application is submitted, if the
sponsor provides a schedule for the submission of the sections of the BLA or NDA, the FDA agrees to accept sections of the BLA or NDA
and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the
BLA or NDA. We have received Fast Track designation for PLX-200 for the treatment of CLN2 (for SOTERIA) and CLN3 (for STARLIGHT).

Additionally, products studied for their safety
and effectiveness in treating serious or life-threatening diseases or conditions may receive accelerated approval upon a determination
that the product has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint
that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible
morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability
or lack of alternative treatments. As a condition of accelerated approval, the FDA will generally require the sponsor to perform adequate
and well-controlled post-marketing clinical studies to verify and describe the anticipated effect on irreversible morbidity or mortality
or other clinical benefit. Under the Food and Drug Omnibus Reform Act of 2022, the FDA may require, as appropriate, that such
studies be underway prior to approval or within a specific time period after the date of approval for a product granted accelerated approval.
Products receiving accelerated approval may be subject to expedited withdrawal procedures if the sponsor fails to conduct the required
post-marketing studies or if such studies fail to verify the predicted clinical benefit. In addition, the FDA currently requires as a
condition for accelerated approval pre-approval of promotional materials, which could adversely impact the timing of the commercial launch
of the product.

In 2017, the FDA established a new RMAT designation
as part of its implementation of the 21st Century Cures Act (the “Cures Act”). The RMAT designation program is
intended to fulfill the Cures Act requirement that the FDA facilitate an efficient development program for, and expedite review of, any
drug that meets the following criteria: (i) the drug qualifies as a RMAT, which is defined as a cell therapy, therapeutic tissue
engineering product, human cell and tissue product, or any combination product using such therapies or products, with limited exceptions;
(ii) the drug is intended to treat, modify, reverse, or cure a serious or life-threatening disease or condition; and (iii) preliminary
clinical evidence indicates that the drug has the potential to address unmet medical needs for such a disease or condition. RMAT designation
provides all the benefits of breakthrough therapy designation, including more frequent meetings with the FDA to discuss the development
plan for the product candidate and eligibility for rolling review and priority review.

Products granted RMAT designation may also be eligible
for accelerated approval on the basis of a surrogate or intermediate endpoint reasonably likely to predict long-term clinical benefit,
or reliance upon data obtained from a meaningful number of sites, including through expansion to additional sites. When appropriate, the
FDA can permit fulfillment of post-approval requirements for an RMAT that has received accelerated approval through: the submission of
clinical evidence, preclinical studies, clinical trials, patient registries or other sources of real world evidence such as electronic
health records; the collection of larger confirmatory datasets; or post-approval monitoring of all patients treated with the therapy prior
to approval. A product intended to treat a serious or life-threatening disease or condition may also be eligible for breakthrough therapy
designation to expedite its development and review. A product can receive breakthrough therapy designation if preliminary clinical evidence
indicates that the product, alone or in combination with one or more other drugs or biologics, may demonstrate substantial improvement
over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical
development. The designation includes all of the Fast Track program features, as well as more intensive FDA interaction and guidance beginning
as early as Phase 1 and an organizational commitment to expedite the development and review of the product, including involvement
of senior managers.

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Any marketing application for a drug product submitted
to the FDA for approval, including a product with a Fast Track designation and/or breakthrough therapy designation, may be eligible for
other types of FDA programs intended to expedite the FDA review and approval process, such as priority review and accelerated approval.
A product is eligible for priority review if there is evidence it has the potential to provide a significant improvement in the treatment,
diagnosis or prevention of a serious disease or condition. For original BLAs and NDAs, priority review designation means the FDA’s
goal is to take action on the marketing application within six months of the 60-day filing date (as compared to ten months under
standard review). We have not sought priority review for any of our product candidates to date, but may do so in the future.

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

Orphan Drug Designation and Exclusivity

Under the Orphan Drug Act of 1983, the
FDA may grant orphan drug designation to a product candidate intended to treat a rare disease or condition, which is generally a disease
or condition that affects fewer than 200,000 individuals in the United States, or 200,000 or more individuals in the United States
for which there is no reasonable expectation that the cost of developing and making available in the United States a drug or biologic
for this type of disease or condition will be recovered from sales in the United States for that product candidate. Orphan drug designation
must be requested before submitting a BLA or NDA. After the FDA grants orphan drug designation, the identity of the therapeutic agent
and its potential orphan use are disclosed publicly by the FDA. The orphan drug designation does not convey any advantage in, or
shorten the duration of, the regulatory review or approval process.

If a product that has orphan drug designation subsequently
receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to orphan drug
exclusive approval (or exclusivity), which means that the FDA may not approve any other applications to market the same product for the
same approved use or indication for seven years, except in limited circumstances, such as a showing of clinical superiority to the
product with orphan drug exclusivity by means of greater effectiveness, greater safety or providing a major contribution to patient care
or if the holder of the orphan drug exclusivity cannot assure the availability of sufficient quantities of the orphan drug to meet the
needs of patients with the same use or indication for which the already-approved or licensed product was approved or licensed. Orphan
drug exclusivity does not prevent the FDA from approving a different drug or biologic for the same disease or condition, or the same drug
or biologic for a different disease or condition. Among the other benefits of orphan drug designation are tax credits for certain research
and fee waivers.

A designated orphan drug may not receive orphan
drug exclusivity if it is approved for a use that is broader than the indication for which it received orphan drug designation. In addition,
exclusive marketing rights in the United States may be lost if the FDA later determines that the request for designation was materially
defective or if the manufacturer is unable to assure sufficient quantities of the product to meet the needs of patients with the rare
disease or condition.

There is some uncertainty with respect to the FDA’s
interpretation of the scope of orphan drug exclusivity. Historically, exclusivity was specific to the orphan indication for which the
drug was approved. As a result, the scope of exclusivity was interpreted as preventing approval of a competing product. However, in 2021,
the federal court in Catalyst Pharmaceuticals, Inc. v. Becerra suggested that orphan drug exclusivity covers the full scope of
the orphan-designated “disease or condition” regardless of whether a drug obtained approval for a narrower use.

Combination Therapy

Combination therapy is a treatment modality that
involves the use of two or more drugs to be used in combination to treat a disease or condition. If those drugs are combined in one dosage
form, such as one pill, that is known as a fixed dose combination product and it is reviewed pursuant to the FDA’s Combination Rule
at 21 CFR 300.50. The rule provides that two or more drugs may be combined in a single dosage form when each component contributes to
the claimed effects and the dosage of each component (amount, frequency, duration) is such that the combination is safe and effective
for a significant patient population requiring such concurrent therapy as defined in the labeling for the drug.

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But not all combination therapy falls under the
category of a fixed dose combination. For example, the FDA recognizes that two drugs in separate dosage forms and in separate packaging,
that otherwise might be administered as monotherapy for an indication, also may be used in combination for the same indication. In 2013,
the FDA issued guidance to assist sponsors that were developing the range of combination therapies that fall outside the category of fixed
dose combinations. That guidance provides recommendations and advice on such topics as: (i) assessment at the outset whether two
or more therapies are appropriate for use in combination; (ii) guiding principles for nonclinical and clinical development of the
combination; (iii) options for regulatory pathways to seek marketing approval of the combination; and (iv) post-marketing safety
monitoring and reporting obligations. Given the wide range of potential combination therapy variations, the FDA indicated it intends to
assess each potential combination on a case-by case basis and encouraged sponsors to engage in early and regular consultation with the
relevant review division at the agency throughout the development process for its proposed combination.

Post Approval Requirements

Any products manufactured or distributed by us
pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating
to record-keeping, reporting of adverse experiences, periodic reporting, product sampling and distribution, and advertising and promotion
of the product. After approval, most changes to the approved product, such as adding new indications or other labeling claims, are subject
to prior FDA review and approval. There also are continuing user fee requirements, under which the FDA assesses an annual program fee
for any marketed products. The FDA may impose a number of post-approval requirements as a condition of approval of an NDA or BLA. For
example, the FDA may require post-marketing testing, including Phase 4 clinical trials, and surveillance to further assess and monitor
the product’s safety and effectiveness after commercialization.

In addition, product manufacturers and their subcontractors
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 cGMPs, which impose certain procedural and documentation requirements upon us
and our third-party manufacturers. Changes to the manufacturing process are strictly regulated, and, depending on the significance of
the change, may require prior FDA approval before being implemented.

FDA regulations also require investigation and
correction of any deviations from cGMPs and impose reporting requirements upon us and any third-party manufacturers that we may decide
to use. Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain
compliance with cGMPs and other aspects of regulatory compliance.

The FDA may withdraw approval if compliance with
regulatory requirements and standards is not maintained or if problems occur after the product reaches the market. Later discovery of
previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes,
or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information; imposition
of post-market studies or clinical studies to assess new safety risks; or imposition of distribution restrictions or other restrictions
under a REMS program. Other potential consequences include, among other things:

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

●
fines, warning letters or holds on post-approval clinical studies;

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

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

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

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

●
the issuance of safety alerts, Dear Healthcare Provider letters, press releases and other communications containing warnings or other safety information about the product; or

●
injunctions or the imposition of civil or criminal penalties.

The FDA closely regulates the marketing, labeling,
advertising and promotion of biologics. A company can make only those claims relating to safety and efficacy, purity and potency that
are approved by the FDA and in accordance with the provisions of the approved label. The FDA and other agencies actively enforce the laws
and regulations prohibiting the promotion of off-label uses. Failure to comply with these requirements can result in, among other things,
adverse publicity, warning letters, corrective advertising and potential civil and criminal penalties. Physicians may prescribe legally
available products for uses that are not described in the product’s labeling and that differ from those tested by us and approved
by the FDA. Such off-label uses are common across medical specialties. Physicians may believe that such off-label uses are the best
treatment for many patients in varied circumstances. The FDA does not regulate the behavior of physicians in their choice of treatments.
The FDA does, however, restrict manufacturer’s communications on the subject of off-label use of their products.

