AKTX US Equity☆

Item 1A. Risk Factors 27

Item 1B. Unresolved Staff Comments 61

Item 1C. Cybersecurity 61

Item 2. Properties 61

Item 3. Legal Proceedings 61

Item 4. Mine Safety Disclosures 61

Item 6. [Reserved] 64

Item 7A. Quantitative and Qualitative Disclosures About Market Risk 80

Item 8. Financial Statements and Supplementary Data 80

Item 9A. Controls and Procedures 80

Item 9B. Other Information 82

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 82

PART III 82

Item 10. Directors, Executive Officers, and Corporate Governance 82

Item 11. Executive Compensation 86

Item 14. Principal Accounting Fees and Services 100

Item 15. Exhibits, Financial Statement Schedules 101

GENERAL

INFORMATION

Unless

otherwise stated or the context requires otherwise, references in this Annual Report on Form 10-K (“Form 10-K”) to “Akari,”

the “company,” the “Company,” “we,” “us,” “our” or similar designations refer

to Akari Therapeutics, Plc and its subsidiaries, taken together. All trademarks, service marks, trade names and registered marks used

in this report are trademarks, trade names or registered marks of their respective owners.

Website

addresses referenced in this Form 10-K are provided for convenience only, and the content on the referenced websites does not constitute

a part of, and are specifically not incorporated by reference into, this Form 10-K.

Statements

made in this Form 10-K concerning the contents of any agreement, contract or other document are summaries of such agreements, contracts

or documents and are not complete description of all of their terms. If we filed any of these agreements, contracts or documents as exhibits

to this Form 10-K or to any previous filing with the Securities and Exchange Commission (“SEC”), you may read the document

itself for a complete understanding of its terms.

NOTE

REGARDING FORWARD-LOOKING STATEMENTS

This

Form 10-K and the documents we incorporate by reference contain forward-looking statements within the meaning of Section 27A of the Securities

Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange

Act”). All statements, other than statements of historical fact, included or incorporated in this report regarding, among other

things, our cash resources and projected cash runway, financial position, our strategy, strategic alternatives, future operations, clinical

trials (including, without limitation, the anticipated timing enrollment, and results thereof), collaborations, intellectual property,

future revenues, projected costs, fundraising and/or financing plans, prospects, developments relating to our competitors and our industry,

the timing or likelihood of regulatory actions, filings and approvals for our current and future drug candidates, and the benefits related

to the Merger Agreement (as defined below) and the plans and objectives of management are forward-looking statements. The words “believes,”

“anticipates,” “estimates,” “plans,” “expects,” “intends,” “may,”

“could,” “should,” “potential,” “likely,” “projects,” “intend,”

“continue,” “will,” “schedule,” “would,” “aim,” “contemplate,”

“estimate,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking

statements contain these identifying words. We cannot guarantee that we will actually achieve the plans, intentions, or expectations

disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. These forward-looking

statements involve known and unknown risks, uncertainties, and other factors, which may be beyond our control, and which may cause our

actual results, performance, or achievements to be materially different from future results, performance, or achievements expressed or

implied by such forward-looking statements.

There

are a number of important factors that could cause our actual results to differ materially from those indicated or implied by forward-looking

statements. These important factors include those set forth below under Part I, Item 1A “Risk Factors” and in our other disclosures

and filings with the SEC. These factors and the other cautionary statements made in

this Form 10-K and the documents we incorporate by reference should be read as being applicable to all related forward-looking statements

whenever they appear in this Form 10-K and the documents we incorporate by reference.

In

addition, any forward-looking statements represent our estimates only as of the date that this Form 10-K is filed with the SEC and should

not be relied upon as representing our estimates as of any subsequent date. All forward-looking statements included in this Form 10-K

are made as of the date hereof and are expressly qualified in their entirety by this cautionary notice. We disclaim any intention or

obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except

as may be required by law.

SUMMARY

OF PRINCIPAL RISK FACTORS

Below

is a summary of material factors that make an investment in our American Depositary Shares (“ADSs”) speculative or risky.

Importantly, this summary does not address all the risks and uncertainties that we face. Additional discussion of the risks and uncertainties

summarized in this risk factor summary, as well as other risks and uncertainties that we face, can be found within Part I, Item 1A, “Risk

Factors” in this Form 10-K. The below summary is qualified in its entirety by those more complete discussions of such risks and

uncertainties. You should consider carefully the risks and uncertainties described under Part I, Item 1A, “Risk Factors”

in this Form 10-K as part of your evaluation of an investment in our ADSs.

PART

I

Item

1. Business.

Overview

We

are an oncology company developing next-generation antibody-drug conjugates (“ADCs”) built around novel, proprietary

payloads utilizing powerful biology to attack cancer. Our lead payload, PH1, targets RNA splicing by modulating the spliceosome, a

complex machinery in the cell that converts pre-RNA into spliced RNA for translation into vital proteins for cell survival and

growth. PH1’s disruption of normal RNA splicing has multiple modes of action on cancer cells: 1) cell killing and

cytotoxicity that causes cancer cell death and 2) generates neoantigen proteins that activates both the innate and adaptive immune

systems to drive robust and durable cancer killing activity in preclinical models. Additionally, AKTX-101 is active against

urothelial cancers with FGFR3- fusions, lung cancers with SMARCA4 deletions and BRAF G466V mutations, and K-Ras G12V driven

pancreatic cancers, whereas the PH1 payload has been demonstrated to be active against metastatic prostate cancer cells driven by

AR-v7 and AR-hormone dependent prostate cancer showing the power of the PH1 payload against oncogenes derived from spliced

isoforms/variants. Utilizing the novel PH1 payload as a platform, the Company has the ability to generate a pipeline of ADC

candidates each focused on a different cancer antigen target of interest (i.e. Trop-2, CEACAM5). Akari’s lead candidate,

