UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

☒ANNUAL REPORT PURSUANT TO SECTION 13

OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2024

☐TRANSITION REPORT PURSUANT TO SECTION

13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-36694

Protara Therapeutics, Inc.

(Exact name of registrant as specified in its charter)

345 Park Avenue South

3rd Floor

New York, NY

(Address of Principal Executive Offices)

10010

(Zip Code)

(646)844-0337

(Registrant’s telephone number, including

area code)

Securities registered pursuant to Section 12(b)

of the Act:

Title of each class Trading Symbol(s) Name of each exchange on which registered

Common Stock, par value $0.001 per share TARA The Nasdaq Capital Market

Securities registered pursuant to Section 12(g)

of the Act: None

Indicate by check mark if the registrant is a

well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not

required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant

(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months

(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements

for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant

has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405

of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes

☒ No ☐

Indicate by check mark whether the registrant

is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.

See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and

“emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐

Non-accelerated filer ☒ Smaller reporting company ☒

Emerging growth company ☐

If an emerging growth company, indicate by check

mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting

standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant

has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial

reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or

issued its audit report. ☐

If securities are registered pursuant to Section

12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction

of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error

corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s

executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant

is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

As of June 28, 2024, the last business day of

the registrant’s most recently completed second fiscal quarter, the aggregate market value of the registrant’s common stock

held by non-affiliates of the registrant was approximately $35.0 million, based on the closing price of the registrant’s common

stock on the Nasdaq Capital Market on June 28, 2024 of $2.08 per share.

As of February 28, 2025, 36,767,465 shares of

the registrant’s common stock, $0.001 par value, were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive

Proxy Statement to be filed with the Securities and Exchange Commission by April 30, 2025 are incorporated by reference into Part III

of this report.

PROTARA THERAPEUTICS, INC.

TABLE OF CONTENTS

FORM 10-K

For the Year Ended December 31, 2024

Page

PART I

Item 1. Business 3

Item 1A. Risk Factors 34

Item 1B. Unresolved Staff Comments 67

Item 1C. Cybersecurity 67

Item 2. Properties 69

Item 3. Legal Proceedings 69

Item 4. Mine Safety Disclosures 69

PART II

Item 6. Reserved 70

Item 7A. Quantitative and Qualitative Disclosures About Market Risk 76

Item 8. Financial Statements and Supplementary Data 77

Item 9A. Controls and Procedures 105

Item 9B. Other Information 106

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 106

PART III

Item 10. Directors, Executive Officers and Corporate Governance 107

Item 11. Executive Compensation 107

Item 14. Principal Accountant Fees and Services 107

PART IV

Item 15. Exhibits and Financial Statement Schedules 108

PART I

FORWARD-LOOKING STATEMENTS

This Annual Report on Form

10-K, including sections entitled “Business,” “Risk Factors,” and “Management’s Discussion

and Analysis of Financial Condition and Results of Operations” and other materials accompanying this Annual Report on Form 10-K

contain forward-looking statements or incorporate by reference forward-looking statements. Statements, other than statements of historical

facts, contained in this document, including statements regarding our business, operations and financial performance and conditions, as

well as our plans, objectives and expectations for our business operations and financial performance and condition, are forward-looking

statements. These statements relate to future events or to our future financial performance and involve known and unknown risks, uncertainties

and other factors which may cause our actual results, performance or achievements to be materially different from any future results,

performance or achievements expressed or implied by the forward-looking statements. In some cases, you can identify these forward-looking

statements by terminology such as “believes,” “expects,” “potential,” “continues,” “may,”

“will,” “should,” “seek,” “approximately,” “predict,” “intend,”

“plans,” “estimates,” “anticipates” or the negative version of these terms or other comparable terminology.

These forward-looking statements include,

but are not limited to, statements about:

● expectations regarding the safety and efficacy of our product candidates;

● expectations regarding the timing, costs and outcomes of our clinical trials;

● expectations regarding potential market size;

● developments and projections relating to our competitors and industry;

● our ability to remain listed on the Nasdaq Capital Market, or Nasdaq;

● the timing or likelihood of regulatory filings and approvals;

● our ability to protect our intellectual property position; and

We undertake no obligation

to update or revise any of the forward-looking statements contained in this Annual Report on Form 10-K after the date of this report,

except as required by law or the rules and regulations of the U.S. Securities and Exchange Commission, or SEC. We caution readers not

to place undue reliance on forward-looking statements. Our actual results could differ materially from those discussed in this Annual

Report on Form 10-K. The forward-looking statements contained in this Annual Report on Form 10-K, and other written and oral forward-looking

statements made by us from time to time, are subject to certain risks and uncertainties that could cause actual results to differ materially

from those anticipated in the forward-looking statements, including the risks, uncertainties and assumptions identified under the heading

“Risk Factors” in this Annual Report on Form 10-K.