Biosimilars and Reference Product Exclusivity

The Affordable Care Act (“ACA”) includes
a subtitle called the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”), which created an abbreviated
approval pathway for biological products that are highly similar, or “biosimilar,” to or interchangeable with an FDA-approved
reference biological product. The FDA has issued several guidance documents outlining an approach to review and approval of biosimilars.

Biosimilarity, which requires that there be no
clinically meaningful differences between the biological product and the reference product in terms of safety, purity, and potency, is
generally shown through analytical studies, animal studies, and a clinical study or studies. Interchangeability requires that a product
is biosimilar to the reference product and the product must demonstrate that it can be expected to produce the same clinical results as
the reference product in any given patient and, for products that are administered multiple times to an individual, the biologic and the
reference biologic may be alternated or switched after one has been previously administered without increasing safety risks or risks of
diminished efficacy relative to exclusive use of the reference biologic. A product shown to be biosimilar or interchangeable with an FDA-approved
reference biological product may rely in part on the FDA’s previous determination of safety and effectiveness for the reference
product for approval, which can potentially reduce the cost and time required to obtain approval to market the product. Complexities associated
with the larger, and often more complex, structures of biological products, as well as the processes by which such products are manufactured,
pose significant hurdles to implementation of the abbreviated approval pathway that are still being worked out by the FDA.

The FDA has issued guidance documents intended
to inform prospective applicants and facilitate the development of proposed biosimilars and interchangeable biosimilars, as well as to
describe the FDA’s interpretation of certain statutory requirements added by the BPCIA.

Under the BPCIA, an application for a biosimilar
product may not be submitted to the FDA until four years following the date that the reference product was first licensed by the
FDA. In addition, the approval of a biosimilar product may not be made effective by the FDA until 12 years from the date on
which the reference product was first licensed. During this 12-year period of exclusivity, another company may still market a competing
version of the reference product if the FDA approves a full BLA for the competing product containing that applicant’s own preclinical
data and data from adequate and well-controlled clinical trials to demonstrate the safety, purity and potency of its product. The BPCIA
also created certain exclusivity periods for biosimilars approved as interchangeable products. At this juncture, it is unclear whether
products deemed “interchangeable” by the FDA will, in fact, be readily substituted by pharmacies, which are governed by state
pharmacy law.

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A reference biologic is granted twelve years
of exclusivity from the time of first licensure of the reference product. The first biologic product submitted under the abbreviated approval
pathway that is determined to be interchangeable with the reference product has exclusivity against other biologics submitted under the
abbreviated approval pathway for the lesser of (i) one year after the first commercial marketing, (ii) 18 months after
approval if there is no legal challenge, (iii) 18 months after the resolution in the applicant’s favor of a lawsuit challenging
the biologics’ patents if an application has been submitted, or (iv) 42 months after the application has been approved
if a lawsuit is ongoing within the 42-month period.

A biological product can also obtain pediatric
market exclusivity in the United States. Pediatric exclusivity, if granted, adds six months to existing exclusivity periods
and patent terms. This six-month exclusivity, which runs from the end of other exclusivity protection or patent term, may be granted based
on the voluntary completion of a pediatric study in accordance with an FDA-issued “Written Request” for such a study.

The BPCIA is complex and continues to be interpreted
and implemented by the FDA. On December 20, 2020, Congress amended the Public Health Service Act (“PHSA”) as part
of the COVID-19 relief bill to further simplify the biosimilar review process by making it optional to show that conditions of use proposed
in labeling have been previously approved for the reference product, which used to be a requirement of the application. In addition, government
proposals have sought to reduce the 12-year reference product exclusivity period. Other aspects of the BPCIA, some of which may impact
the BPCIA exclusivity provisions, have also been the subject of recent litigation. As a result, the ultimate impact, implementation, and
impact of the BPCIA is subject to significant uncertainty.

As discussed below, the Inflation Reduction Act of 2022
(“IRA”) is a significant new law that intends to foster generic and biosimilar competition and to lower drug and biologic
costs.

Abbreviated New Drug Applications for Generic Drugs

In 1984, with passage of the Drug Price Competition
and Patent Term Restoration Act of 1984 (“Hatch-Waxman Amendments”) amending the FDCA, Congress authorized the FDA
to approve generic drugs that are the same as drugs previously approved by the FDA under the NDA provisions of the statute. To obtain
approval of a generic drug, an applicant must submit an abbreviated new drug application (“ANDA”) to the agency. Upon approval
of an ANDA, the FDA indicates that the generic product is “therapeutically equivalent” to the drug product previously approved
under an NDA, known as the reference listed drug (“RLD”), and it assigns a therapeutic equivalence rating to the approved
generic drug in its publication “Approved Drug Products with Therapeutic Equivalence Evaluations,” also referred to as the
“Orange Book.” Physicians and pharmacists consider the therapeutic equivalence rating to mean that a generic drug is fully
substitutable for the RLD. In addition, by operation of certain state laws and numerous health insurance programs, the FDA’s
designation of a therapeutic equivalence rating often results in substitution of the generic drug without the knowledge or consent of
either the prescribing physician or patient.

Under the Hatch-Waxman Amendments, the FDA may
not approve an ANDA until any applicable period of nonpatent exclusivity for the RLD has expired. The FDCA provides a period of five years
of data exclusivity for NDAs containing a new chemical entity. In cases where such exclusivity has been granted, an ANDA may not be filed
with the FDA until the expiration of five years unless the submission is accompanied by a Paragraph IV certification (discussed
further below), in which case the applicant may submit its application four years following the original product approval. The FDCA
also provides for a period of three years of exclusivity if the NDA includes reports of one or more new clinical investigations,
other than bioavailability or bioequivalence studies, that were conducted by or for the applicant and are essential to the approval of
the application. This three-year exclusivity period often protects changes to a previously approved drug product, such as a new dosage
form, route of administration, combination or indication.

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Hatch-Waxman Patent Certification and the 30 Month Stay

Upon approval of an NDA or a supplement thereto,
NDA sponsors are required to list with the FDA each patent with claims that cover the applicant’s product or a method of using the
product. When an ANDA applicant files its application with the FDA, the applicant is required to certify to the FDA concerning any patents
listed for the reference product in the Orange Book, except for patents covering methods of use for which the ANDA applicant is not seeking
approval.

A certification that the new product will not infringe
the already approved product’s listed patents or that such patents are invalid or unenforceable is called a Paragraph IV certification.
If the applicant does not challenge the listed patents or indicate that it is not seeking approval of a patented method of use, the ANDA
application will not be approved until all the listed patents claiming the referenced product have expired. 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 accepted for filing by the FDA. The NDA and patent holders may then initiate a patent
infringement lawsuit in response to the notice of the Paragraph IV certification. The filing of a patent infringement lawsuit within
45 days after 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.

505(b)(2) New Drug Applications

As an alternative path to FDA approval for modifications
to formulations or uses of products previously approved by the FDA pursuant to an NDA, an applicant may submit an NDA under Section 505(b)(2) of
the FDCA. Section 505(b)(2) was enacted as part of the Hatch-Waxman Amendments and 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. If the 505(b)(2) applicant can establish that reliance on the FDA’s previous findings
of safety and effectiveness is scientifically and legally appropriate, it may eliminate the need to conduct certain preclinical studies
or clinical trials of the new product. The FDA may also require companies to perform additional bridging studies or measurements, including
clinical trials, to support the change from the previously approved reference drug. The FDA may then approve the new drug candidate for
all, or some, of the label indications for which the reference drug has been approved, as well as for any new indication sought by the
505(b)(2) applicant.

To the extent that a Section 505(b)(2) applicant
is relying on studies conducted for an already approved product, the applicant is required to certify to the FDA concerning any patents
listed for the approved product in the Orange Book to the same extent that an ANDA applicant would. As a result, approval of a 505(b)(2) NDA
can be stalled until all the listed patents claiming the referenced product have expired, until any non-patent exclusivity, such as exclusivity
for obtaining approval of a new chemical entity, listed in the Orange Book for the referenced product has expired, and, in the case of
a Paragraph IV certification and subsequent patent infringement suit, until the earlier of 30 months, settlement of the lawsuit
or a decision in the infringement case that is favorable to the Section 505(b)(2) applicant.

Patent Term Extension

In the United States, owners of relevant drug
patents may apply for up to a five-year patent extension, which permits patent term restoration as compensation for the patent term lost
during the FDA regulatory process. The length of the patent term extension is related to the length of time the drug is under regulatory
review. The time can be shortened if the FDA determines that the applicant did not pursue licensure with due diligence. The total patent
term after the extension may not exceed 14 years from the date of product licensure. Only one patent applicable to a licensed product
is eligible for extension and only those claims covering the product, a method for using it, or a method for manufacturing it may be extended
and the application for the extension must be submitted prior to the expiration of the patent in question. However, we may not be granted
an extension because of, for example, failing to exercise due diligence during the testing phase or regulatory review process, failing
to apply within applicable deadlines, failing to apply prior to expiration of relevant patents or otherwise failing to satisfy applicable
requirements. Some, but not all, foreign jurisdictions possess patent term extension or other additional patent exclusivity mechanisms
that may be more or less stringent and comprehensive than those of the United States.

