XBIO US Equity☆

ITEM 1A – RISK FACTORS

Our business is subject to numerous risks.

You should consider carefully the risks and uncertainties described below, in addition to other information contained in this Annual Report

as well as our other public filings with the Securities and Exchange Commission. Any of the following risks could have a material adverse

effect on our business, financial condition, results of operations and prospects and cause the trading price of our common stock to decline.

Risks Related to Our Financial Condition and

Capital Requirements

We have never been profitable and may never

achieve or sustain profitability. If we are unable to generate sufficient revenue from our operations to pay expenses or we are unable

to obtain additional financing on commercially reasonable terms, our business, financial condition and results of operations may be materially

and adversely affected.

We are a clinical-stage biopharmaceutical company

with a limited operating history. Pharmaceutical product and technology development is a highly speculative undertaking and involves a

substantial degree of risk. We have no products approved for commercial sale and have generated only limited revenue to date. Our primary

focus is now on advancing our DNase technology via partnering opportunities or through regulatory approval and commercialization.

We expect to continue to incur significant research and development and other expenses related to our ongoing operations. As a result,

we have never been profitable and we may not achieve profitability in the foreseeable future, if at all. Our ability to generate profits

in the future will depend on a number of factors, including:

· Market acceptance of our drug candidates and technologies;

· Costs of acquiring and developing new drug candidates and technologies;

· Ability to bring our drug candidates to market;

· General and administrative costs relating to our operations;

· Increases in our research and development costs;

· Charges related to purchases of technology or other assets;

· Establishing, maintaining and protecting our intellectual property rights;

· Attracting, hiring and retaining qualified personnel; and

· Our ability to raise additional capital.

As of December 31, 2024, we had an accumulated

deficit of approximately $197.2 million. We expect to incur additional significant operating losses as we expand our research and development

activities and our commercialization, marketing and sales efforts. We may also encounter unforeseen expenses, difficulties, complications,

delays and other unknown factors that may adversely affect our business. In addition, because of the numerous risks and uncertainties

associated with pharmaceutical product development, including that our current drug candidates may not achieve the clinical endpoints

of applicable trials, we are unable to predict the timing or amount of increased expenses and if or when we will achieve or maintain profitability.

If we are unable to generate sufficient revenue from our operations to pay expenses or we are unable to obtain additional financing on

commercially reasonable terms, our business, financial condition and results of operations may be materially and adversely affected.

We will require substantial additional funding

to achieve our goals. Failure to obtain this necessary capital when needed on acceptable terms, or at all, may force us to delay, limit

or terminate our product development efforts, other operations or commercialization efforts.

Developing drug candidates is an expensive, risky

and lengthy process, and we expect our expenses to increase in connection with our ongoing activities, particularly as we continue the

research and development of, initiate clinical trials of, and seek marketing approval for, our drug candidates.

As of December 31, 2024, we had cash of approximately

$6.2 million. We expect that we will require additional capital to commence and complete clinical trials, obtain regulatory approval for,

and to commercialize, our drug candidates, including our other preclinical drug candidates and our future drug candidates. However, our

operating plan may change as a result of many factors currently unknown to us, and we may need to seek additional funds sooner than planned.

Additional funding may come through public or private equity or debt financings, third-party funding, marketing and distribution arrangements

or other collaborations, strategic alliances and licensing arrangements (or a combination of these approaches). In any event, we will

require additional capital to pursue preclinical and clinical activities, pursue regulatory approval for, and to commercialize, our longer

term pipeline drug candidates. Even if we believe we have sufficient funds for our current or future operating plans, we may seek additional

capital if market conditions are favorable or if we have specific strategic considerations.

Our ability to raise additional funds will depend

on financial, economic, political, and market conditions and other factors over which we may have no or limited control. Market volatility

resulting from economic, political or other factors, such as geopolitical tension, including the conflicts in the Ukraine and the Middle

East, and any resulting sanctions, export controls or other restrictive actions, could also adversely impact our ability to access capital

as and when needed. Additional funds may not be available when we need them, on terms and at a cost that are acceptable to us, or at all.

Any additional fundraising efforts may divert

our management from their day-to-day activities, which may adversely affect our ability to develop and commercialize our drug candidates.

In addition, we cannot guarantee that future financing will be available in sufficient amounts or on terms acceptable to us, if at all.

Moreover, the terms of any financing may negatively impact the holdings or the rights of our stockholders, and the issuance of additional

securities (whether equity or debt) by us, or the possibility of such issuance, may cause the market price of our shares to decline. The

incurrence of indebtedness could result in increased fixed payment obligations, and we may be required to agree to certain restrictive

covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual

property rights and other operating restrictions that could adversely impact our ability to conduct our business.