SUMMARY OF RISKS AFFECTING

OUR BUSINESS

Below is a summary of

the principal factors that make an investment in our securities speculative or risky. This summary does not address all of the risks that

we face. Additional discussion of the risks and uncertainties summarized in this risk factor summary, and other risks and uncertainties

that we face, are set forth in Part I, Item 1A, Risk Factors, and should be carefully considered, together with other information in this

Annual Report on Form 10-K and our other filings with the SEC before making investment decisions regarding our securities.

● We have a limited operating history and have never generated any revenues.

Item 1. Business.

Overview

We are a New York City based

clinical-stage biopharmaceutical company committed to advancing transformative therapies for the treatment of cancer and rare diseases.

We were founded on the principle of applying modern scientific, regulatory or manufacturing advancements to established mechanisms in

order to create new development opportunities. We prioritize creativity, diverse perspectives, integrity and tenacity to expedite our

goal of bringing life-changing therapies to people with limited treatment options.

Our portfolio includes two development programs utilizing TARA-002,

an investigational cell therapy based on the broad immunopotentiator, OK-432, which was originally granted marketing approval by the Japanese

Ministry of Health and Welfare as an immunopotentiating cancer therapeutic agent. TARA-002 is currently approved in Japan and Taiwan for

lymphatic malformations, or LMs, and multiple oncologic indications. We have secured worldwide rights to the asset excluding Japan and

Taiwan and are exploring its use in oncology and rare disease indications. TARA-002 was developed from the same master cell bank of genetically

distinct group A Streptococcus pyogenes as OK-432 (marketed as Picibanil® in Japan by Chugai Pharmaceutical Co., Ltd., or Chugai Pharmaceutical).

We are currently developing TARA-002 in non-muscle invasive bladder cancer, or NMIBC, and in LMs.

Our lead oncology program

is TARA-002 in NMIBC, which is cancer found in the tissue that lines the inner surface of the bladder that has not spread into the bladder

muscle. Bladder cancer is the sixth most common cancer in the United States, with NMIBC representing approximately 80% of bladder cancer

diagnoses. Approximately 65,000 patients are diagnosed with NMIBC in the United States each year. Very few new therapeutics have been

approved for NMIBC since the 1990s and the current standard of care for NMIBC includes intravesical Bacillus Calmette-Guérin,

or BCG.

Following the completion of Phase 1a and 1b clinical trials to

evaluate safety, preliminary efficacy and the dosing of TARA-002, at the 40KE (Klinische Einheit, or KE, is a German term indicating a

specified weight of dried cells in vial) dose level, we initiated and are currently conducting our ADVANCED-2 clinical trial. ADVANCED-2

is a Phase 2 open-label trial evaluating intravesical TARA-002 in at least 102 patients with high-grade carcinoma in situ, or CIS in the

U.S., Canada, Argentina, and Ukraine. Cohort A of the Phase 2 trial is expected to enroll 27 patients with CIS (± Ta/T1 with Ta

defined as non-invasive papillary carcinoma and T1 as defined as carcinoma invading the lamina propria), BCG-Naïve or BCG-Exposed,

who have not received intravesical BCG for at least 24 months prior to CIS diagnosis. Cohort B of the Phase 2 trial is expected to enroll

75-100 patients with BCG-Unresponsive CIS (± Ta/T1) and is expected to be registrational based on the FDA’s August 2024 Draft

Guidance on BCG-Unresponsive Nonmuscle Invasive Bladder Cancer: Developing Drugs and Biological Products for Treatment.

We expect to complete Cohort A (BCG-Naïve or BCG-Exposed)

of the clinical trial and share 12-month interim data by mid-2025 and complete a interim analysis in Cohort B (BCG-Unresponsive) of the

clinical trial by the end of 2025. The interim analysis will include data from approximately 25 six-month evaluable patients.