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Rare Pediatric Disease Designation and Priority Review Vouchers

Under the FDCA, as amended, the FDA incentivizes
the development of drugs and biologics intended to treat conditions that meet the definition of a “rare pediatric disease,”
defined to mean a serious or life-threatening disease in which the serious or life-threatening manifestations primarily affect individuals
aged from birth to 18 years and the disease affects fewer than 200,000 individuals in the United States or affects more than
200,000 in the United States and for which there is no reasonable expectation that the cost of developing and making in the United States
a drug for such disease or condition will be received from sales in the United States of such drug. We have received rare pediatric
disease designation for PLX-300 for the treatment of Tay-Sachs and Sandhoff disease, Krabbe disease, and Niemann-Pick disease Type A and
B, and we may request such designation for future product candidates if the diseases they are intended to treat meet the definition of
a rare pediatric disease.

Other Healthcare Laws and Compliance Requirements

Pharmaceutical companies are subject to additional
healthcare regulation and enforcement by the federal government and by authorities in the states and foreign jurisdictions in which they
conduct their business. Such laws include, without limitation: the federal Anti-Kickback Statute (“AKS”); the federal False
Claims Act (“FCA”); the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) and similar
foreign, federal and state fraud, abuse and transparency laws.

The AKS prohibits, among other things, persons
and entities from knowingly and willfully soliciting, receiving, offering or paying remuneration, to induce, or in return for, either
the referral of an individual, or the purchase or recommendation of an item or service for which payment may be made under any federal
healthcare program. The term remuneration has been interpreted broadly to include anything of value. The AKS has been interpreted to apply
to arrangements between pharmaceutical manufacturers on one hand, and prescribers and purchasers on the other. The government often takes
the position that to violate the AKS, only one purpose of the remuneration need be to induce referrals, even if there are other legitimate
purposes for the remuneration. There are a number of statutory exceptions and regulatory safe harbors protecting some common commercial
activities from AKS prosecution, but they are drawn narrowly and practices that involve remuneration, such as consulting agreements, or
persons in a position to refer or recommend federally reimbursable healthcare business may be alleged to be intended to induce prescribing,
purchasing or recommending, and may be subject to scrutiny if they do not qualify for an exception or regulatory safe harbor. Qualifying
for a statutory exception or regulatory safe harbor requires satisfying all of the criteria for the exception or safe harbor. Our practices
may not in all cases meet all of the criteria for protection under a statutory exception or regulatory safe harbor. Failure to meet all
of the requirements of a particular applicable statutory exception or regulatory safe harbor does not make the conduct per se illegal
under the AKS but it does increase the risk of regulatory scrutiny. Ultimately, the legality of the arrangement will be evaluated on a
case-by-case basis based on a cumulative review of all of its facts and circumstances. A person or entity does not need to have actual
knowledge of the statute or specific intent to violate it in order to have committed a violation.

The FCA, which can be enforced through civil whistleblower
or qui tam actions, prohibits, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims
for payment of federal government funds, including in federal healthcare programs, that are false or fraudulent. Pharmaceutical and other
healthcare companies have been prosecuted under these laws for engaging in a variety of different types of conduct that caused the submission
of false claims to federal healthcare programs. Under the AKS, for example, a claim resulting from a violation of the AKS is deemed to
be a false or fraudulent claim for purposes of the FCA.

HIPAA created additional federal criminal statutes
that prohibit, among other things, executing a scheme to defraud any healthcare benefit program, including private third-party payors,
and making false statements relating to healthcare matters. A person or entity does not need to have actual knowledge of the healthcare
fraud statute implemented under HIPAA or specific intent to violate the statute in order to have committed a violation.

The FDCA addresses, among other things, the design,
production, labeling, promotion, manufacturing, and testing of drugs, biologics and medical devices, and prohibits such acts as the introduction
into interstate commerce of adulterated or misbranded drugs or devices. The PHSA also prohibits the introduction into interstate commerce
of unlicensed or mislabeled biological products.

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The U.S. federal Physician Payments Sunshine
Act requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid
or the Children’s Health Insurance Program, with specific exceptions, to annually report to the Centers for Medicaid &
Medicare Services (“CMS”) information related to payments or other transfers of value to various healthcare professionals
including physicians, physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists, certified nurse-midwives,
and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members. Beginning
on January 1, 2023, California Assembly Bill 1278 requires California physicians and surgeons to notify patients of the Open Payments
database established under the federal Physician Payments Sunshine Act.

We are also subject to federal price reporting
laws and federal consumer protection and unfair competition laws. Federal price reporting laws require manufacturers to calculate and
report complex pricing metrics to government programs, where such reported prices may be used in the calculation of reimbursement and/or
discounts on approved products. Federal consumer protection and unfair competition laws broadly regulate marketplace activities and activities
that potentially harm consumers.

We are also subject to additional similar U.S. state
and foreign law equivalents of each of the above federal laws, which, in some cases, differ from each other in significant ways, and may
not have the same effect, thus complicating compliance efforts. If our operations are found to be in violation of any of such laws or
any other governmental regulations that apply, we may be subject to penalties, including, without limitation, civil, criminal and administrative
penalties, damages, fines, exclusion from government-funded healthcare programs, such as Medicare and Medicaid or similar programs in
other countries or jurisdictions, integrity oversight and reporting obligations to resolve allegations of non-compliance, disgorgement,
individual imprisonment, contractual damages, reputational harm, diminished profits and the curtailment or restructuring of our operations.

Data Privacy and Security

Numerous state, federal, and foreign laws govern
the collection, dissemination, use, access to, confidentiality, and security of personal information, including health-related information.
In the United States, numerous federal and state laws and regulations, including state data breach notification laws, state health
information privacy laws, and federal and state consumer protection laws and regulations, govern the collection, use, disclosure, and
protection of health-related and other personal information and could apply to our operations or the operations of our partners.

For example, HIPAA, as amended by the Health Information
Technology for Economic and Clinical Health Act (“HITECH”), and their respective implementing regulations impose data privacy,
security, and breach notification obligations on certain health care providers, health plans, and health care clearinghouses, known as
covered entities, as well as their business associates and their covered subcontractors that perform certain services that involve using,
disclosing, creating, receiving, maintaining, or transmitting individually identifiable protected health information (“PHI”)
for or on behalf of such covered entities. These requirements imposed by HIPAA and HITECH on covered entities and business associates
include entering into agreements that require business associates protect PHI provided by the covered entity against improper use or disclosure,
among other things; following certain standards for the privacy of PHI, which limit the disclosure of a patient’s past, present,
or future physical or mental health or condition or information about a patient’s receipt of health care if the information identifies,
or could reasonably be used to identify, the individual; ensuring the confidentiality, integrity, and availability of all PHI created,
received, maintained, or transmitted in electronic form, to identify and protect against reasonably anticipated threats or impermissible
uses or disclosures to the security and integrity of such PHI; and reporting of breaches of PHI to individuals and regulators.

Entities that are found to be in violation of HIPAA
may be subject to significant civil, criminal, and administrative fines and penalties and/or additional reporting and oversight obligations
if required to enter into a resolution agreement and corrective action plan with HHS to settle allegations of HIPAA non-compliance. A
covered entity or business associate is also liable for civil money penalties for a violation that is based on an act or omission of any
of its agents, which may include a downstream business associate, as determined according to the federal common law of agency. HITECH
also increased the civil and criminal penalties applicable to covered entities and business associates and gave state attorneys general
new authority to file civil actions for damages or injunctions in federal courts to enforce HIPAA and seek attorneys’ fees and costs
associated with pursuing federal civil actions. To the extent that we submit electronic healthcare claims and payment transactions that
do not comply with the electronic data transmission standards established under HIPAA and HITECH, payments to us may be delayed or denied.

In addition, state health information privacy laws,
such as California’s Confidentiality of Medical Information Act and Washington’s My Health My Data Act, that govern the privacy
and security of health-related information, specifically, may apply even when HIPAA does not and impose additional requirements.

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Even when HIPAA and state health information privacy
laws do not apply, according to the FTC and state attorney general, violating consumers’ privacy rights or failing to take appropriate
steps to keep consumers’ personal information secure may constitute unfair acts or practices in or affecting commerce in violation
of Section 5(a) of the Federal Trade Commission Act and state consumer protection laws.

In addition, certain state laws, such as the California
Consumer Privacy Act of 2018 (“CCPA”), as amended by the California Privacy Rights Act of 2020, govern
the privacy and security of personal information, including health-related information in certain circumstances, some of which are more
stringent than HIPAA in various ways. Numerous other states have passed similar laws, but many differ from each other in significant ways
and may not have the same effect, thus complicating compliance efforts. The CCPA applies to personal data of consumers, business representatives,
and employees, and imposes obligations on certain businesses that do business in California, including to provide specific disclosures
in privacy notices, and affords rights to California residents in relation to their personal information. Health information falls under
the CCPA’s definition of personal information where it identifies, relates to, describes, or is reasonably capable of being associated
with or could reasonably be linked, directly or indirectly, with a particular consumer or household and is included under a new category
of personal information, “sensitive personal information,” which is offered greater protection. The CCPA and numerous other
comprehensive privacy laws that have passed or are being considered in other states, as well as at the federal and local levels, exempt
PHI that is subject to HIPAA; and others exempt covered entities and business associates subject to HIPAA altogether, further complicating
compliance efforts, and increasing legal risk and compliance costs for us and the third parties upon whom we rely.

Failure to comply with these laws, where applicable,
can result in the imposition of significant civil and/or criminal penalties and private litigation. Privacy and security laws, regulations,
and other obligations are constantly evolving, may conflict with each other to complicate compliance efforts, and can result in investigations,
proceedings, or actions that lead to significant civil and/or criminal penalties and restrictions on data processing.