AKTX-101, targets the Trop-2 receptor on cancer cells and is engineered with a proprietary linker to deliver its novel PH1 payload

directly into the tumor with minimal off-target effects. In preclinical studies, AKTX-101 has shown to have significant activity and

prolonged survival relative in animal models relative to an ADC with a traditional payload (topoisomerase1 inhibitor). Additionally,

because of the unique generation of neoantigens by PH1, AKTX-101 has the potential to be synergistic with checkpoint inhibitors and

has demonstrated prolonged survival as a combination regimen that is greater than the additive efficacy of either the ADC or

checkpoint inhibitor alone. The Company is advancing its lead asset AKTX-101 towards clinical trials and has initiated IND enabling

studies for AKTX-101 with a goal of starting its First-In-Human Phase 1 trial by late 2026/early 2027. The Company is also advancing

AKTX-102, an ADC against a novel antigen target CEACAM5, which is highly relevant in pancreatic, colon, stomach, esophageal, and

lung cancers.

Background

Cancers

are the second leading cause of mortality in the United States and the leading cause of death for those under 65 years of age. The American

Cancer Society estimates that approximately 626,000 people will die of cancer in the United States in 2026.

ADCs

are a class of cancer therapies that combine the precision targeting of antibodies with payload toxins or chemotherapy that attack cancer

cells. To date, innovation in the field of ADC therapies has focused primarily on the development of novel antibodies linked to existing

classes of payload toxins and chemotherapies. For example, there is a range of approved ADCs with antibodies that target the Her2, Trop-2,

CD19, CD22, CD30, Nectin-4, Tissue Factor, and FR alpha antibodies. But there is a surprising lack of diversity in the payload toxins

to which those antibodies are linked. All of the currently approved and marketed products, and more than 90% of ADCs in late-stage clinical

development of which we are aware, utilize payloads from just two standard classes: (1) microtubule inhibitors or (2) DNA-damaging agents

such as topoisomerase I inhibitors.

Despite

the initial success of ADCs as oncology therapies, each of these payload classes has limitations in terms of delivering significant and

enduring efficacy, and manageable toxicity and tolerability for cancer patients:

Our

ADC approach centers on creating novel payloads that work through different and powerful biological mechanisms as compared to these standard

payload classes. We believe that doing so may allow us to discover and develop ADCs that solve for the known limitations outlined of

current therapies that utilize existing payload classes. However, our strategy is new and unproven, and we cannot guarantee that we will

be successful in our efforts.

Our

differentiated ADC discovery and development platform (our “ADC Platform”) enables us to generate a range of ADC product

candidates that pair our novel payloads with biologically validated antibody targets prevalent in cancer tumors. We believe that our

focus on the development of ADCs that utilize our novel payloads may allow us to develop ADCs with benefits that include:

● more effective cancer-killing properties, or cytotoxicity;

● reduced tumor resistance; and

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

Our

lead payload, PH1, derives its 1) cytotoxic and 2) immune activating properties from its ability to disrupt the function of spliceosomes,

which play a critical role in protein synthesis. In addition to the cytotoxic or cell killing properties of the PH1 payload, we have

observed in preclinical studies that PH1 triggers an immune response that leads to additional cancer cell killing via the activation

B-cells and T-cells through neoantigen formation on the cancer cell. We believe this dual 1-2 mode of action of tumor killing by PH1

is differentiated from current standard ADC payloads used today and suggests that PH1 presents a unique approach to immuno-oncology ADC

therapies moving forward.

Our

lead product candidate is AKTX-101, a preclinical Trop-2–targeting ADC that combines PH1 with a proprietary non-cleavable

linker and antibody construct. We are developing AKTX-101 as a potential best-in-class Trop-2 ADC based on preclinical

differentiation described in this Annual Report on Form 10-K and our public scientific updates. Trop-2 is an antigen target

expressed in several solid tumor cancers with significant unmet need, including lung, breast, bladder, gastric, head and neck,

pancreatic, and others. Given the wide expression of Trop-2, AKTX-101 as the potential to address a wide range of cancers affecting

hundreds of thousands of patients globally.

In

addition, we have expanded our PH1-based pipeline with AKTX-102, a CEACAM5-directed ADC program that combines a novel CEACAM5-targeting

antibody construct with PH1, reflecting the scope of our research capabilities, and the potential of our PH1 payload to be designed into

novel ADC candidates. and ADC design capabilities while we prioritize resources on the lead program.

Our

Strategy

We

aim to create more effective ADC cancer therapies for patients that aim to arrest and destroy cancer by leveraging our payload

biology and chemistry expertise to harness the power of the immune system to create potentially superior ADC therapies for cancer

patients. We intend to leverage the core capabilities of our experienced team in cancer biology and chemistry, as well as

experienced senior leadership in the oncology field to advance our novel ADC payload and resulting ADC candidates.

Our

approach is focused on three key areas:

Our

Novel Payload

PH1:

Our Lead Payload That Targets RNA Splicing

PH1,

or Thailanstatin ThA13, is an analog of a toxin produced by the bacterium Burkholderia thailandensis MSMB43, with cytotoxic properties

that stem from its ability to inhibit the ability of spliceosomes in eukaryotic cells to properly generate mature messenger mRNA (“mRNA”)

from pre-messenger RNA (“pre-mRNA”) during the step of protein synthesis called splicing.

We

believe spliceosomes are attractive targets for ADCs because the inhibition or significant modulation of spliceosome function prevents

cells from receiving critical information necessary for their continued survival. During splicing, pre-RNA is converted to mRNA via the

removal of “junk” sequences of pre-mRNA called introns, and the stitching together of the meaningful parts of pre-mRNA called

exons. After the introns have been removed and the exons stitched together, the resulting mRNA is then translated into proteins. The

spliceosome is the machinery responsible for the correct splicing of pre-mRNA and resultant formation of mRNA.

Faulty

spliceosome function, results in improper construction of exons, leading to faulty mRNA and resultant aberrant proteins.