In addition to the ADVANCED-2

trial, we plan to continue to explore the anti-tumor activity related to the administration of TARA-002 via systemic administration. We

continue to believe that combination therapy may play a meaningful role in the NMIBC treatment paradigm and intend to evaluate TARA-002

in combination with other therapies. Given what we have observed to date of TARA-002’s mechanism of action and safety profile, we

believe it has strong potential as a combination agent, and we continue to evaluate potential combination therapy options for our clinical

program. We also continue to conduct non-clinical studies on TARA-002 to better characterize the mechanism of action to help us understand

how TARA-002 may perform in potential combinations with other agents used to treat NMIBC, and to help us define other cancer targets for

TARA-002, both within urothelial cancer and other types of cancer affecting different parts of the body.

We are also pursuing intravenous, or IV, Choline Chloride, an

investigational phospholipid substrate replacement therapy, for patients receiving parenteral support, or PS, which includes both nutrition

and fluids. Choline is a known important substrate for phospholipids that are critical for healthy liver function and also plays an important

role in modulating gene expression, cell membrane signaling, brain development, neurotransmission, muscle function and bone health. PS

patients are unable to synthesize choline from enteral nutrition sources, and there are currently no available PS formulations containing

choline. Every year in the U.S. there are approximately 90,000 people who require PS at home and of those approximately 30,000 are on

long-term PS. IV Choline Chloride has the potential to become the first FDA-approved IV choline formulation for PS patients.

An IV formulation of choline

is recommended for patients on parenteral nutrition, or PN, by the American Society for Parenteral and Enteral Nutrition, or ASPEN, in

their Recommendations for Changes in Commercially Available Parenteral Multivitamin and Multi–Trace Element Products, as well as

by the European Society for Clinical Nutrition and Metabolism, or ESPEN, in their Guideline on Home Parenteral Nutrition. IV Choline Chloride

has been granted Orphan Drug Designation by the FDA for the prevention and/or treatment of choline deficiency in patients on long-term

PN. The U.S. Patent and Trademark Office, or USPTO, has issued us a U.S. patent claiming a choline composition and a U.S. patent claiming

a method for treating choline deficiency with a choline composition, each with a term expiring in 2041.

In April 2024, we announced

alignment with the FDA on a registrational path forward for IV Choline Chloride. Previously, we had been pursuing an indication in intestinal

failure-associated liver disease, or IFALD, and following feedback from the FDA, are pursuing a broader indication as a source of choline

when oral or enteral nutrition is not possible, insufficient, or contraindicated. Feedback from the FDA on our IV Choline Chloride program

indicated that a single study with an endpoint of restoring choline levels in PS patients could serve as the basis for a regulatory submission

for IV Choline Chloride. We plan to advance the development of IV Choline Chloride as a source of choline for adult and adolescent patients

on long-term PS and intend to initiate THRIVE-3, a registrational Phase 3 clinical trial in the first half of 2025. THRIVE-3 is a seamless

Phase 2b/3 trial with a dose confirmation portion (n=24) followed by a double-blinded, randomized, placebo-controlled portion to assess

the efficacy and safety of IV Choline Chloride over 24 weeks in adolescents and adults on long-term PS when oral or enteral nutrition

is not possible, insufficient, or contraindicated (n=100). The primary endpoint of the clinical trial is a pharmacokinetic, or PK, endpoint

measuring the change from baseline in plasma choline concentration. We also plan to include a number of secondary endpoints related to

liver, bone, and memory. The FDA has also granted IV Choline Chloride Fast Track Designation as a source of choline when oral or enteral

nutrition is not possible, insufficient, or contraindicated.

In September 2024, we presented the results of THRIVE-1, a prospective,

observational study evaluating the prevalence of choline deficiency and liver injury in patients dependent on PS in the U.S., U.K, and

Europe at the ESPEN Congress. The study found that 78% of patients who are dependent on PS were choline deficient, and that 63% of choline

deficient participants had liver dysfunction, including steatosis, cholestasis and hepatobiliary injury, underscoring the need for IV

Choline supplementation in this patient population.

We are also pursuing TARA-002

in LMs, which are rare, non-malignant cysts of the lymphatic vascular system that primarily form in the head and neck region of children

before the age of two. In July 2020, the FDA granted Rare Pediatric Disease Designation for TARA-002 for the treatment of LMs and in May

2022 the European Commission granted Orphan Drug Designation to TARA-002 for the treatment of LMs. In addition to the clinical experience

in Japan, we have secured the rights to a dataset from one of the largest ever conducted Phase 2 trials in LMs, in which OK-432 was administered

via a compassionate use program led by the University of Iowa to over 500 pediatric and adult patients. We have an open investigational

new drug application, or IND, for TARA-002 in LMs with the Vaccines and Related Products Division of the FDA, or Vaccines Division.