Coverage and Reimbursement

In the United States and markets in other
countries, patients generally rely on third-party payors to reimburse all or part of the costs associated with their treatment. Adequate
coverage and reimbursement from governmental healthcare programs, such as Medicare and Medicaid, and commercial payors is critical to
new product acceptance. Our ability to successfully commercialize our product candidates will depend in part on the extent to which coverage
and adequate reimbursement for these products and related treatments will be available from government health administration authorities,
private health insurers and other organizations. Even if coverage is provided, the approved reimbursement amount may not be high enough
to allow it to establish or maintain pricing sufficient to realize a sufficient return on its investment. Government authorities and third-party
payors, such as private health insurers and health maintenance organizations, decide which medications they will pay for and establish
reimbursement levels.

Significant uncertainty exists as to the coverage
and reimbursement status of any pharmaceutical or biological product for which we obtain regulatory approval. Sales of any product, if
approved, depend, in part, on the extent to which such product will be covered by third-party payors, such as federal, state, and foreign
government healthcare programs, commercial insurance and managed healthcare organizations, and the level of reimbursement, if any, for
such product by third-party payors. Decisions regarding whether to cover any of our product candidates, if approved, the extent of coverage
and amount of reimbursement to be provided are made on a plan-by-plan basis. Further, no uniform policy for coverage and reimbursement
exists in the United States, and coverage and reimbursement can differ significantly from payor to payor. Third-party payors often
rely upon Medicare coverage policy and payment limitations in setting their own reimbursement rates, but also have their own methods and
approval process apart from Medicare determinations. As a result, the coverage determination process is often a time-consuming and costly
process that will require us to provide scientific and clinical support for the use of our product candidates to each payor separately,
with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance. Factors payors
consider in determining reimbursement are based on whether the product is:

●
a covered benefit under its health plan;

●
safe, effective and medically necessary;

●
cost-effective; and

●
neither experimental nor investigational.

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Third-party payors are increasingly challenging
the prices charged for medical products and services, examining the medical necessity and reviewing the cost effectiveness of pharmaceutical
or biological products, medical devices and medical services, in addition to questioning safety and efficacy. Adoption of price controls
and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further
limit sales of any product that receives approval. Decreases in third-party reimbursement for any product or a decision by a third-party
not to cover a product could reduce physician usage and patient demand for the product.

For products administered under the supervision
of a physician, obtaining coverage and adequate reimbursement may be particularly difficult because of the higher prices often associated
with such drugs. Additionally, separate reimbursement for the product itself or the treatment or procedure in which the product is used
may not be available, which may impact physician utilization. In addition, companion diagnostic tests require coverage and reimbursement
separate and apart from the coverage and reimbursement for their companion pharmaceutical or biological products. Similar challenges to
obtaining coverage and reimbursement, applicable to pharmaceutical or biological products, will apply to companion diagnostics.

In addition, the U.S. government, state legislatures
and foreign governments have continued implementing cost-containment programs, including price controls, restrictions on coverage and
reimbursement and requirements for substitution of generic products. The IRA provides CMS with significant new authorities intended to
curb drug costs and to encourage market competition. For the first time, CMS will be able to directly negotiate prescription drug prices
and to cap out-of-pocket costs. Each year, CMS will select and negotiate a preset number of high-spend drugs and biologics that are covered
under Medicare Part B and Part D that do not have generic or biosimilar competition. On August 29, 2023, HHS announced
the list of the first ten drugs subject to price negotiations. These price negotiations occurred in 2024. In January 2025, CMS announced
a list of 15 additional Medicare Part D drugs that will be subject to price negotiations. The IRA also provides a new “inflation
rebate” covering Medicare patients that took effect in 2023 and is intended to counter certain price increases in prescriptions
drugs. The inflation rebate provision requires drug manufacturers to pay a rebate to the federal government if the price for a drug or
biologic under Medicare Part B and Part D increases faster than the rate of inflation. To support biosimilar competition, beginning
in October 2022, qualifying biosimilars may receive a Medicare Part B payment increase for a period of five years. Separately,
if a biologic drug for which no biosimilar exists delays a biosimilar’s market entry beyond two years, CMS will be authorized
to subject the biologics manufacturer to price negotiations intended to ensure fair competition. Notwithstanding these provisions, the
IRA’s impact on commercialization and competition remains largely uncertain.

In addition, net prices for drugs may be reduced
by mandatory discounts or rebates required by government healthcare programs or private payors and by any future relaxation of laws that
presently restrict imports of drugs from countries where they may be sold at lower prices than in the United States. Increasingly,
third-party payors are requiring that drug companies provide them with predetermined discounts from list prices and are challenging the
prices charged for medical products. We cannot be sure that reimbursement will be available for any product candidate that we may commercialize
and, if reimbursement is available, the level of reimbursement. In addition, many pharmaceutical manufacturers must calculate and report
certain price reporting metrics to the government, such as average sales price and best price. Penalties may apply in some cases when
such metrics are not submitted accurately and timely. Further, these prices for drugs may be reduced by mandatory discounts or rebates
required by government healthcare programs.

Finally, in some foreign countries, the proposed
pricing for a drug must be approved before it may be lawfully marketed. The requirements governing drug pricing vary widely from country
to country. For example, the EU provides options for its member states to restrict the range of medicinal products for which their national
health insurance systems provide reimbursement and to control the prices of medicinal products for human use. To obtain reimbursement
or pricing approval, some of these countries may require the completion of clinical trials that compare the cost effectiveness of a particular
product candidate to currently available therapies. A member state may approve a specific price for the medicinal product or it may instead
adopt a system of direct or indirect controls on the profitability of the company placing the medicinal product on the market. There can
be no assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allow favorable
reimbursement and pricing arrangements for any of our product candidates. Historically, products launched in the EU do not follow price
structures of the United States and generally prices tend to be significantly lower.

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Healthcare Reform

The United States and some foreign jurisdictions
are considering or have enacted a number of reform proposals to change the healthcare system. There is significant interest in promoting
changes in healthcare systems with the stated goals of containing healthcare costs, improving quality or expanding access. In the United States,
the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by federal and state initiatives,
including those designed to limit the pricing, coverage, and reimbursement of pharmaceutical and biopharmaceutical products, especially
under government-funded health care programs, and increased governmental control of drug pricing.

The ACA, which was enacted in March 2010,
substantially changed the way healthcare is financed by both governmental and private insurers in the United States, and significantly
affected the pharmaceutical industry. The ACA contains a number of provisions of particular import to the pharmaceutical and biotechnology
industries, including, but not limited to, those governing enrollment in federal healthcare programs, a new methodology by which rebates
owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted
or injected, and annual fees based on pharmaceutical companies’ share of sales to federal health care programs. Since its enactment,
there have been judicial and Congressional challenges to certain aspects of the ACA, and we expect there will be additional challenges
and amendments to the ACA in the future. For example, the IRA, among other things, extends enhanced subsidies for individuals purchasing
health insurance coverage in ACA marketplaces through plan year 2025. The IRA also eliminates the “donut hole” under the Medicare
Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and creating a new manufacturer
discount program.

Other legislative changes have been proposed and
adopted since the ACA was enacted, including automatic aggregate reductions of Medicare payments to providers of on average 2% per fiscal
year as part of the federal budget sequestration under the Budget Control Act of 2011. These reductions went into effect in
April 2013 and, due to subsequent legislative amendments, will remain in effect until 2032 unless additional action is taken by Congress.
In addition, the Bipartisan Budget Act of 2018, among other things, amended the Medicare Act (as amended by the ACA) to increase
the point-of-sale discounts that manufacturers must agree to offer under the Medicare Part D coverage discount program from 50% to
70% off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the
manufacturer’s outpatient drugs being covered under Medicare Part D.

Moreover, there has recently been heightened governmental
scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several Congressional inquiries
and proposed and enacted federal and state measures designed to, among other things, reduce the cost of prescription drugs, bring more
transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program
reimbursement methodologies for drug products. For example, in May 2019, CMS adopted a final rule allowing Medicare Advantage Plans
the option to use step therapy for Part B drugs, permitting Medicare Part D plans to apply certain utilization controls to new
starts of five of the six protected class drugs, and requiring the Explanation of Benefits for Part D beneficiaries to disclose drug
price increases and lower cost therapeutic alternatives, which went into effect on January 1, 2021. In May 2025, the Trump Administration
renewed the idea of international reference pricing through an executive order entitled “Delivering Most-Favored-Nation Prescription
Drug Pricing to American Patients,” which, among other things, directs the HHS and other agencies to communicate most-favored-nation
price targets to pharmaceutical manufacturers to bring prices for U.S. patients in line with comparably developed nations and to facilitate
direct-to-consumer purchasing programs. The HHS subsequently issued guidance indicating the MFN target price will be the lowest price
paid in an Organisation for Economic Co-operation and Development country with a gross domestic product (“GDP”) per capita
of at least 60% of the U.S. GDP per capital. In addition, in December 2025, CMS proposed new drug payment models to lower drug prices
for Medicare beneficiaries; under the models, CMS would explore potential adjustments to Medicare drug inflation rebate calculations by
comparison to international drug pricing information. It is currently unclear whether and to what extent these measures will be implemented
and what impact any such implementation would have on our business.

Notwithstanding the IRA, continued legislative
and enforcement interest exists in the United States with respect to specialty drug pricing practices. Specifically, we expect government
authorities to continue pushing for transparency to drug pricing, reducing the cost of prescription drugs under Medicare, reviewing the
relationship between pricing and manufacturer patient programs, and reforming government program reimbursement methodologies for drugs.

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Individual states in the United States have
also become increasingly active in passing legislation and implementing regulations designed to control pharmaceutical and biological
product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain drug access and marketing cost
disclosure and transparency measures, and designed to encourage importation from other countries and bulk purchasing. Legally mandated
price controls on payment amounts by third-party payors or other restrictions could harm our business, financial condition, results of
operations and prospects. In addition, regional healthcare authorities and individual hospitals are increasingly using bidding procedures
to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other healthcare programs.
This could reduce the ultimate demand for its drugs or put pressure on its drug pricing, which could negatively affect our business, financial
condition, results of operations and prospects.