Accumulation of thousands of aberrant mis-spliced RNA sequences result in numerous misfolded and unnatural proteins within the cell.

This causes the cell to die by endoplasmic reticulum stress, unfolded protein response, and other various mechanisms. The

accumulation of these mis-spliced RNA cells also produces unnatural proteins called neoepitopes and act as neoantigens, which

generate an immune activation response that leads to further elimination of cancer cells by the immune system that express similar

neoepitopes. We believe the secondary cytotoxic effect of spliceosome malfunction that results from neoepitope formation makes the

use of spliceosome modulators/inhibitors attractive in the development of potential ADC therapies due to their potential to exhibit

a 1-2 Mechanism of Actin punch, through which the payload targets and kills cancer cells, and the resultant formation of

neoepitopes/neoantigens triggers the body’s immune system to also attack the cancer with powerful response.

Preclinical

data that we have generated indicates that PH1 possesses the ability to induce neoepitope formation. In an in vitro study, we

performed an unbiased comparison of our PH1 – a microtubule inhibitor payload, ravtansine (“DM4”), and dimethyl sulfoxide

(“DMSO”) vehicle control – to treat human gastric cancer cells. After treatment by each test agent. We performed RNA

sequencing of all genes and looked for sequences that would give rise to neoepitopes. After identifying the normal and novel RNA species,

we highlighted the neoepitope-containing species that respectively increased in response to treatment with DM4 and PH1, as compared to

the control treatment (DMSO). We observed that PH1-treated cells contained 765 neoepitope-containing RNA species, representing approximately

9 times the number of neoepitope-containing species created by DM4, which suggests that PH1 may be highly proficient at recruiting immune

cells to the tumor and stimulating immune-cell mediated cancer cell death. When we looked for genes that were negatively impacted and

reduced in quantity, we found 660 unique RNA species were depleted in PH1-treated cells, which was over three times greater than the number

found in DM4-treated cells.

Summary

of Preclinical Studies of PH1

We

have further examined the cytotoxic and immunostimulatory effects of PH1 as part of multiple ADC molecules against multiple antigen

targets (HER2, Trop-2, CEACAM5, etc.) and across several solid tumor types. To further establish the immuno-oncology effects of

PH1, we have explored the efficacy of these ADC-PH1 molecules as both a single agent compared to checkpoint inhibitors and in

combination with checkpoint inhibitors to evaluate its synergistic effects and ability to drive profound efficacy benefits. In in

vitro gastric and breast cancer models, we compared the cytotoxicity of an ADC comprised of PH1 conjugated to a Her2 antibody

(“Her2-PH1 ADC”) with that of Kadcyla®, a Her2-targeting ADC commercially approved for use in the treatment of

Her2-positive breast cancer. In both studies, the Her2-PH1 ADC demonstrated superior cytotoxic activity. We also studied

PH1 conjugated to a novel target (undisclosed) in an in vitro preclinical model of non-small cell lung cancer (NSCLC) and

found that the PH1 ADC showed increased anti-tumor activity in comparison to a vehicle comprised of the naked antibody

alone.

We

have also studied PH1’s potential synergies with checkpoint inhibitors in a mouse colon cancer model in which we examined tumor

regression and overall survival rates in 76 mice that were injected subcutaneously with colon cancer cells expressing Her2. We compared

a Trastuzumab-PH1 ADC against Kadcyla®, (Kadcyla® is not approved for colon cancer) both as a single agent treatment and in combination

with checkpoint inhibitor therapy (“I/O”). When administered as a combination with I/O therapy, the Her2-PH1 ADC demonstrated

significant greater survival rates vs Kadcyla plus I/O therapy. The Trastuzumab-PH1 ADC induced 14 complete tumor regressions (“CRs”)

whereas 5 tumors rebounded after initial shrinkage (n=19 mice per arm). As a result, 73% of Her2-PH1 + I/O treated mice showed complete

regressions and were still on study at 5 months, and median survival was not reached. In the Kadcyla® combination arm with I/O, there

were 8 CRs and 11 tumor rebounds, and 42% of Kadcyla® + I /O treated mice were tumor-free at 5 months. The median survival of Kadcyla®

+ I/O treated mice was 149 days.

A

second in vivo preclinical mouse study was performed to demonstrate the immunological memory to attack cancer that is created

uniquely by the PH1 payload. Using an identical mouse colon cancer model with the cancer cells expressing Her2 as described previously,

the mice developed measurable tumors and were then treated with two doses of a Trastuzumab-PH1 ADC, both as monotherapy and in combination

with I/O. Of the eight mice treated with the Trastuzumab-PH1 ADC in combination with I/O, seven (87.5%) had achieved CR and survived

at 150 days. These seven mice that had complete tumor/cancer remissions were subsequently rechallenged with colon cancer cells expressing

Her2, similar to the cells administered at the onset of the study. No tumor growth was observed in any of the seven mice after they were

rechallenged with colon cancer cells. These zero occurrences of colon cancer were found despite these mice not receiving any additional

treatment with the Trastuzumab-PH1 ADC after being rechallenged, indicating that these mice retained immune memory developed during the

initial treatment of Trastuzumab-PH1 against the colon cancer cells expressing Her2. Based on the results of these two in vivo studies,

we believe that PH1 has the potential to generate a powerful immunostimulatory effect and may possess synergies with checkpoint inhibitors,

which could improve the longer-term control of cancer that could result in enduring remissions.

To

further understand PH1’s unique ability to drive a powerful immune response observed in these studies, immune cell repertoire analysis

of the blood and tissue were performed from the mice treated in the first Her2 colon cancer in vivo experiment described previously.