In October 2023, we initiated STARBORN-1, which is a Phase 2 single-arm,

open-label, prospective clinical trial to evaluate the safety and efficacy of intracystic injection of TARA-002 for the treatment of macrocystic

and mixed-cystic LMs (≥ 50% macrocystic disease) in participants six months to less than 18 years of age in the U.S. Including an age

de-escalation safety lead-in, the clinical trial will enroll approximately 30 patients who will receive up to four injections of TARA-002

spaced approximately six weeks apart. The primary endpoint of the clinical trial is the proportion of participants with macrocystic LMs

and mixed-cystic LMs who demonstrated clinical success, defined as having either a complete response (90% to 100% reduction from baseline

in total LM volume) or substantial response (60% to less than 90% reduction in total LM volume) as measured by axial imaging.

In September 2024, we announced interim data from the first safety

cohort in the STARBORN-1 trial. Of three patients treated in the first cohort, which enrolled individuals six years to less than 18 years

of age, two patients treated with TARA-002 achieved a complete response after receiving one injection of TARA-002; the responses were

seen in a patient with a macrocystic LM and a patient with a maxillofacial cyst called a ranula. The tolerability observed in this cohort

was consistent with patients’ historical experience with OK-432 and included treatment emergent adverse events, or TEAEs, of pain,

swelling, fatigue and body temperature increases. All TEAEs were mild to moderate and resolved. We expect to provide an interim update from our STARBORN-1 trial by the end of the first half of 2025.

We believe TARA-002 may also have the potential to be used to treat

other maxillofacial cysts based on the historical literature from the TARA-002 predecessor, OK-432, as well as recent data from the STARBORN-1

trial in which the one pediatric patient with a ranula achieved a complete response after a single 1KE injection of TARA-002. While completing

STARBORN-1 in LMs is our priority, we believe there may be an opportunity in the future to explore the potential of TARA-002 to treat

different types of maxillofacial cysts.

We have devoted substantial efforts to the development of these programs

and do not have any approved products and have not generated any revenue from product sales. Neither TARA-002 nor IV Choline Chloride

have been approved for use for any indication by the FDA. We do not expect to generate revenues in the near-term, and it is possible we

may never generate revenues in the future. To finance our current strategic plans, including the conduct of ongoing and future clinical

trials and further research and development costs, we will need to raise additional capital. See “Item 7. Management’s Discussion

and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” for additional information

about our liquidity and capital resource needs.

Our Product Candidate Pipeline

The following chart summarizes

the current status of our product candidate pipeline:

† Trial also includes BCG-Exposed patients.

Our Corporate Strategy:

We are an oncology and rare

disease company focused on applying modern scientific advancements to established mechanisms to deliver efficient de-risked clinical programs.

Leveraging the drug development experience of our management team, our goal is to build a leading biopharmaceutical company focused on

bringing life-saving therapies to patients with significant unmet needs. Our current key initiatives are listed below:

1. Progress the registrational clinical

trial of TARA-002 for the treatment of BCG-Unresponsive NMIBC and intend to discuss with the FDA a protocol for a registrational trial

evaluating TARA-002 in BCG-Naïve NMIBC

Progress the Phase 2 ADVANCED-2 registrational trial to assess

the safety and anti-tumor activity of TARA-002 in BCG-Unresponsive NMIBC patients with CIS and complete the proof-of-concept cohort of

the clinical trial evaluating TARA-002 in BCG-Naïve NMIBC patients with CIS. Discuss with the FDA the design of, and initiate, a

registrational trial evaluating TARA-002 in patients with BCG-Naïve NMIBC.

2. Expand the NMIBC program for TARA-002

into systemic priming dosing and combination therapy

Complete non-clinical studies

to determine the best approach to administering a systemic priming dose of TARA-002 prior to intravesical installation of TARA-002 in

NMIBC patients. Define the appropriate combination approach for TARA-002 and initiate a proof-of-concept study to evaluate TARA-002 in

combination with a checkpoint inhibitor for the treatment of BCG-Unresponsive NMIBC.

3. Initiate the registrational seamless

Phase 2b/3 trial evaluating IV Choline Chloride in patients receiving PS

We intend to initiate the

Phase 2b/3 THRIVE-3 registrational trial evaluating IV Choline Chloride in patients receiving PS in the first half of 2025.