Other Government Regulation Outside of the United States

In addition to regulations in the United States,
we are subject to a variety of regulations in other jurisdictions governing, among other things, research and development, clinical trials,
testing, manufacturing, safety, efficacy, quality control, labeling, packaging, storage, record keeping, distribution, reporting, export
and import, advertising, marketing and other promotional practices involving biological products as well as authorization, approval as
well as post-approval monitoring and reporting of our products. Because biologically sourced raw materials are subject to unique contamination
risks, their use may be restricted in some countries.

Whether or not we obtain FDA approval for a product,
we must obtain the requisite approvals from regulatory authorities in foreign countries prior to the commencement of clinical trials or
marketing of the product in those countries. Certain countries outside of the United States have a similar process that requires
the submission of a clinical trial application much like the IND prior to the commencement of human clinical trials.

The requirements and process governing the conduct
of clinical trials, including requirements to conduct additional clinical trials, product licensing, safety reporting, post-authorization
requirements, marketing and promotion, interactions with healthcare professionals, pricing and reimbursement may vary widely from country
to country. No action can be taken to market any product in a country until an appropriate approval application has been approved by the
regulatory authorities in that country. The current approval process varies from country to country, and the time spent in gaining approval
varies from that required for FDA approval. In certain countries, the sales price of a product must also be approved. The pricing review
period often begins after market approval is granted. Even if a product is approved by a regulatory authority, satisfactory prices may
not be approved for such product, which would make launch of such products commercially unfeasible in such countries.

Regulation in the European Union

European Data Laws

The processing of personal data, including health-related
personal data in the European Economic Area (“EEA”) is mainly governed by the provisions of the European General Data Protection
Regulation (EU) 2016/679 (“GDPR”), and related data protection laws in individual EEA countries. In the UK, the processing
of personal data is mainly governed by the GDPR as incorporated into UK law pursuant to the European Union (Withdrawal) Act 2018 (the
UK GDPR). The GDPR and UK GDPR impose. The GDPR imposes a number of strict obligations and requirements for the processing, including
collecting, analyzing and transferring, of personal data of individuals in the EEA or in the UK, in particular with respect to health
data from clinical trials and adverse event reporting. The GDPR and UK GDPR include requirements relating to the legal basis of the processing
(such as consent of the individuals to whom the personal data relates), the information provided to the individuals prior to processing
their personal data, the personal data breaches which may have to be notified to the national data protection authorities and data subjects,
the measures to be taken when engaging processors, and obligations relating to the security and confidentiality of the personal data.
EEA countries may also impose additional requirements in relation to the processing of health, genetic and biometric data through their
national legislation.

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In addition, the GDPR imposes specific restrictions
on the transfer of personal data to countries outside of the EEA that are not considered by the European Commission (“EC”)
to provide an adequate level of data protection. Appropriate safeguards are required to enable such transfers. Among the appropriate safeguards
that can be used, the data exporter may use the standard contractual clauses (“SCCs”). When relying on the appropriate safeguards,
data exporters, with the assistance of the data importers, are also required to conduct a transfer risk assessment to verify if anything
in the law and/or practices of the third country may impinge on the effectiveness of the safeguards in the context of the transfer at
stake and, if so, to identify and adopt supplementary measures that are necessary to bring the level of protection of the data transferred
to the EU standard of essential equivalence. Where no supplementary measure is suitable, the data exporter should avoid, suspend or terminate
the transfer. With regard to the transfer of data from the EEA to the United States, on July 10, 2023, the EC adopted its adequacy
decision for the EU-US Data Privacy Framework. On the basis of the new adequacy decision, personal data can flow from the EEA to U.S. companies
participating in the framework.

With regard to the transfer of data from the EEA
to the UK, based on the EC’s adequacy decision of June 28, 2021 and subsequent renewals, personal data may continue to flow freely
from the EEA to the UK on the basis that the UK is deemed to provide an adequate level of data protection until December 27, 2031. The
adequacy decisions will automatically expire, unless renewed.

With respect to transfers from the UK to other
countries, these transfers are also subject to specific transfer rules under the UK regime. These UK international transfer rules broadly
mirror the EU GDPR rules.

On February 2, 2022, the UK Secretary of State
laid before the UK Parliament the international data transfer agreement (“IDTA”) and the international data transfer addendum
to the EC’s standard contractual clauses for international data transfers (“UK Addendum”) and a document setting out
transitional provisions. The IDTA and UK Addendum came into force on March 21, 2022 and are the primary UK-approved mechanisms for putting
in place appropriate safeguards for UK restricted transfers, subject to transitional arrangements for legacy SCCs. Regarding transfers
from the UK to the EEA, the UK Information Commissioner’s Office (“ICO”) guidance indicates that organizations do not
need new arrangements. With regard to the transfer of personal data from the UK to the United States, the UK government has adopted an
adequacy decision for the UK Extension to the EU-US Data Privacy Framework, the UK-US Data Bridge, which came into force on October 12,
2023. The UK-US Data Bridge recognizes the United States as offering an adequate level of data protection where the recipient is a U.S.
organization certified to the EU-US Data Privacy Framework and participating in the UK Extension to the EU-US Data Privacy Framework.

Failure to comply with the requirements of the
GDPR or UK GDPR and the related national data protection laws of the EEA countries may result in significant monetary fines for noncompliance
of up to €20 million or £17.5 million (as applicable), 4% of the total worldwide annual turnover (for higher-tier infringements).
This is enforced by ICO and is entirely separate from fines under EU GDPR. In addition, violations of national laws can trigger additional,
administrative penalties, investigations, corrective orders, temporary or definitive bans, and, in some jurisdictions, and a number of
criminal offenses for organizations and, in certain cases, their directors and officers, as well as civil liability claims from individuals
whose personal data was processed.

Data protection authorities from the different
EEA countries may still implement certain variations, enforce the GDPR and national data protection laws differently, and introduce additional
national regulations and guidelines, which adds to the complexity of processing personal data in the EEA.

Furthermore, there are specific requirements relating
to processing health data from clinical trials, including public disclosure obligations provided in the EU Clinical Trials Regulation No.
536/2014 (“CTR”), the EMA disclosure initiatives and voluntary commitments by industry. Failure to comply with these obligations
could lead to government enforcement actions and significant penalties against us, harm to our reputation, and adversely impact our business
and operating results.

Drug and Biologic Development Process

Regardless of where they are conducted, all clinical
trials included in applications for marketing authorization (“MA”) for human medicines in the EU/EEA must have been carried
out in accordance with EU regulations. This means that clinical trials conducted in the EU/EEA have to comply with EU clinical trial legislation
but also that clinical trials conducted outside the EU/EEA have to comply with ethical principles equivalent to those set out in the EEA,
including adhering to international good clinical practice and the Declaration of Helsinki. The conduct of clinical trials in the EU is
governed by the CTR, which entered into force on January 31, 2022. The CTR replaced the Clinical Trials Directive 2001/20/EC, (“Clinical
Trials Directive”) and introduced a complete overhaul of the existing regulation of clinical trials for medicinal products in the
EU.

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Under the CTR, a sponsor is able to submit a single
application for approval of a clinical trial through a centralized EU clinical trials portal (the “CTIS”). One national regulatory
authority (the reporting EU member state proposed by the applicant) will take the lead in validating and evaluating the application consult
and coordinate with the other concerned EU Member States. If an application is rejected, it may be amended and resubmitted through the
EU clinical trials portal. If an approval is issued, the sponsor may start the clinical trial in all concerned EU Member States. However,
a concerned EU member state may in limited circumstances declare an “opt-out” from an approval and prevent the clinical trial
from being conducted in such member state. The CTR also aims to streamline and simplify the rules on safety reporting, and introduces
enhanced transparency requirements such as mandatory submission of a summary of the clinical trial results to the EU database, including
a layperson’s summary. Since January 31, 2023, submission of initial clinical trial applications via CTIS is mandatory and
CTIS serves as the single entry point for submission of clinical trial-related information and data. As of January 31, 2025, all
ongoing trials approved under the former Clinical Trials Directive need to comply with the CTR and have to be transitioned to CTIS.

Under the CTR, national laws, regulations, and
the applicable GCP and Good Laboratory Practice standards must also be respected during the conduct of the trials, including the International
Council for Harmonization of Technical Requirements for Pharmaceuticals for Human Use guidelines on Good Clinical Practice and the ethical
principles that have their origin in the Declaration of Helsinki. Under the current regime all suspected unexpected serious adverse reactions
to the investigated drug that occur during the clinical trial must be reported to the National Competent Authority and to the Ethics Committees
of the EU member state where they occur.

During the development of a medicinal product,
the EMA and national regulators within the EU provide the opportunity for dialogue and guidance on the development program. At the EMA
level, this is usually done in the form of scientific advice, which is given by the Committee for Medicinal Products for Human Use (“CHMP”)
on the recommendation of the Scientific Advice Working Party. A fee is incurred with each scientific advice procedure, but is significantly
reduced for designated orphan medicines. Advice from the EMA is typically provided based on questions concerning, for example, quality
(CMC testing), nonclinical testing and clinical studies, and pharmacovigilance plans and risk-management programs. Advice is not legally
binding with regard to any future MAA of the product concerned.

Drug Marketing Authorization

In the EEA, after completion of all required clinical
testing, pharmaceutical products may only be placed on the market after obtaining an MA. To obtain an MA of a drug under EU regulatory
systems, an applicant can submit an MAA through, amongst others, a centralized or decentralized procedure.