In

this analysis, it was found that the Trastuzumab-PH1 ADC was uniquely able to drive a multi-modal immune response of both the innate

and adaptive immune system not seen with the Kadcyla ADC or with an anti-PD1 inhibitor. These changes included a polarization of macrophages

to the pro-inflammatory phenotype, an increase in neutrophils, and an increase in diverse B cells that generate a wide range of IgM antibodies:

In

addition to the unique immune activation seen with Trastuzumab-PH1 as a single agent, when this ADC-payload was combined with an anti-PD1

inhibitor, a unique expansion of Gamma Delta T Cells was observed and not seen with any other comparator arms including Kadcyla®

+ I /O or anti-PD1. The expansion of this T cell is profound given this subpopulation of T-cells is known to attack cancer through a

rapid response and has high cytotoxic activity, likely explaining some of differentiated complete remission rates seen in the in vivo

mouse experiment. This data demonstrates the unique design, action, and results seen with the PH1 payload that is highly differentiated

from current payloads used with traditional ADC molecules and enables the opportunity to potentially drive even better clinical outcomes

for patients.

PH1

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

We

have also observed that PH1 may be less susceptible to multidrug resistance (“MDR”), which can occur when cancer cells develop

resistance to chemotherapeutic agents. One mechanism by which MDR occurs is through the overexpression of what are referred to as MDR

transporters, which have the ability to pump standard ADC payloads (topoisomerase 1 and microtubule inhibitors) out of the cell before

the payload can kill the cell.

We

evaluated PH1 and Monomethyl auristatin E’s (MMAE, microtubule inhibitor) ability to kill mouse embryonic stem

(“MES”) cells with normal and high levels of MDR. We found that MMAE, but not PH1, was recognized by these pumps, and

the presence of high levels of these pumps reduced the in vitro cytotoxicity (IC50) of MMAE by ~ 200x. However, for the PH1 payload,

the presence of high levels of these pumps had no significant effect on its cytotoxic potency, as PH1 was not recognized by MDRs and

thus not pumped out of the cell. To confirm that the MDR resistance mechanism was at play for MMA3, the MDR-specific inhibitor

Elacridar when applied to the cell prevented MDR pumps in MDR-high MES cells from pumping MMAE payload out of the cell, allowing

accumulation of MMAE, and returning MMAE’s cell killing potency back to baseline. This finding confirmed that the loss of

MMAE’s potency was specific to the increase in the number of MDR pumps and did not occur when we blocked MDR’s ability

to pump out the payload using Elacridar. We believe this is important because MDR transporters are known to be implicated in the

emergence of resistance against many chemotherapies, including some ADC payloads. Furthermore, if MDRs recognized PH1, it would have

reduced its potency and restricted its cytotoxicity to only targets that were highly expressed in cancer cells.

AKTX-101:

Our Lead ADC Product Candidate

We

aim to establish a best-in-class Trop-2-targeting ADC with our lead product candidate AKTX-101. AKTX-101 is designed to treat solid tumors

by delivering PH1 into cells expressing Trop-2. Trop-2 is a cell surface antigen which is upregulated in a variety of malignant tumors,

including lung, breast, urothelial, gastric, pancreatic, and other solid tumors, but has limited expression in normal human tissues,

making it an ideal target in cancer.

We

have studied AKTX-101 in a number of preclinical models, both in vitro and in vivo, as well as in a non-human primate (“NHP”)

toxicity study. Based on our preclinical experiments, we believe AKTX-101 may have the potential to offer advantages over existing therapies

in terms of increased cytotoxicity, reduced resistance, better tolerance, and most importantly, activating the innate and adaptive immune

system to drive enduring efficacy. In in vitro preclinical studies, we compared AKTX-101 (drug antibody ratio (“DAR”)

4) to a currently approved Trop-2-targeting ADC Trodelvy® (with DAR 8). We found that AKTX-101 showed greater cytotoxicity at lower

drug doses in gastric, pancreatic and bladder cancer models. To further corroborate our in vitro observations, we evaluated AKTX-101

and the same currently approved ADC in an in vivo model against the same Trop-2 gastric carcinoma cell-line derived xenograft

grown as tumors in mice. Two doses of each agent were given with the currently approved ADC administered at 10 mg/kg while AKTX-101 (DAR

4) was administered at 3 mg/kg. Both treatments induced tumor regression at 3-6 weeks. Throughout the study at different timepoints (day

21, day 42, and day 150), the AKTX-101 arm delivered significantly superior efficacy compared to Trodelvy® validated PH1’s

greater cytotoxic ability to kill cancer cells even at significantly lower active drug doses.

First-line checkpoint inhibitor therapy is standard-of-care (“SOC”) for platinum-ineligible patients that have recurrent, resistant, or

metastatic urothelial cancer. Also, the Trop2 ADC Trodelvy® had accelerated approval for the treatment of metastatic urothelial cancer

but was later withdrawn in November 2024. Therefore, we generated a syngenetic mouse urothelial model expressing human Trop2 that failed

to respond to checkpoint blockade as a single agent after tumors exceeded a certain size threshold.

In

these studies, SOC anti-PD-1 therapy showed no significant TGI relative to control tumors (p>0.99). We then evaluated whether

AKTX-101 single agent therapy was active in this SOC unresponsive syngeneic mouse model.

AKTX-101

prevented growth of pre-established urothelial tumors up until the last dose on Day 14 in this immune competent model. AKTX-101-treated

tumors exhibited significantly delayed tumor growth relative to vehicle-treated controls (p=0.04) and relative to SOC (p=0.002).

A P-value is a statistical measurement that measures

the strength of evidenced against a null hypothesis, ranging from 0 to 1. A P-value measures the probability of obtaining results as extreme

or more extreme than observed, assuming the null hypothesis is true. A lower P-value, indicates stronger evidence to reject the null hypothesis.