4. Progress the Phase 2 clinical trial of

TARA-002 in patients with macrocystic and mixed-cystic LMs; continue exploration of TARA-002 in other maxillofacial cysts

Based on the robust dataset for the originator product OK-432

in LMs and the full Clinical Study Report, or CSR, of the randomized Phase 2 clinical trial of OK-432 in LMs led by the University of

Iowa, we are encouraged by the potential for TARA-002 to treat patients with LMs. We initiated the STARBORN-1 Phase 2 trial evaluating

TARA-002 in pediatric patients with macrocystic and mixed-cystic LMs and expect to progress the initial safety lead-in and expansion cohorts

of the clinical trial in 2025. Given the extensive body of literature of the use of OK-432 in the treatment of various maxillofacial cysts,

we plan to develop a clinical program to explore the potential of TARA-002 in maxillofacial cysts.

5. Build our operational capabilities to

successfully commercialize our oncology and rare disease programs

As we approach regulatory

filings and possible approvals of our oncology and rare disease investigational therapies, we intend to build our commercial infrastructure

to successfully launch and commercialize our products in key geographies where we can maximize value. Across the rare disease populations

(LMs and patients on PS) as well as bladder cancer, where the patient population is large, a high volume of patients are concentrated

in a small number of centers of excellence. We believe this concentration of treatment centers will potentially enable us to efficiently

cover our addressable market with a relatively small commercial footprint. Across our rare disease programs, there is significant unmet

need and no available FDA-approved therapies to meet the needs of these patients currently. In NMIBC, there is also a significant unmet

need, and we believe TARA-002’s important attributes, such as fast, simple administration by a nurse with no cumbersome additional

steps or required safety protocols and a favorable tolerability profile, will position the potential therapy favorably with patients and

physicians versus other treatment options.

Our Pipeline

TARA-002

TARA-002, our lead program,

is an investigational cell therapy developed from the master cell line of the same genetically distinct Streptococcus pyogenes (group

A, type 3) Su strain as OK-432, a broad immunopotentiator marketed as Picibanil® in Japan by Chugai Pharmaceutical. We are using the

same regulatory starting materials as OK-432 and manufacture TARA-002 using an updated version of the same proprietary processes used

to manufacture OK-432. We have designated this product candidate as TARA-002 in order to differentiate the regulatory path in the United

States and other geographies from that of OK-432 in Japan.

We entered into an agreement

with Chugai Pharmaceutical in June 2019, as amended in July 2020, to support our development of TARA-002. The agreement provides us with

exclusive access to certain materials and documents relating to OK-432 including the master cell bank of Streptococcus pyogenes used in

the manufacturing of OK-432. Additionally, the agreement provides technical support during a certain period. We have utilized the materials,

proprietary manufacturing process and technical support provided by Chugai Pharmaceutical to support a contract development and manufacturing

organization, or CDMO, in the production of TARA-002 at a current Good Manufacturing Practices, or cGMP, compliant facility in the United

States. Under the agreement with Chugai Pharmaceutical, we have sole responsibility for the development and commercialization of TARA-002

worldwide, excluding Japan and Taiwan. This agreement is exclusive through June 17, 2030, or following any termination of the agreement

by either party.

In Japan, OK-432 is indicated

for: the treatment of lymphangiomas (lymphatic malformations); the prolongation of survival time in patients with gastric cancer (postoperative

cases) or primary lung cancer in combination with chemotherapy; and the reduction of cancerous pleural effusion or ascites in patients

with lung cancer or gastrointestinal cancer respectively, head and neck cancer (maxillary cancer, laryngeal cancer, pharyngeal cancer,

and tongue cancer) and thyroid cancer that are resistant to other drugs.

We are developing TARA-002

for the treatment of NMIBC and LMs initially in the United States, and plan to also seek approval in other regions in the future and may

also explore additional indications where its utility as an immunopotentiator has been hypothesized to be of therapeutic benefit.

TARA-002 in NMIBC

Disease Overview

Bladder cancer is the sixth

most common cancer in the United States, with NMIBC representing approximately 80% of bladder cancer diagnoses. NMIBC is cancer found

in the tissue that lines the inner surface of the bladder that has not spread into the bladder muscle. There are three subtypes of NMIBC:

non-invasive papillary carcinoma, or Ta, CIS, and carcinoma invading the lamina propria, or T1. Among the types of NMIBC, Ta accounts

for most NMIBC cases (70%), whereas T1 and CIS account for 20% and 10%, respectively.

There are approximately 65,000 incident cases of NMIBC in the United

States every year, and based upon currently available data we believe that approximately 45% (approximately 30,000) are made up of high-grade

tumor types that are considered higher risk, and therefore candidates for immunotherapies, such as TARA-002. In addition, NMIBC has one

of the highest rates of recurrence with the five-year rate estimated at up to 70%.