To be used or sold in the UK, a drug must have
an effective MA granted by the MHRA under the Human Medicines Regulations 2012 (SI 2012/1916), as amended. MA applications are submitted
electronically via the MHRA Submissions Portal. Under the MHRA’s national assessment procedure, the MHRA generally aims to reach
a decision within 210 “clock-on” days, excluding any “clock-stops” while the applicant prepares responses
to MHRA questions.

On August 30, 2023, the MHRA published detailed
guidance on its recently announced new International Recognition Procedure (“IRP”) for MAAs. The IRP applies since January 1,
2024 and replaces existing EU reliance procedures to apply for authorizations from seven international regulators (e.g., Health
Canada, Swiss Medic, FDA, EMA, among others). The IRP allows medicinal products approved in other jurisdictions that meet certain criteria
to undergo a fast-tracked MHRA review to obtain and/or update a MA in the UK. Applicants can submit initial MAAs to the IRP but the
procedure can also be used throughout the lifecycle of a product for post-authorization procedures including line extensions, variations
and renewals.

Centralized Authorization Procedure

The centralized procedure provides for the grant
of a single MA that is issued by the EC following the scientific assessment of the application by the EMA that is valid for all EU Member
States as well as in the three additional EEA Member States (Norway, Iceland and Liechtenstein). The centralized procedure is compulsory
for specific medicinal products, including for medicines developed by means of certain biotechnological processes, products designated
as orphan medicinal products, advanced therapy medicinal products (gene therapy, somatic cell therapy, or tissue engineered medicines)
and medicinal products with a new active substance indicated for the treatment of certain diseases (HIV/AIDS, cancer, neurodegenerative
disorders, diabetes, auto-immune diseases and other immune dysfunctions, and viral diseases). For medicinal products containing a new
active substance not yet authorized in the EEA before May 20, 2004 and indicated for the treatment of other diseases, medicinal products
that constitute significant therapeutic, scientific or technical innovations or for which the grant of a MA through the centralized procedure
would be in the interest of public health at EU level, an applicant may voluntarily submit an application for a MA through the centralized
procedure.

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Under the centralized procedure, the CHMP is responsible
for conducting the initial assessment of a drug. The CHMP is also responsible for several post-authorization and maintenance activities,
such as the assessment of modifications or extensions to an existing MA. Under the centralized procedure, the timeframe for the evaluation
of an MAA by the EMA’s CHMP is, in principle, 210 days from receipt of a valid MAA. However, this timeline excludes clock
stops, when additional written or oral information is to be provided by the applicant in response to questions asked by the CHMP, so the
overall process typically takes a year or more, unless the application is eligible for an accelerated assessment. Accelerated evaluation
might be granted by the CHMP in exceptional cases, when a medicinal product is expected to be of a major public health interest, particularly
from the point of view of therapeutic innovation. Upon request, the CHMP can reduce the time frame to 150 days if the applicant provides
sufficient justification for an accelerated assessment. The CHMP will provide a positive opinion regarding the application only if it
meets certain quality, safety and efficacy requirements. This opinion is then transmitted to the EC, which has the ultimate authority
for granting MA within 67 days after receipt of the CHMP opinion.

Decentralized Authorization Procedure

Medicines that fall outside the mandatory scope
of the centralized procedure have three routes to authorization:

(i)
they can be authorized under the centralized procedure if they concern a significant therapeutic, scientific or technical innovation, or if their authorization would be in the interest of public health;

(ii)
they can be authorized under a decentralized procedure where an applicant applies for simultaneous authorization in more than one EU member state; or

(iii)
they can be authorized in an EU member state in accordance with that state’s national procedures and then be authorized in other EU countries by a procedure whereby the countries concerned agree to recognize the validity of the original, national MA (mutual recognition procedure).

The decentralized procedure permits companies to
file identical MA applications for a medicinal product to the competent authorities in various EU Member States simultaneously if such
medicinal product has not received marketing approval in any EU Member State before. This procedure is available for pharmaceutical products
not falling within the mandatory scope of the centralized procedure. The competent authority of a single EU Member State, the reference
member state, is appointed to review the application and provide an assessment report. The competent authorities of the other EU Member
States, the concerned member states, are subsequently required to grant a MA for their territories on the basis of this assessment. The
only exception to this is where the competent authority of an EU Member State considers that there are concerns of potential serious risk
to public health, the disputed points are subject to a dispute resolution mechanism and may eventually be referred to the EC, whose decision
is binding for all EU Member States.

Risk Management Plan

All new MAAs must include a Risk Management Plan
(“RMP”) describing the risk management system that the company will put in place and documenting measures to prevent or minimize
the risks associated with the product. RMPs are continually modified and updated throughout the lifetime of the medicine as new information
becomes available. An updated RMP must be submitted: (i) at the request of EMA or a national competent authority, or (ii) whenever
the risk-management system is modified, especially as the result of new information being received that may lead to a significant change
to the benefit-risk profile or as a result of an important pharmacovigilance or risk-minimization milestone being reached. The regulatory
authorities may also impose specific obligations as a condition of the MA. Since October 20, 2023, all RMPs for centrally authorized
products are published by the EMA, subject only to limited redactions.

MA Validity Period

MAs have an initial duration of five years.
After these five years, the authorization may subsequently be renewed on the basis of a reevaluation of the risk-benefit balance.
Once renewed, the MA is valid for an unlimited period unless the EC or the national competent authority decides, on justified grounds
relating to pharmacovigilance, to proceed with only one additional five-year renewal. Applications for renewal must be made to the EMA
at least nine months before the five-year period expires.

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Any authorization which is not followed by the
actual placing of the drug on the EU market (in case of centralized procedure) or on the market of the authorizing member state within
three years after authorization ceases to be valid.

For the UK, the period of three years during
which the drug has not been marketed in Great Britain will be restarted from the date of conversion to a Great Britain MA. Following
Windsor Framework changes, which became effective January 1, 2025, European Commission Union authorizations are no longer valid in Northern
Ireland and centrally authorized products are instead authorized by the MHRA under UK-wide marketing authorizations; existing licenses
for product licensed by the MHRA that covers Great Britain only become geographically valid UK-wide while retaining their license number/prefix.

On the other hand, for the EU, in the case the
drug has been marketed in the UK, the placing on the UK market before the end of the period starting when the UK left the EU on January 31,
2020 and ending on December 31, 2020 (the “Brexit Transition Period”) will be taken into account. If, after the end of
the Brexit Transition Period, the drug is not placed on any other market of the remaining member states of the EU, the three-year period
will start running from the last date the drug was placed on the UK market before the end of the Brexit Transition Period.

Advanced Therapy Medicinal Products

In the EU, medicinal products, including advanced
therapy medicinal products (“ATMPs”) are subject to extensive pre-and post-market regulation by regulatory authorities at
both the EU and national levels. ATMPs comprise gene therapy products, somatic cell therapy products and tissue engineered products, which
are genes, cells or tissues that have undergone substantial manipulation and that are administered to human beings in order to cure, diagnose
or prevent diseases or regenerate, repair or replace a human tissue. Pursuant to Regulation (EC) No 1394/2007, the CAT is responsible
in conjunction with the CHMP for the evaluation of ATMPs. The CHMP and CAT are also responsible for providing guidelines on ATMPs. These
guidelines provide additional guidance on the factors that the EMA will consider in relation to the development and evaluation of ATMPs
and include, among other things, the preclinical studies required to characterize ATMPs. Although such guidelines are not legally binding,
compliance with them is often necessary to gain and maintain approval for product candidates.

In addition to the mandatory RMP, the holder of
a MA for an ATMP must put in place and maintain a system to ensure that each individual product and its starting and raw materials, including
all substances coming into contact with the cells or tissues it may contain, can be traced through the sourcing, manufacturing, packaging,
storage, transport and delivery to the relevant healthcare institution where the product is used.

Exceptional Circumstances/Conditional Approval

Similar to accelerated approval regulations in
the United States, conditional MAs can be granted in the EU in exceptional circumstances. A conditional MA can be granted for medicinal
products where, although comprehensive clinical data referring to the safety and efficacy of the medicinal product have not been supplied,
a number of criteria are fulfilled: (i) the benefit/risk balance of the product is positive, (ii) it is likely that the applicant
will be in a position to provide the comprehensive clinical data, (iii) unmet medical needs will be fulfilled by the grant of the
MA and (iv) the benefit to public health of the immediate availability on the market of the medicinal product concerned outweighs
the risk inherent in the fact that additional data are still required. Once a conditional MA has been granted, the MA holder must fulfil
specific obligations within defined timelines. A conditional MA is valid for one year and must be renewed annually, but it can be converted
into a standard MA once the MA holder fulfils the obligations imposed and the complete data confirm that the medicine’s benefits
continue to outweigh its risks.

Data and Market Exclusivity

As in the United States, it may be possible
to obtain a period of market and/or data exclusivity in the EU that would have the effect of postponing the entry into the marketplace
of a competitor’s generic, hybrid or biosimilar product (even if the pharmaceutical product has already received a MA) and prohibiting
another applicant from relying on the MA holder’s pharmacological, toxicological and clinical data in support of another MA for
the purposes of submitting an application, obtaining MA or placing the product on the market. Innovative medicinal products, referred
to as New Chemical Entities (“NCE”), approved in the EU qualify for eight years of data exclusivity and 10 years
of marketing exclusivity.

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An additional non-cumulative one-year period of
marketing exclusivity is possible if during the data exclusivity period (the first eight years of the 10-year marketing exclusivity
period), the MA holder obtains an authorization for one or more new therapeutic indications that are deemed to bring a significant clinical
benefit compared to existing therapies.