The

use of our proprietary L22 linker in AKTX-101 may contribute to a safety profile that has the potential to be superior to currently

approved Trop-2-targeting ADCs. As a non-cleavable linker, L22 causes the PH1 payload to bind irreversibly to the spliceosome

machinery, thereby eliminating the potential for PH1 to be released by the cancer cell and thus enter and kill normal, non-cancerous

cells. In pre-clinical in vitro models, AKTX-101 demonstrated minimal killing of normal human fibroblasts not expressing

Trop-2 in comparison to an approved Trop-2-targeting ADC, which, due to its known bystander effect, is toxic to normal human

fibroblasts. We believe this preclinical data suggests that a higher therapeutic index may be possible using AKTX-101 over current

Trop-2 ADCs available today. We also studied the toxicity and tolerability of AKTX-101 in a NHP model. We evaluated AKTX-101 in this

study and performed a repeat-dose study wherein three ADC doses were intravenously administered every three weeks, followed by a

three-week recovery period. To gain an understanding of the maximal cumulative effects of AKTX-101, animals were evaluated two days

after receiving the last of all three doses being administered. Reversibility was addressed in another set of animals that received

all three doses but were allowed a three-week recovery period. Histopathology was performed unilaterally for all tissues in both

sets of animals. We found that AKTX-101 was well-tolerated with observed side effects that were transient (skin rash, mild

thrombocytopenia and mild elevation of liver enzymes) and resolved within weeks after administration. Based on these results

seen across the doses and frequency tested, and when analyzed with the dosing regimens driving efficacy in preclinical models, we

believe there is a suitable Therapeutic Index to support moving AKTX-101 into Phase 1 trials.

In

addition to these findings, importantly, there was no evidence of neutropenia, leukopenia, interstitial lung disease or mucosal inflammation,

which have been associated with other Trop-2-targeting ADCs that use standard payloads comprising of topoisomerase I inhibitors. We believe

the absence of observed lung complications, colitis and hypothyroidism in this study may further support AKTX-101’s potential suitability

and feasibility for use in combination with checkpoint inhibitors, given these side effects are often common with checkpoint inhibitors.

Our

Legacy Programs

As

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

Competition

The

biotechnology and pharmaceutical industries, and the oncology subsector, are characterized by rapid technological evolution, fierce competition

and strong defense of intellectual property. While we believe that our technology, the expertise of our team, and our development experience

and scientific knowledge provide us with competitive advantages, we face competition from biotechnology and pharmaceutical companies,

including companies that are larger and better funded than we are, academic institutions, governmental agencies and public and private

research institutions, among others. Moreover, we may also compete with smaller or earlier-stage companies, universities and other research

institutions that have developed, are or may be developing or may in the future develop current and future cancer therapeutics. Product

candidates that we successfully develop and commercialize may compete with existing therapies and new therapies that may become available

in the future.

We

also face competition more broadly across the oncology market for cost-effective and reimbursable cancer treatments. The most common

methods of treating patients with cancer are surgery, radiation and drug therapy, including chemotherapy, hormone therapy, biologic therapy

such as monoclonal and bispecific antibodies, immunotherapy, cell-based therapy and targeted therapy, or a combination of any such methods.

There is a variety of available drug therapies marketed for cancer. In many cases, these drugs are administered in combination to enhance

efficacy. While our product candidates, if any are approved, may compete with these existing drugs and other therapies, to the extent

they are ultimately used in combination with or as an adjunct to these therapies, our product candidates may not be competitive with

them. Insurers and reimbursement authorities may also encourage the use of generic products or specific branded products. As a result,

obtaining market acceptance of, and gaining significant share of the market for, any product candidates that we successfully introduce

to the market may pose challenges. In addition, many companies are developing new oncology therapeutics, and we cannot predict what the

standard of care will be as our current and future product candidates progress through development.

AKTX-101

will compete with approved Trop-2-targeting ADCs such as Trodelvy® and Datroway® as well as other programs

in clinical trials that also target Trop-2. If we are unable to effectively differentiate AKTX-101 from other products and product candidates

or other common methods of treating cancer patients our ability to compete would be negatively impacted.

Sales

and Marketing

Because

we have been focused on discovery and development of drugs, we currently have limited sales, marketing and distribution capabilities

in order to commercialize any other product candidates that may be approved in the future. If our lead product candidate is approved,

we intend either to establish a sales and marketing organization with technical expertise and supporting distribution capabilities, or

to outsource some or all of these functions to third parties. We may take different approaches to commercialization in different geographies.

We will adopt a similar strategy for the other compounds in our pipeline.

Manufacturing

We

rely on third party contract manufacturers (CDMOs) for the development, scaleup, and GMP production of materials used in our research

and development activities. In December 2025, we initiated GMP manufacturing activities for AKTX-101 and selected WuXi Biologics/XDC

as our partner for these key parts of IND enabling work and product supply for future clinical trials. This milestone supports our planning

for a Phase 1 first-in-human study timeline described in our public communications and prior disclosures. The partnership with WuXi for

these activities enables us to maintain an efficient, high quality, and reliable model to develop and supply our clinical material for

future studies.

Intellectual

Property

We

will be able to protect our technology and products from unauthorized use by third parties only to the extent it is covered by valid

and enforceable patents or is effectively maintained as trade secrets. Patents and other proprietary rights are thus an essential element

of our business.

Our

success will depend in part on our ability to obtain and maintain proprietary protection for our product candidates, technology, and

know-how, to operate without infringing on the proprietary rights of others, and to prevent others from infringing our proprietary rights.

Our policy is to seek to protect our proprietary position by, among other methods, filing U.S. and foreign patent applications related

to our proprietary technology, inventions, and improvements that are important to the development of our business and defending our patent

applications and patents if they are subjected to challenge by a third party. We also rely on trade secrets, know-how, continuing technological

innovation, and in-licensing opportunities to develop and maintain our proprietary position.

As

of January 1, 2026, our payload platform and ADC pipeline consist of two Patent co-operation treaty (PCT) families and three provisional

patents filed at the European Patent Office (“EPO”) or the United States Patent and Trademark Office (“USPTO”).