Treatment

Treatment for NMIBC is typically

targeted to reduce unresectable persistence, recurrence after resection and to prevent disease progression to muscle-invasive bladder

cancer. The initial treatment for NMIBC includes cystoscopy and complete transurethral resection of the bladder tumor, or TURBT, for papillary

Ta or T1, or biopsy for CIS. A single postoperative instillation of intravesical chemotherapy is recommended in patients with low risk

of progression, and for patients with intermediate and high-risk disease, a longer course of intravesical therapy is administered. The

most efficacious intravesical agent to date has been BCG, a live attenuated form of Mycobacterium bovis. BCG has been the subject

of multiple supply shortages in the US in the past decade due to the inability to meet demand to treat the large population of patients

with NMIBC. There has been a significant increase in bladder cancer recurrence and progression with an escalated number of patients who

require cystectomy. As such, with the current BCG shortage and limited effective alternate therapies or dosing strategies, there continues

to be a significant unmet need for treatment options for patients with NMIBC.

Clinical Development

We conducted a Phase 1 open-label clinical trial to evaluate TARA-002

in treatment-naïve and treatment-experienced NMIBC patients with CIS and Ta, known as the ADVANCED-1 trial. In the initial dose escalation

phase of the clinical trial, patients received six weekly intravesical doses of TARA-002, evaluating the 10KE, 20KE and 40KE doses. The

primary objective of the clinical trial was to evaluate the safety, tolerability and preliminary signs of anti-tumor activity of TARA-002,

with the goal of establishing a recommended Phase 2 dose.

Data from the ADVANCED-1 trial suggested that intravesical TARA-002

was generally well tolerated at the three dose levels evaluated in the initial phase of the clinical trial (10KE, 20KE, and 40KE), and

no dose limiting toxicities were observed. A maximum tolerated dose was not determined, and we selected the 40KE dose for use in subsequent

clinical trials. The majority of reported adverse events were Grades 1 and 2 across all dose levels, and TEAEs, as assessed by study investigators,

were in line with typical responses to bacterial immunopotentiation and included fatigue, headache, fever and chills. The most common

urinary symptoms were urinary urgency, urinary frequency, urinary tract pain/burning, incomplete emptying and bladder spasm. Most bladder

irritations resolved soon after administration, or in a few hours to a few days. A total of nine patients were enrolled in the dose escalation

portion of the study through the 40KE dose. Of those, three patients with CIS, one of whom was a heavily pre-treated BCG-Unresponsive

patient, achieved a complete response, or CR, at the 20KE dose, and tumor regression was observed in the other two patients. Results from

six patients with high-grade, non-invasive papillary, or HGTa, tumors showed five of six patients with high-grade recurrence free survival,

or HGRFS, at week 12. The patient who did not achieve HGRFS was dosed at 10KE, the lowest dose of TARA-002 offered in the clinical trial.

An exploratory cohort of dose escalation at the 80KE was also completed demonstrating similar tolerability to the 40KE dose.

Additionally, we completed

an open-label expansion clinical trial, or ADVANCED-1EXP, evaluating intravesical TARA-002 at the 40KE dose in CIS patients, including

BCG-Naïve, BCG-Unresponsive, and BCG-Experienced patients and are conducting an open-label Phase 2 clinical trial, or ADVANCED-2,

assessing intravesical TARA-002 in NMIBC patients with CIS (± Ta/T1) who are BCG-Naïve (n=27) and BCG-Unresponsive (n≈100).

In April 2024, we announced

positive data from three-month evaluable NMIBC patients with CIS pooled across our clinical studies, including ADVANCED-1 Phase 1a, ADVANCED-1

EXP Phase 1b and ADVANCED-2 Phase 2 trials of TARA-002 in patients with high-risk NMIBC, including BCG-Unresponsive, BCG-Experienced and

BCG-Naïve patients. The overall three-month CR rate prior to reinduction for the 16 evaluable patients was 38%, with a CR rate of

63% in CIS-only patients and 13% in patients with CIS +Ta/T1 (T1 is defined as carcinoma invading the lamina propria). A 43% CR rate was

observed in BCG-Unresponsive/Experienced patients. TARA-002 demonstrated a favorable safety and tolerability profile. The majority of

reported adverse events were Grades 1 and 2 across all dose levels, and there were no Grade 3 or higher TEAEs. TEAEs as assessed by study

investigators, were in line with typical responses to bacterial immunopotentiation, and included fatigue, headache, fever and chills.