The data exclusivity period begins on the date
of the product’s first MA in the EU. After eight years, a generic product application may be submitted, and generic companies
may rely on the MA holder’s data. However, a generic product cannot launch until two years later (or a total of 10 years
after the first MA in the EU of the innovator product), or three years later (or a total of 11 years after the first MA in the
EU of the innovator product) if the MA holder obtains MA for a new indication with significant clinical benefit within the eight-year
data exclusivity period. Additionally, another noncumulative one-year period of data exclusivity can be added to the eight years
of data exclusivity where an application is made for a new indication for a well-established substance, provided that significant pre-clinical
or clinical studies were carried out in relation to the new indication. Another year of data exclusivity may be added to the eight years,
where a change of classification of a pharmaceutical product has been authorized on the basis of significant pre-trial tests or clinical
trials (when examining an application by another applicant for or holder of market authorization for a change of classification of the
same substance the competent authority will not refer to the results of those tests or trials for one year after the initial change was
authorized).

Products may not be granted data exclusivity since
there is no guarantee that a product will be considered by the EU’s regulatory authorities to include a NCE. Even if a compound
is considered to be a NCE and the MA applicant is able to gain the prescribed period of data exclusivity, another company nevertheless
could also market another version of the medicinal product if such company can complete a full MAA with their own complete database of
pharmaceutical tests, preclinical studies and clinical trials and obtain MA of its product.

On April 26, 2023, the EC submitted a proposal
for the reform of the European pharmaceutical legislation and negotiations are still ongoing. The timing for finalization of these negotiations
and entry into force are unclear.

The current drafts envisage:

●
a shortening of the periods of data exclusivity from eight to six years (with transferrable vouchers for an additional year of market protection as an incentive for the development of new antibiotics),

●
earlier regulatory guidance and extension of market exclusivity for orphan medicines (depending on certain conditions),

●
four-year data exclusivity for additional indications of existing products, and

rules governing the availability of products (including
shortage prevention plans and some supply obligations for manufacturers).

Orphan Designation and Exclusivity

The criteria for designating an orphan medicinal
product in the EU are similar in principle to those in the United States. The EMA grants orphan drug designation if the medicinal
product is intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition affecting no
more than five in 10,000 persons in the EU (prevalence criterion). In addition, Orphan Drug Designation can be granted if, for economic
reasons, the medicinal product would be unlikely to be developed without incentives and if there is no other satisfactory method approved
in the EU of diagnosing, preventing, or treating the condition, or if such a method exists, the proposed medicinal product is a significant
benefit to patients affected by the condition. An application for orphan drug designation (which is not a MA, as not all orphan-designated
medicines reach the authorization application stage) must be submitted first before an application for MA of the medicinal product is
submitted. The applicant will receive a fee reduction for the MAA if the orphan drug designation has been granted, but not if the designation
is still pending at the time the MA is submitted, and sponsors must submit an annual report to EMA summarizing the status of development
of the medicine. Orphan drug designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval
process. Designated orphan medicines are eligible for conditional MA.

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The EMA’s Committee for Orphan Medicinal
Products reassesses the orphan drug designation of a product in parallel with the review for a MA; for a product to benefit from market
exclusivity it must maintain its orphan drug designation at the time of MA review by the EMA and approval by the EC. Additionally,
any MA granted for an orphan medicinal product must only cover the therapeutic indication(s) that are covered by the orphan drug
designation. Upon the grant of an MA, orphan drug designation provides up to ten years of market exclusivity in the orphan indication.

During the 10-year period of market exclusivity,
with a limited number of exceptions, the regulatory authorities of the EU Member States and the EMA may not accept applications for MA,
accept an application to extend an existing MA or grant a MA for other similar medicinal products for the same therapeutic indication.
A similar medicinal product is defined as a medicinal product containing a similar active substance or substances as contained in a currently
authorized orphan medicinal product, and which is intended for the same therapeutic indication. An orphan medicinal product can also obtain
an additional two years of market exclusivity for an orphan-designated condition when the results of specific studies are reflected
in the Summary of Product Characteristics (“SmPC”) addressing the pediatric population and completed in accordance with a
fully compliant Pediatric Investigation Plan (“PIP”). No extension to any supplementary protection certificate can be granted
on the basis of pediatric studies for orphan indications.

The 10-year market exclusivity may be reduced to
six years if, at the end of the fifth year, it is established that the product no longer meets the criteria for orphan designation,
i.e., the condition prevalence or financial returns criteria under Article 3 of Regulation (EC) No. 141/2000 on orphan medicinal
products. When the period of orphan market exclusivity for an indication ends, the orphan drug designation for that indication expires
as well. Orphan exclusivity runs in parallel with normal rules on data exclusivity and market protection. Additionally, an MA may be granted
to a similar medicinal product (orphan or not) for the same or overlapping indication subject to certain requirements.

In the UK, following the post-Brexit transition
period, a system for incentivizing the development of orphan medicines was introduced. Overall, the requirements for orphan designation
largely replicate the requirements in the EU and the benefit of market exclusivity has been retained. Products with an orphan designation
in the EU can be considered for an orphan MA in Great Britain and, marketing authorizations granted for products that fulfil UK orphan
criteria are valid UK-wide regardless of whether there is an EU orphan designation. The MHRA will review applications for orphan designation
at the time of an MA, and will offer incentives, such as market exclusivity and full or partial refunds for MA fees to encourage the development
of medicines in rare diseases. Separately, the MHRA has stated that it is considering updating its licensing framework for orphan medicines,
with a draft framework expected by spring 2026.

Pediatric Development

In the EU, companies developing a new medicinal
product are obligated to study their product in children and must therefore submit a PIP together with a request for agreement to the
EMA. The EMA issues a decision on the PIP based on an opinion of the EMA’s Pediatric Committee. Companies must conduct pediatric
clinical trials in accordance with the PIP approved by the EMA, unless a deferral (e.g., until enough information to demonstrate
its effectiveness and safety in adults is available) or waiver (e.g., because the relevant disease or condition occurs only in
adults) has been granted by the EMA. The MAA for the medicinal product must include the results of all pediatric clinical trials
performed and details of all information collected in compliance with the approved PIP, unless a waiver or a deferral has been granted,
in which case the pediatric clinical trials may be completed at a later date. Medicinal products that are granted a MA on the basis of
the pediatric clinical trials conducted in accordance with the approved PIP are eligible for a six month extension of the protection under
a supplementary protection certificate (if any is in effect at the time of approval) or, in the case of orphan medicinal products, a two
year extension of the orphan market exclusivity. This pediatric reward is subject to specific conditions and is not automatically available
when data in compliance with the approved PIP are developed and submitted. An approved PIP is also required when a MA holder wants to
add a new indication, medicinal form or route of administration for a medicine that is already authorized and covered by intellectual
property rights.

In the UK, the MHRA has published guidance on the
procedures for UK PIPs which, where possible, mirror the submission format and requirements of the EU system. From January 1, 2025, EU
pediatric requirements are addressed via Windsor Framework categorization: for Category 2 products, both UK and EU pediatric requirements
apply, and an EU-agreed PIP must also be in place (unless waived).

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PRIME Designation

In March 2016, the EMA launched an initiative
to facilitate the development of product candidates in indications, often rare, for which few or no therapies currently exist. The Priority
Medicines (“PRIME”) scheme is intended to encourage drug development in areas of unmet medical need and provides accelerated
assessment of products representing substantial innovation reviewed under the centralized procedure. Products from small-and medium-sized
enterprises may qualify for earlier entry into the PRIME scheme than larger companies on the basis of compelling non-clinical data and
tolerability data from initial clinical trials. Many benefits accrue to sponsors of product candidates with PRIME designation, including
but not limited to, early and proactive regulatory dialogue with the EMA, frequent discussions on clinical trial designs and other development
program elements, and potentially accelerated MAA assessment once a dossier has been submitted. Importantly, once a candidate medicine
has been selected for the PRIME scheme, a dedicated contact point and rapporteur from the CHMP or from CAT are appointed facilitating
increased understanding of the product at EMA’s Committee level. A kick-off meeting with the CHMP/CAT rapporteur initiates these
relationships and includes a team of multidisciplinary experts to provide guidance on the overall development plan and regulatory strategy.
PRIME eligibility does not change the standards for product approval, and there is no assurance that any such designation or eligibility
will result in expedited review or approval.

Post-Approval Regulation

Similar to the United States, both MA holders
and manufacturers of medicinal products are subject to comprehensive regulatory oversight by the EMA, the EC and/or the competent regulatory
authorities of the EU Member States. This oversight applies both before and after grant of manufacturing licenses and MAs. It includes
control of compliance with EU good manufacturing practices rules, manufacturing authorizations, pharmacovigilance rules and requirements
governing advertising, promotion, sale, and distribution, recordkeeping, importing and exporting of medicinal products.

Failure by us or by any of our third-party partners,
including suppliers, manufacturers and distributors to comply with EU laws and the related national laws of individual EU Member States
governing the conduct of clinical trials, manufacturing approval, MA of medicinal products and marketing of such products, both before
and after grant of MA, statutory health insurance, bribery and anti-corruption or other applicable regulatory requirements may result
in administrative, civil or criminal penalties. These penalties could include delays or refusal to authorize the conduct of clinical trials
or to grant MA, product withdrawals and recalls, product seizures, suspension, withdrawal or variation of the MA, total or partial suspension
of production, distribution, manufacturing or clinical trials, operating restrictions, injunctions, suspension of licenses, fines and
criminal penalties.

The holder of an MA for a medicinal product must
also comply with EU pharmacovigilance legislation and its related regulations and guidelines, which entail many requirements for conducting
pharmacovigilance, or the assessment and monitoring of the safety of medicinal products.