If we are unable to obtain funding on a timely

basis, we may be required to significantly curtail, delay or discontinue our pre-clinical development program or the commercialization

of any drug candidates. We may also be unable to expand our operations or otherwise capitalize on our business opportunities, as desired,

which could harm our business, financial condition and results of operations.

Raising additional capital may cause dilution

to our stockholders, restrict our operations or require us to relinquish rights to our technologies or drug candidates.

Until such time, if ever, as we can generate substantial

product revenues, we expect to finance our cash needs through a combination of equity and debt financings, as well as selectively continuing

to enter into collaborations, strategic alliances and licensing arrangements. We do not currently have any committed external source of

funds. To the extent that we raise additional capital through the sale of equity or convertible debt securities, equity interests will

be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our stockholders.

Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions,

such as incurring additional debt, making capital expenditures or declaring dividends. Such debt financing may also be secured by all

or a portion of our assets.

If we raise funds by selectively continuing to

enter into collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish additional valuable

rights to our technologies, future revenue streams, research programs or drug candidates, or we may have to grant licenses on terms that

may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, we may be required

to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market

drug candidates that we would otherwise prefer to develop and market ourselves. If we are unable to raise additional funds through collaborations,

strategic alliances or licensing arrangements, we may be required to terminate product development or future commercialization efforts

or to cease operations altogether.

Risks Related to the Discovery and Development

of our Pharmaceutical Products

Our business is substantially dependent

on the success of the DNase technology.

Our business will substantially depend on the

successful clinical development, regulatory approval and commercialization of the DNase technology. It will require substantial

clinical development and regulatory approval efforts before we are permitted to commence its commercialization, if ever. We have, and

plan to continue to pursue our clinical development strategy through academic and strategic collaborations. If we have difficulty maintaining,

obtaining, or are unable to obtain these collaborations and additional academic collaborations as planned, we may need to delay, limit

or terminate any ongoing or planned clinical development, which would have an adverse effect on our business. The clinical trials and

manufacturing and marketing of DNase and any other product candidates will be subject to extensive and rigorous review and regulation

by numerous government authorities in the U.S., the European Union and other jurisdictions where we intend to test and, if approved, market

our product candidates. Before obtaining regulatory approvals for the commercial sale of any product candidate, we must demonstrate through

preclinical testing and clinical trials that the product candidate is safe and effective for use in each target indication and potentially

in specific patient populations. This process can take many years and may include post-marketing studies and surveillance, which would

require the expenditure of substantial resources beyond the proceeds we have currently raised. Of the large number of drugs in development

for approval in the U.S. and the European Union, only a small percentage successfully complete the FDA or European Medicines Agency regulatory-approval

processes, as applicable, and are commercialized. Accordingly, even if we are able to obtain the requisite financing or identify an academic

or strategic collaboration partner to continue to fund our research, development and clinical programs, we cannot assure you that DNase

or any of our other product candidates will be successfully developed or commercialized.

We are an early stage company in the business

of developing pharmaceutical products including drug candidates and technologies. Given the uncertainty of such development, our business

operations may never fully materialize and create value for investors.

We have invested substantially all of our efforts

and financial resources in developing our products, and we currently do not have any products that have gained marketing approval. Our

revenues currently consist primarily of royalty revenue from a single partner and not from product sales. Our ability to generate product

revenues, which may not occur for several more years, if ever, will depend on the successful development and eventual commercialization

of our drug candidates. We currently generate royalty revenue under a sub-license agreement but do not have revenue from sales of any

drugs, and we may never be able to develop or commercialize a marketable drug. Each of our drug candidates will require development, management

of development and manufacturing activities, marketing approval in multiple jurisdictions, obtaining manufacturing supply, building of

a commercial organization, substantial investment and significant marketing efforts before we generate any revenues from drug sales. We

have not yet demonstrated an ability to successfully overcome many of the risks and uncertainties frequently encountered by companies

in new and rapidly-evolving fields, particularly in the pharmaceutical area. For example, to execute our business plan we will need to

successfully:

· Protect, leverage and expand our intellectual property portfolio;

· Effectively compete with other therapies;

· Obtain and maintain healthcare coverages and adequate reimbursement;

· Enforce and defend intellectual property rights and claims; and

We may find it difficult to enroll patients

in our clinical studies, which could delay or prevent clinical studies of our pharmaceutical products.