The most common urinary symptoms were urinary urgency, urinary frequency, urinary tract pain/burning, incomplete emptying and bladder

spasm. Most bladder irritations resolved in a few hours to a few days. Additional details regarding the data, which support the potential

for TARA-002 in treating high risk patients can be found in the following table:

Three Month Evaluable Patients

# Patients # of CRs CR %

BCG-Unresponsive/Experienced

CIS +Ta/T1 1 - - %

BCG-Naïve

By Stage of Disease at Baseline

By Study

Data cutoff date: March 19, 2024

In December 2024, we presented

interim results from our ongoing Phase 2 ADVANCED-2 clinical trial of TARA-002 in patients with NMIBC. The dataset included 20 patients

who were evaluable at three months, 18 patients who were evaluable at six months and three patients who were evaluable at nine months

with a data cutoff of November 19, 2024. The CR rate across BCG exposures was 72% (13/18) at six months and 70% (14/20) at any time, with

100% (9/9) of patients maintaining a CR from three months to six months. In addition, two of three patients maintained a CR at nine months.

In the pivotal cohort of the ADVANCED-2 trial in BCG-Unresponsive patients, the CR rate was 100% (4/4) at six-months and 80% (4/5) at

any time. In the proof-of concept cohort of BCG-Naïve patients, the CR rate was 64% (9/14) at six months and 67% (10/15) at any time.

BCG-Unresponsive N=5 (%) BCG-Naïve N=15 (%) Combined N=20 (%)

High-grade CR at timepoint

High-grade CR at Month 6 by Baseline Diagnosis

Data cutoff date: November 19, 2024

The BCG-Unresponsive cohort has been designed to be registrational

and aligned with the FDA’s August 2024 Draft Guidance BCG-Unresponsive Nonmuscle Invasive Bladder Cancer: Developing Drugs and Biological

Products for Treatment. Clinical trial subjects receive an induction course of six weekly intravesical instillations, and following mandatory

biopsy at three months, receive either a reinduction course of six weekly intravesical instillations of TARA-002, or the first maintenance

course of three weekly installations every three months, for an additional 12 months. We anticipate sharing interim 12-month data from

the ADVANCED-2 trial by mid-2025 and results from a interim analysis of approximately 25 six-month evaluable BCG-Unresponsive patients

by the end of 2025. We intend to discuss with the FDA a protocol for a registrational trial evaluating TARA-002 in BCG-Naïve patients,

and expect to provide an update on the design of this clinical trial following regulatory alignment.

Non-clinical Development

We continue to conduct non-clinical

studies on TARA-002 to better characterize the mechanism of action to help us understand how TARA-002 may perform in potential combinations

with other agents used to treat NMIBC. We have completed non-clinical studies comparing TARA-002 to BCG. Mechanistically, TARA-002 and

BCG are similar in that they are both intravesically administered broad-spectrum immune potentiators that drive a TH-1 pro-inflammatory

response and have a preference to M1 polarization. We found several important differences when we compared the two agents in non-clinical

studies that we believe make TARA-002 a potentially compelling new therapy. We found that TARA-002 is a NOD2/TLR 2 agonist (NOD2 is defined

as Nucleotide-binding oligomerization domain 2; TLR 2 is defined as toll-like receptor 2) and BCG is a toll-like receptor 4, or TLR4,

agonist. When we compared TARA-002 directly to BCG, in a cytotoxicity assay, we found that TARA-002 resulted in significantly stronger

tumor cell killing compared to BCG. We also found that TARA-002 resulted in significantly higher upregulation of key pro-inflammatory

cytokines and chemokines, including tumor necrosis factor alpha, or TNF-α, and interferon gamma, or interferon-γ. We also

observed that TARA-002 meaningfully down-regulated Interleukin-8, or IL-8, which at prolonged elevations is thought to increase risk for

tumor recurrence in bladder cancer after BCG therapy.

The approved indications

for OK-432 in Japan are based on systemic administration of the drug. There is a significant existing safety database with this route

of administration for OK-432 in Japan. In addition, we have completed subcutaneous systemic toxicology studies of TARA-002 and we intend

to initiate a proof-of-concept study exploring systemic administration of TARA-002 in 2025.