The

PH-1 payload program was developed in-house. This patent family has been granted in the United States, China, Israel, India, Mexico,

and Brazil, with actions pending in Europe, Japan, New Zealand, Canada and Australia. The composition of matter

claims describing novel Thailanstatin payloads and linkers have IP coverage through September 2038.

The

PCT patent application filed in 2024 has claims describing next-generation Thailanstatin diastereomer payloads, novel Trop-2 antibodies

and Trop-2 ADCs protecting different aspects of pipeline candidate, AKTX-101, while also covering aspects of use or application of AKTX-101

to different cancer settings. This patent also describes a large-scale chemosynthetic process for payload synthesis amenable to manufacturing.

This patent family is pending in 12 jurisdictions, and the anticipated expiry of this patent family is April 2043.

In

2025, we filed 3 additional provisional patent applications at USPTO covering a wide scope of anti-cancer biological mechanisms unique

to targeting RNA splicing in cancer cells that are not specific to the composition of matter of the PH1 payload:

These

2025 provisional patent filings are anticipated to expire between September and October 2045 and if granted, will provide the Company

with broad protection over ADC molecules that use splicing modulation actions to attack cancers.

We

are planning to file composition of matter patents as we continue to research and induct new ADCs into our pipeline. We will continue

to create novel composition of matter patents to cover new ADCs not limited to new usage of linkers, formulations, and/or standard-of-care

combination patents to secure additional protection after the PH-1 and AKTX-101 patent families expire.

If

we are unable to obtain, maintain, defend and enforce patent and other intellectual property rights for our technologies and product

candidate, or if the scope of the patent and other intellectual property rights obtained is not sufficiently broad, our competitors and

other third parties could develop and commercialize technology, biologics and/or biosimilars similar or identical to ours, and erode

or negate any competitive advantage that we may have, which could harm our business and ability to achieve profitability.

We

can provide no assurance that our patent applications or those of our licensors will result in additional patents being issued or that

issued patents will afford sufficient protection against competitors with similar technologies, nor can there be any assurance that the

patents issued will not be infringed, designed around, or invalidated by third parties. Even issued patents may later be found unenforceable

or may be modified or revoked in proceedings instituted by third parties before various patent offices or in courts. The degree of future

protection for our proprietary rights is uncertain. Only limited protection may be available and may not adequately protect our rights

or permit us to gain or keep competitive advantage. Composition-of-matter patents on the biological or chemical active pharmaceutical

ingredients are generally considered to offer the strongest protection of intellectual property and provide the broadest scope of patent

protection for pharmaceutical products, as such patents provide protection without regard to any method of use or any method of manufacturing.

While we have issued composition-of-matter patents in the United States and other countries, we cannot be certain that the claims in

our issued composition-of-matter patents will not be found invalid or unenforceable if challenged. We cannot be certain that the claims

in any patent applications covering composition-of-matter or formulations of our product candidates that are pending, or that we may

file, will be considered patentable by the USPTO, and courts in the United States or by the patent offices and courts in foreign countries,

nor can we be certain that the claims in our issued composition-of-matter patents will not be found invalid or unenforceable if challenged.

Even if any patent applications that we may file relating to specific formulations of our product candidates issue as patents, formulation

patents protect a specific formulation of a product and may not be enforced against competitors making and marketing a product that has

the same active pharmaceutical ingredient in a different formulation. Method-of-use patents protect the use of a product for the specified

method or for treatment of a particular indication. This type of patent may not be enforced against competitors making and marketing

a product that has the same active pharmaceutical ingredient for use in a method not claimed by the patent. Moreover, even if competitors

do not actively promote their product for our targeted indications, physicians may prescribe these products “off-label.”

Although off-label prescriptions may infringe or contribute to the infringement of method-of-use patents, the practice is common and

such infringement may be difficult to prevent or prosecute. Also, as is the case for composition-of-matter patents, we cannot be certain

that the claims in our issued method-of-use patents will not be found invalid or unenforceable if challenged. We cannot be certain that

the claims in any patent applications covering methods of using our product candidates that are pending, or that we may file, will be

considered patentable by the USPTO and courts in the United States or by the patent offices and courts in foreign countries, nor can

we be certain that the claims in our issued method-of-use patents will not be found invalid or unenforceable if challenged.

Government

Regulation

Government

Regulation and Product Approval

Government

authorities in the U.S., at the federal, state and local level, and in other countries extensively regulate, among other things, the

research, development, testing, manufacture, quality control, approval, labeling, packaging, storage, record-keeping, promotion, advertising,

distribution, marketing and export and import of products such as those that we are developing. A new drug must be approved by the FDA,

generally through the new drug application (“NDA”) process and a new biologic must be approved by the FDA through the biologics

license application (“BLA”) process before it may be legally marketed in the U.S. The animal and other non-clinical data

and the results of human clinical trials performed under an Investigational New Drug application (“IND”) and under similar

foreign applications will become part of the NDA or BLA.

U.S.

Drug Development Process

In

the U.S., the FDA regulates drugs under the Federal Food, Drug, and Cosmetic Act (“FDCA”) and in the case of biologics, also

under the Public Health Service Act (“PHSA”) and the implementing regulations for both statutes. The process of obtaining

marketing authorizations and the subsequent compliance with applicable federal, state, local, and foreign statutes and regulations require

the expenditure of substantial time and financial resources. Failure to comply with the applicable U.S. requirements at any time during

the product development process, approval process or after approval, may subject an applicant to administrative or judicial sanctions.

These sanctions could include the FDA’s refusal to approve pending applications, withdrawal of an approval, a clinical hold, warning

letters, requesting product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines,

refusals of government contracts, restitution, disgorgement, or civil or criminal penalties. Any agency or judicial enforcement action

could have a material adverse effect on us. The process required by the FDA before a drug or biologic may be marketed in the U.S. generally

involves the following:

● submission to the FDA of an NDA or BLA;

● FDA review and approval of the NDA or BLA.