Identifying and qualifying patients to participate

in clinical studies of our pharmaceutical products is critical to our success. The timing of our clinical studies depends on the speed

at which we can recruit patients to participate in testing our pharmaceutical products. We may experience delays. If patients are unwilling

to participate in our clinical studies because of negative publicity from adverse events in the biopharmaceutical industries or for other

reasons, including competitive clinical studies for similar patient populations, the timeline for recruiting patients, conducting studies

and obtaining regulatory approval of potential products may be delayed. These delays could result in increased costs, delays in advancing

our product development, delays in testing the effectiveness of our technology or termination of the clinical studies altogether.

We may not be able to identify, recruit and enroll

a sufficient number of patients, or those with required or desired characteristics to achieve diversity in a study, to complete our clinical

studies in a timely manner. Patient enrollment is affected by many factors, including:

· Severity of the disease under investigation;

· Real or perceived availability of alternative treatments;

· Size and nature of the patient population;

· Eligibility criteria for and design of the trial in question;

· Perceived risks and benefits of the drug candidate under study;

· Proximity and availability of clinical sites for prospective patients;

· Ongoing clinical trials of potentially competitive agents;

· Patient referral practices of physicians; and

We may not be able to initiate or continue clinical

studies if we cannot enroll a sufficient number of eligible patients to participate in the clinical studies required by the FDA or other

regulatory agencies. Our ability to successfully initiate, enroll and complete a clinical study in any foreign country is subject to numerous

risks unique to conducting business in foreign countries, including:

· Difficulty in establishing or managing relationships with CROs and physicians;

· Different standards for the conduct of clinical studies;

If we have difficulty enrolling a sufficient number

of patients to conduct our clinical studies as planned, we may need to delay, limit or terminate ongoing or planned clinical studies,

any of which would have an adverse effect on our business.

We may encounter substantial delays in commencement,

enrollment or completion of our clinical trials, or we may fail to demonstrate safety and efficacy to the satisfaction of applicable regulatory

authorities, which could prevent us from commercializing our current and future drug candidates on a timely basis, if at all.

Before obtaining marketing approval from regulatory

authorities for the sale of our current and future drug candidates, we must conduct extensive clinical trials to demonstrate the safety

and efficacy of the drug candidates. We cannot guarantee that any clinical studies will be conducted as planned or completed on schedule,

if at all. A failure of one or more clinical studies can occur at any stage of testing. Events that may prevent successful or timely completion

of clinical development include:

· Delays in reaching a consensus with regulatory agencies on study design;

· Delays in recruiting suitable patients to participate in our clinical studies;

· Clinical study sites or patients dropping out of a study;

Any inability to successfully complete preclinical

studies and clinical trials could result in additional costs to us or impair our ability to generate revenues from product sales, regulatory

and commercialization milestones and royalties. In addition, if we make manufacturing or formulation changes to our drug candidates, we

may need to conduct additional studies to bridge our modified drug candidates to earlier versions. Clinical trial delays also could shorten

any periods during which we may have the exclusive right to commercialize our drug candidates or allow our competitors to bring products

to market before we do, which could impair our ability to successfully commercialize our drug candidates and may harm our business, financial

condition, results of operations and prospects.

If the results of our clinical studies are inconclusive

or if there are safety concerns or adverse events associated with our pharmaceutical products, we may:

· Be subject to changes with the way the product is administered;

· Be sued; or

· Experience damage to our reputation.

As described above, any of these events could

prevent us from achieving or maintaining market acceptance and approval of our pharmaceutical products and impair our ability to generate

revenues.

If we complete the necessary preclinical

and clinical studies, we cannot predict when or if we will obtain regulatory approval to commercialize a drug candidate, or the approval

may be for a more narrow indication than we expect.

A drug candidate cannot be commercialized until

the appropriate regulatory authorities have reviewed and approved the drug candidate. Even if our drug candidates demonstrate safety and

efficacy in clinical studies, the regulatory agencies may not complete their review processes in a timely manner, or we may not be able

to obtain regulatory approval. Additional delays may result if an FDA Advisory Committee or other regulatory advisory group or authority

recommends non-approval or restrictions on approval. In addition, we may experience delays or rejections based upon additional government

regulation from future legislation or administrative action or changes in regulatory agency policy during the period of product development,

clinical studies and the review process. Regulatory agencies also may approve a drug candidate for fewer or more limited indications than

requested or may grant approval subject to the performance of post-marketing studies. In addition, regulatory agencies may not approve

the labeling claims that are necessary or desirable for the successful commercialization of our drug candidates. Failure to obtain, or

a delay in obtaining, regulatory approval to commercialize a drug candidate will impair our ability to generate revenues and harm our

business prospects.

If we obtain regulatory approval for a drug

candidate, our drug candidate will remain subject to regulatory scrutiny.

If our drug candidates are approved, they will

be subject to ongoing regulatory requirements for manufacturing, labeling, packaging, storage, advertising, promotion, sampling, record-keeping,

reporting, conduct of post-marketing studies and submission of safety, efficacy and other post-market information, including both federal

and state requirements in the United States and requirements of comparable foreign regulatory authorities.