These pharmacovigilance rules can impose on holders
of MAs the obligation to conduct a labor intensive collection of data regarding the risks and benefits of marketed medicinal products
and to engage in ongoing assessments of those risks and benefits, including the possible requirement to conduct additional clinical studies
or post-authorization safety studies to obtain further information on a medicine’s safety, or to measure the effectiveness of risk-management
measures, which may be time consuming and expensive and could impact our profitability. MA holders must establish and maintain a pharmacovigilance
system and appoint an individual qualified person for pharmacovigilance, who is responsible for oversight of that system. Key obligations
include expedited reporting of suspected serious adverse reactions and submission of Periodic Safety Update Reports (“PSURs”)
in relation to medicinal products for which they hold MAs. The EMA reviews PSURs for medicinal products authorized through the centralized
procedure. If the EMA has concerns that the risk benefit profile of a product has varied, it can adopt an opinion advising that the existing
MA for the product be suspended, withdrawn or varied. The agency can advise that the MA holder be obliged to conduct post-authorization
Phase IV safety studies. If the EC agrees with the opinion, it can adopt a decision varying the existing MA. Failure by the
MA holder to fulfill the obligations for which the EC’s decision provides can undermine the ongoing validity of the MA.

More generally, non-compliance with pharmacovigilance
obligations can lead to the variation, suspension or withdrawal of the MA for the product or imposition of financial penalties or other
enforcement measures.

The manufacturing process for pharmaceutical products
in the EU is highly regulated and regulators may shut down manufacturing facilities that they believe do not comply with regulations.

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Manufacturing requires a manufacturing authorization,
and the manufacturing authorization holder must comply with various requirements set out in the applicable EU laws, regulations and guidance,
including Directive 2001/83/EC, Directive 2003/94/EC (repealed by Directive 2017/1572 on January 31, 2022), Regulation (EC) No 726/2004
and the European Commission Guidelines for Good Manufacturing Practice (“GMP”). These requirements include compliance with
EU GMP standards when manufacturing pharmaceutical products and active pharmaceutical ingredients, including the manufacture of active
pharmaceutical ingredients outside of the EU with the intention to import the active pharmaceutical ingredients into the EU. Amendments
or replacements of at least Directive 2001/83/EC and Regulation (EC) No 726/2004 are part of the reform proposal for European pharmaceutical
legislation. Similarly, the distribution of pharmaceutical products into and within the EU is subject to compliance with the applicable
EU laws, regulations and guidelines, including the requirement to hold appropriate authorizations for distribution granted by the competent
authorities of the EU Member States. The manufacturer or importer must have a qualified person who is responsible for certifying that
each batch of product has been manufactured in accordance with GMP, before releasing the product for commercial distribution in the EU
or for use in a clinical trial. Manufacturing facilities are subject to periodic inspections by the competent authorities for compliance
with GMP.

On October 27, 2025, the Council of the European
Union approved a framework for compulsory licensing of crisis-relevant products (including medicinal products) in crisis situations. While
the proposal focuses on voluntary agreements with intellectual property rights holders, it includes rules on compulsory licensing as a
measure of last resort upon activation / declaration of a crisis or emergency mode. The European Parliament has not yet voted on the proposal.

Sales and Marketing Regulations

The advertising and promotion of our products is
also subject to EU laws concerning promotion of medicinal products, interactions with physicians, misleading and comparative advertising
and unfair commercial practices. In addition, other national legislation of individual EU Member States may apply to the advertising and
promotion of medicinal products and may differ from one country to another. These laws require that promotional materials and advertising
in relation to medicinal products comply with the product’s SmPC as approved by the competent regulatory authorities. The SmPC is
the document that provides information to physicians concerning the safe and effective use of the medicinal product. It forms an intrinsic
and integral part of the MA granted for the medicinal product. Promotion of a medicinal product that does not comply with the SmPC is
considered to constitute off-label promotion. All advertising and promotional activities for the product must be consistent with the approved
SmPC and therefore all off-label promotion is prohibited. Direct-to-consumer advertising of prescription-only medicines is also prohibited
in the EU. Violations of the rules governing the promotion of medicinal products in the EU could be penalized by administrative measures,
fines and imprisonment. These laws may further limit or restrict the advertising and promotion of our products to the general public and
may also impose limitations on its promotional activities with healthcare professionals. EU regulation with regards to dispensing, sale
and purchase of medicines has generally been preserved in the UK following Brexit, through the Human Medicines Regulations. However, organizations
wishing to sell medicines online need to register with the MHRA. Following Brexit, the requirements to display the common logo no
longer apply to UK-based online sellers, except for those established in Northern Ireland.

Anti-Corruption Legislation

In the EU, interactions between pharmaceutical
companies and physicians are also governed by strict laws, regulations, industry self-regulation codes of conduct and physicians’
codes of professional conduct both at EU level and in the individual EU Member States. The provision of benefits or advantages to physicians
to induce or encourage the prescription, recommendation, endorsement, purchase, supply, order or use of medicinal products is prohibited
in the EU. The provision of benefits or advantages to physicians is also governed by the national anti-bribery laws of the EU Member States.
Violation of these laws could result in substantial fines and imprisonment.

Payments made to physicians in certain EU Member
States also must be publicly disclosed. Moreover, agreements with physicians must often be the subject of prior notification and approval
by the physician’s employer, his/her regulatory professional organization, and/or the competent authorities of the individual EU
Member States. These requirements are provided in the national laws, industry codes, or professional codes of conduct, applicable in the
individual EU Member States. Failure to comply with these requirements could result in reputational risk, public reprimands, administrative
penalties, fines or imprisonment.

In the UK, the pharmaceutical sector is recognized
as being particularly vulnerable to corrupt practices, some of which fall within the scope of the Bribery Act 2010. Due to the Bribery
Act 2010’s far-reaching territorial application, the potential penalized act does not have to occur in the UK to become within
its scope. If the act or omission does not take place in the UK, but the person’s act or omission would constitute an offense if
carried out there and the person has a close connection with the UK, an offense will still have been committed.

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The Bribery Act 2010 is comprised of four
offenses that cover (i) individuals, companies and partnerships that give, promise or offer bribes, (ii) individuals, companies
and partnerships that request, agree to receive or accept bribes, (iii) individuals, companies and partnerships that bribe foreign
public officials and (iv) companies and partnerships that fail to prevent persons acting on their behalf from paying bribes. The
penalties imposed under the Bribery Act 2010 depend on the offence committed, harm and culpability and penalties range from unlimited
fines to imprisonment for a maximum term of ten years and in some cases both.

Regulations in the UK and Other Markets

The UK formally left the EU on January 31,
2020 and EU laws now only apply to the UK in respect of Northern Ireland as laid out in the protocol on Ireland and Northern Ireland and
as amended by the Windsor Framework sets out a long-term set of arrangements for the supply of medicines into Northern Ireland. The EU
and the UK agreed on a trade and cooperation agreement, which includes provisions affecting the life sciences sector (including on customs
and tariffs). There are some specific provisions concerning pharmaceuticals, including the mutual recognition of GMP, inspections of manufacturing
facilities for medicinal products and GMP-issued documents. The TCA does not, however, contain wholesale mutual recognition of UK and
EU pharmaceutical regulations and product standards.

The UK government has adopted the Medicines and
Medical Devices Act 2021 (the “MMDA”) to enable the UK’s regulatory frameworks to be updated following the UK’s
departure from the EU. The MMDA introduces regulation-making, delegated powers covering the fields of human medicines, clinical trials
of human medicines, veterinary medicines and medical devices. The MHRA has since been consulting on future regulations for medicines and
medical devices in the UK.

For other countries outside of the EU, such as
countries in Eastern Europe, Latin America or Asia, the requirements governing the conduct of clinical trials, product licensing, pricing
and reimbursement vary from country to country. In all cases, again, the clinical trials must be conducted in accordance with GCP and
the applicable regulatory requirements and the ethical principles that have their origin in the Declaration of Helsinki.

If we fail to comply with applicable foreign regulatory
requirements, we may be subject to, among other things, fines, suspension of clinical trials, suspension or withdrawal of regulatory approvals,
product recalls, seizure of products, operating restrictions and criminal prosecution.

Additional Regulation

In addition to the foregoing, local, state and
federal laws, including in the United States and Israel, regarding such matters as safe working conditions, manufacturing practices,
environmental protection, fire hazard control and hazardous substances, including the Occupational Safety and Health Act, the Resource
Conservancy and Recovery Act and the Toxic Substances Control Act, affect our business. These and other laws govern our use, handling
and disposal of various biological, chemical and radioactive substances used in, and wastes generated by, our operations. If our operations
result in contamination of the environment or expose individuals to hazardous or biohazardous substances, we could be liable for damages,
environmental remediation, and/or governmental fines. We believe that we are in material compliance with applicable environmental laws
and occupational health and safety laws that continued compliance therewith will not have a material adverse effect on our business. We
cannot predict, however, how changes in these laws may affect our future operations. We may incur significant costs to comply with such
laws and regulations now or in the future.

Our Employees

As of February 1, 2026, we had 11 employees, two
of whom served on a full-time basis. Of these employees, five are engaged in research and development. None of our employees is represented
by a labor union or covered under a collective bargaining agreement. We consider our relationship with employees to be good.

Nine of our employees are engaged through our Services
Agreement with Mstone. See “Certain Relationships and Related Transactions, and Director Independence — Related
Party Transactions — Mstone Partners Healthcare Limited.” While Mstone professionals will continue to support
Polaryx on a consulting basis pursuant to the Services Agreement we signed in November 2021, promoting continuity and strategic alignment
during the company’s next phase of growth, our future success depends on our ability to attract, develop and retain key personnel.
Our human resources objectives include, among other things, identifying, recruiting, retaining, incentivizing and integrating prospective
employees. We also retain independent contractors as needed to support our organization’s needs.

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