Once

a product candidate is identified for development, it enters the preclinical testing stage. Preclinical tests include laboratory evaluations

of product chemistry, toxicity and formulation, as well as animal studies. An IND sponsor must submit the results of the preclinical

tests, together with manufacturing information and analytical data, to the FDA as part of the IND. The sponsor will also include a protocol

detailing, among other things, the objectives of the first phase of the clinical trials, the parameters to be used in monitoring safety,

and the effectiveness criteria to be evaluated, if the first phase lends itself to an efficacy evaluation. Some preclinical testing may

continue even after the IND is submitted. The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA, within

the 30-day time period, places the clinical trial on a clinical hold. In such a case, the IND sponsor and the FDA must resolve any outstanding

concerns before the clinical trial can begin. Clinical holds also may be imposed by the FDA at any time before or during studies due

to safety concerns or non-compliance.

All

clinical trials must be conducted under the supervision of one or more qualified investigators in accordance with GCP. They must be conducted

under protocols detailing the objectives of the trial, dosing procedures, subject selection and exclusion criteria and the safety and

effectiveness criteria to be evaluated. Each protocol must be submitted to the FDA as part of the IND, and progress reports detailing

the results of the clinical trials must be submitted at least annually. In addition, timely safety reports must be submitted to the FDA

and the investigators for serious and unexpected adverse events. An institutional review board (“IRB”) responsible for the

research conducted at each institution participating in the clinical trial must review and approve each protocol before a clinical trial

commences at that institution and must also approve the information regarding the trial and the consent form that must be provided to

each trial subject or his or her legal representative, monitor the study until completed and otherwise comply with IRB regulations.

Human

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

The

FDA or the sponsor may suspend a clinical trial at any time on various grounds, including a finding that the research subjects or patients

are being exposed to an unacceptable health risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution

if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the drug has been associated with

unexpected serious harm to patients. Phase 1, Phase 2, and Phase 3 testing may not be completed successfully within any specified period,

if at all.

During

the development of a new drug, sponsors are given opportunities to meet with the FDA at certain points. These points may include prior

to submission of an IND, at the end of Phase 2, and before an NDA or BLA is submitted. Meetings at other times may be requested. These

meetings can provide an opportunity for the sponsor to share information about the data gathered to date, for the FDA to provide advice,

and for the sponsor and FDA to reach agreement on the next phase of development. Sponsors typically use the end of Phase 2 meeting to

discuss their Phase 2 clinical results and seek feedback on their plans for the pivotal Phase 3 clinical trial that they believe will

support approval of the new drug.

Progress

reports detailing the results of the clinical trials must be submitted at least annually to the FDA. Safety reports must be submitted

to the FDA and the clinical investigators 15 calendar days after the trial sponsor determines that the adverse event information qualifies

for reporting. The sponsor also must notify FDA of any unexpected fatal or life-threatening suspected adverse reaction as soon as possible

but in no case later than 7 calendar days after the sponsor’s initial receipt of the information. Sponsors of clinical trials of

drugs and biologics are required to register and disclose certain clinical trial information on a registry maintained by the National

Institutes of Health, at www.clinicaltrials.gov.

Concurrent

with clinical trials, sponsors usually complete additional animal studies and must also develop additional information about the chemistry

and physical characteristics of the drug and finalize a process for manufacturing the product in commercial quantities in accordance

with cGMP requirements. The manufacturing process must be capable of consistently producing quality batches of the product candidate

and, among other things, the manufacturer must develop methods for testing the identity, strength, quality and purity of the final drug.

Additionally, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the product

candidate does not undergo unacceptable deterioration over its shelf life.

U.S.

Review and Approval Processes

The

results of product development, preclinical studies and clinical trials, along with descriptions of the manufacturing process, analytical

tests conducted on the chemistry of the drug, proposed labeling, and other relevant information are submitted to the FDA as part of an

NDA or BLA requesting approval to market the product. The submission of an NDA or BLA is subject to the payment of substantial user fees;

a waiver of such fees may be obtained under certain limited circumstances. Within sixty days of receipt, the FDA initially reviews all

NDAs and BLAs submitted to ensure that they are sufficiently complete for substantive review before it accepts them for filing. The FDA

may request additional information rather than accept a NDA or BLA for filing. In this event, the NDA or BLA must be resubmitted with

the additional information. The resubmitted application also is subject to review before the FDA accepts it for filing. Once the submission

is accepted for filing, the FDA begins an in-depth substantive review. FDA may refer an NDA or BLA that is novel or that presents difficult

questions of safety or efficacy to an advisory committee for review, evaluation and recommendation on questions presented by the FDA,

which may include questions related to whether the application should be approved and under what conditions. The FDA is not bound by

the recommendation of an advisory committee, but it generally follows such recommendations. Before approving an NDA or BLA, the FDA will

typically inspect one or more clinical sites to assure compliance with GCP. Additionally, the FDA will inspect the facility or the facilities

at which the product is manufactured to assess compliance with cGMP.

The

FDA may also place other conditions on approval, including the requirement for a Risk Evaluation and Mitigation Strategy (“REMS”)

to assure the safe use of the product. If the FDA concludes a REMS is needed, the sponsor of the NDA or BLA must submit a proposed REMS,

and the FDA will not approve the application without an approved REMS. A REMS could include medication guides, physician communication

plans or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools.

Any of these limitations on approval or marketing could restrict the commercial promotion, distribution, prescription or dispensing of

a product.

The

FDA reviews an NDA to determine, among other things, whether a product is safe and effective for its intended use and whether its manufacturing

is cGMP-compliant to assure and preserve the product’s identity, strength, quality and purity. The FDA reviews a BLA to determine,

among other things whether the product is safe, pure and potent and the facility in which it is manufactured, processed, packed or held

meets standards designed to assure the product’s continued safety, purity and potency.

The

FDA may issue an approval letter following its review process if it determines that the NDA or BLA has met all applicable requirements.