Regulatory Interactions

In October 2021, we announced that the Office of Tissues and Advanced

Therapies Division, now referred to as the Office of Therapeutic Products, of the FDA’s Center for Biologics Evaluation and Research,

or CBER, cleared our IND application for TARA-002 in NMIBC. We have had ongoing dialogue with the FDA to align on the potential clinical

trial design of a registrational trial of TARA-002 for the treatment of BCG-Naïve NMIBC, as well as a combination trial with TARA-002

and a checkpoint inhibitor for the treatment of NMIBC and the design of a clinical trial evaluating the systemic priming dose of TARA-002

in BCG-Naïve and BCG-Exposed NMIBC.

In addition, we have had interactions with regulatory authorities

in six countries outside the U.S. in order to open clinical trial sites for the ADVANCED-2 trial in these international locations.

Manufacturing

TARA-002 is

manufactured using an equivalent, but modernized, proprietary manufacturing process as is used to produce OK-432 by Chugai

Pharmaceutical. We propagated a master cell bank using the same master cell line of the genetically distinct strain of Streptococcus

pyogenes (A group, type 3) Su strain as OK-432. The bacteria is rendered inactive during the manufacturing process, consistent with

the process used for OK-432. We have contracted a cGMP compliant CDMO to manufacture TARA-002.

The manufacturing facility

of our CDMO for TARA-002 currently has a twenty million vial annual capacity with the ability to expand capacity by five hundred percent.

With TARA-002’s efficient two-hour doubling time, we have an approximate two-week batch completion rate and manufactured 47 successful

consecutive batches by the end of 2024. The facility which manufactures TARA-002 has been inspected by the FDA and at the most recent

inspection no Form 483s were issued.

IV Choline Chloride for PS Patients

IV Choline Chloride is an

IV substrate therapy in development for patients receiving PS.

Choline is a known important

substrate for phospholipids, a source of methyl groups needed for many steps in metabolism and plays important roles in modulating gene

expression, cell membrane signaling, lipid transport, metabolism, liver health, brain development, neurotransmission, muscle function

and bone health. The only way to reliably replenish choline is through exogenous consumption. Patients receiving PS cannot sufficiently

absorb adequate levels of choline and available PS components do not contain sufficient amounts of choline to correct this deficit. The

use of choline for PS patients is included in key professional medical society recommendations, including ASPEN. IV Choline Chloride has

been granted Orphan Drug Designation, or ODD, by the FDA for the prevention and/or treatment of choline deficiency in patients on long-term

PN.

We have entered into a license

agreement with Dr. Alan Buchman for exclusive rights to the IND, ODD and other regulatory assets related to IV Choline Chloride, as well

as exclusive rights to the data from previously conducted Phase 1 and Phase 2 clinical trials led by Dr. Buchman.

The results of Dr. Buchman’s

randomized, controlled, Phase 2 clinical trial demonstrated that treatment with IV Choline Chloride resulted in normalization of plasma-free

choline concentrations, improvement of hepatic steatosis, and statistically significant improvement in cholestasis in patients dependent

on PS.

Disease Overview

PN typically consists of carbohydrate (typically derived from

dextrose), fat (lipid emulsion with essential fatty acids), protein (in the form of a balanced free amino acid solution), electrolytes,

trace elements, and most vitamins and essential nutrients known to be required by the human body, with the notable exception of choline.

PS is a medical treatment, representing PN plus fluids and is used to manage and treat malnourishment and is indicated when there is impaired

gastrointestinal function and contraindications to enteral nutrition. The American Society for Parenteral and Enteral Nutrition and the

Academy of Nutrition and Dietetics’ Dietitians in Nutrition Support both recommend that choline be required in PN products (Vanek

et al., 2012); however, there are currently no FDA-approved intravenous choline chloride products. Humans can produce choline endogenously

in the liver, but the amount that the body naturally synthesizes is not sufficient to meet human needs, making it an essential nutrient.

As a result, humans must obtain choline from their diets. The development of IV Choline Chloride is intended to provide a source of choline

when oral or enteral nutrition is not possible, insufficient, or contraindicated.

Clinical Development

In Dr. Buchman’s Phase

2 randomized, double-blind, controlled 24-week clinical trial, patients (n=15) receiving nightly PN for > 85% of their nutritional

needs (for at least 12 weeks prior to entry) were randomized to receive via IV infusion (10-12 hours) their usual PN with placebo (n =

8), or PN to which 2g IV Choline Chloride was added (n = 7).

In the IV Choline Chloride

group, mean choline levels were within or greater than the estimated normal range (i.e., 6.7 to 26.9 nmol/mL) throughout the 24-week trial

and quickly returned to baseline levels when treatment was discontinued.