Alternatively, the FDA may issue a complete response letter (“CRL”), which may require additional clinical or other data

or impose other conditions that must be met in order to secure final approval of the NDA or BLA. The applicant may either resubmit the

NDA or BLA, addressing all of the deficiencies identified in the letter, withdraw the application, or, in the case of an NDA, request

an opportunity for a hearing. The applicant also may request resolution of any dispute concerning the CRL. If the FDA denies approval

of a BLA, the applicant may request, and FDA must issue, a notice of opportunity for hearing.

NDAs

or BLAs may receive either standard or priority review. Under current FDA review goals, standard review of an NDA for a new molecular

entity (“NME”) or original BLA will be ten months from the date that the NDA or BLA is filed. A drug representing a significant

improvement in treatment, prevention or diagnosis of a serious disease or condition may receive a priority review of six months. Priority

review does not change the standards for approval but may expedite the approval process.

If

a product receives marketing authorization, the approval may be significantly limited to specific diseases and dosages or the indications

for use may otherwise be limited, which could restrict the commercial value of the product. In addition, the FDA may require a sponsor

to conduct Phase IV testing, such as clinical trials designed to further assess a drug’s safety and/or effectiveness after NDA

or BLA approval and may require testing and surveillance programs to monitor the safety of approved products which have been commercialized.

The

Pediatric Research Equity Act (“PREA”) requires a sponsor to conduct pediatric studies for most drugs and biologics with

a new active ingredient, new indication, new dosage form, new dosing regimen or new route of administration. Under PREA, original NDAs

and BLAs and certain supplemental applications must contain a pediatric assessment unless the sponsor has received a deferral or waiver.

The required assessment must assess the safety and effectiveness of the product for the claimed indications in all relevant pediatric

subpopulations and support dosing and administration for each pediatric subpopulation for which the product is safe and effective. The

sponsor or FDA may request a deferral of pediatric studies for some or all of the pediatric subpopulations. A deferral may be granted

for several reasons, including a finding that the drug or biologic is ready for approval for use in adults before pediatric studies are

complete or that additional safety or effectiveness data needs to be collected before pediatric studies can begin.

The

Best Pharmaceuticals for Children Act (“BPCA”) provides NDA holders a six-month period of exclusivity attached to any patent

or regulatory exclusivity listed in the Orange Book, and BLA holders a six-month period of exclusivity attached to any unexpired regulatory

exclusivity, if certain conditions are met. Conditions for pediatric exclusivity include a determination by the FDA that information

relating to the use of a new drug in the pediatric population may produce health benefits in that population, a written request by the

FDA for pediatric studies, completion of the studies in accordance with the written request, and submission of reports from the requested

studies to the FDA. The issuance of a written request does not require the sponsor to undertake the described studies.

Patent

Term Restoration and Marketing Exclusivity

Depending

upon the timing, duration and specifics of FDA approval of our product candidates, some of our U.S. patents may be eligible for limited

patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, referred to as the Hatch-Waxman Amendments.

The Hatch-Waxman Amendments permit a patent restoration term of up to five years as partial compensation for effective patent term lost

due to time spent during product development and the FDA regulatory review process. However, patent term restoration cannot extend the

remaining term of a patent beyond a total of 14 years from the product’s approval date. The patent term restoration period is generally

one-half the time between the effective date of an IND and the submission date of an NDA or BLA, plus the time between the submission

date of an NDA or BLA and the approval of that application, except that the period is reduced by any time during which the applicant

failed to exercise due diligence. Only one patent applicable to an approved drug may be extended, and the extension must be applied for

prior to expiration of the patent. The United States Patent and Trademark Office, in consultation with the FDA, reviews and approves

the application for any patent term extension or restoration.

Biologics

Price Competition and Innovation Act of 2009 (BPCIA)

The

BPCIA amended the PHSA to create an abbreviated approval pathway for biosimilar and interchangeable biosimilar products and provide for

a twelve-year exclusivity period for the first approved biological product, or reference product, against which a biosimilar or interchangeable

biosimilar application is evaluated. A biosimilar product is defined as one that is highly similar to a reference product notwithstanding

minor differences in clinically inactive components and for which there are no clinically meaningful differences between the biological

product and the reference product in terms of the safety, purity and potency of the product. An interchangeable biosimilar product is

a biosimilar product that, subject to state pharmacy laws, may be substituted for the reference product without the intervention of the

health care provider who prescribed the reference product.

The

biosimilar applicant must demonstrate that the product is biosimilar based on data from: (1) analytical studies showing that the biosimilar

product is highly similar to the reference product; (2) animal studies (including toxicity); and (3) as applicable, one or more clinical

studies to demonstrate safety, purity and potency in one or more appropriate conditions of use for which the reference product is approved.

In addition, the applicant must show that the biosimilar and reference products have the same mechanism of action for the conditions

of use on the label, route of administration, dosage and strength, and the production facility must meet standards designed to assure

product safety, purity and potency.

An

application for a biosimilar product may not be submitted until four years after the date on which the reference product was first approved.

The first approved interchangeable biosimilar product will be granted an exclusivity period of up to one year after it is first commercially

marketed, but the exclusivity period may be shortened under certain circumstances.

Orphan

Drug Designation

Under

the Orphan Drug Act, the FDA may grant orphan drug designation to a drug intended to treat a rare disease or condition, which is generally

a disease or condition that affects fewer than 200,000 individuals in the U.S., or more than 200,000 individuals in the U.S. and for

which there is no reasonable expectation that the cost of developing and making available in the U.S. a drug for this type of disease

or condition will be recovered from sales in the U.S. for that drug. Orphan drug designation must be requested before submitting an NDA

or BLA. After the FDA grants orphan drug designation, the identity of the therapeutic agent and its potential orphan use are disclosed

publicly by the FDA. Orphan drug designation does not itself convey any advantage in or shorten the duration of the regulatory review