Manufacturers and manufacturing facilities are

required to comply with extensive FDA and comparable foreign regulatory authority requirements, including ensuring that quality control

and manufacturing procedures conform to cGMP regulations. As such, we will be subject to continual review and inspections to assess compliance

with cGMP and adherence to commitments made in any NDA, BLA or marketing authorization application (“MAA”). Accordingly, we

and our collaborators and suppliers must continue to expend time, money and effort in all areas of regulatory compliance, including manufacturing,

production and quality control.

Any regulatory approvals that we or our collaboration

partners receive for our drug candidates may be subject to limitations on the approved indicated uses for which the product may be marketed

or to the conditions of approval or may contain requirements for potentially costly additional clinical trials and surveillance to monitor

the safety and efficacy of the drug candidate. We will be required to report certain adverse reactions, serious adverse events and production

problems, if any, to the FDA and comparable foreign regulatory authorities. Any new legislation addressing drug safety or other issues

related to regulatory review and approval could result in delays in product development or commercialization or increased costs to assure

compliance. We will have to comply with requirements concerning advertising and promotion for our products. Promotional communications

with respect to prescription drugs are subject to a variety of legal and regulatory restrictions and must be consistent with the information

in the product’s approved label. As such, we are not allowed to promote our products for indications or uses for which they do not

have approval. If our drug candidates are approved, we must submit new or supplemental applications and obtain approval for certain changes

to the approved products, product labeling or manufacturing process. We could also be asked to conduct post-marketing clinical trials

to verify the safety and efficacy of our products in general or in specific patient subsets. An unsuccessful post-marketing study or failure

to complete such a study could result in the withdrawal of marketing approval.

If a regulatory agency discovers previously unknown

problems with an approved product, such as adverse events of unanticipated severity or frequency or problems with our manufacturing facilities,

or if a regulatory agency disagrees with the promotion, marketing or labeling of a product, such regulatory agency may impose restrictions

on that product or us, including requiring withdrawal of the product from the market. If we fail to comply with applicable regulatory

requirements, a regulatory agency or enforcement authority may, among other things:

· Issue inspectional findings;

· Issue untitled and warning letters;

· Impose civil or criminal penalties;

· Suspend or withdraw regulatory approval or revoke a license;

· Suspend or hold any of our ongoing clinical trials;

· Require additional clinical trials;

· Seize or detain products or require a product recall.

Any government investigation of alleged violations

of law could require us to expend significant time and resources in response and could generate negative publicity. Any failure to comply

with ongoing regulatory requirements may significantly and adversely affect our ability to commercialize and generate revenue from our

products. If regulatory sanctions are applied or if regulatory approval is withdrawn, the value of the Company and our operating results

will be negatively impacted.

The commercial success of any current or

future pharmaceutical products will depend upon the degree of market acceptance by physicians, patients, third-party payors and others

in the medical community.

Even with the requisite approvals, the commercial

success of our pharmaceutical products will depend in part on the medical community, patients and third-party payors accepting our pharmaceutical

products as medically useful, cost-effective and safe. Any pharmaceutical product that we, or our partners, bring to the market may not

gain market acceptance by physicians, patients, third-party payors or others in the medical community. The degree of market acceptance

of these pharmaceutical products, if approved for commercial sale, will depend on a number of factors, including:

· Our ability to provide acceptable evidence of safety and efficacy;

· Relative convenience and ease of administration;

· The prevalence and severity of any adverse side effects;

· Restrictions on use in combination with other products;

· Availability of alternative treatments;

· Effectiveness of our or our partners’ sales and marketing strategy;

· Our ability to obtain sufficient third-party coverage or reimbursement; and

· Potential product liability claims.

Even if a potential product displays a favorable

efficacy and safety profile in preclinical and clinical studies, market acceptance of the product will not be known until after it is

launched. Our efforts to educate the medical community and third-party payors on the benefits of the pharmaceutical products may require

a significant amount of resources and may never be successful. If these products do not achieve an adequate level of acceptance, we may

not generate significant product revenue and may not become profitable.

The commercial potential of a pharmaceutical

candidate in development is difficult to predict. If the market size for a new drug candidate or technology is significantly smaller than

we anticipate, it could significantly and negatively impact our revenue, results of operations and financial condition.

It is very difficult to estimate the commercial

potential of pharmaceutical products due to important factors, such as safety and efficacy compared to other available technologies or

treatments, including changing standards of care, third-party payor reimbursement standards, patient and physician preferences, the availability

of competitive alternatives that may emerge either during the long drug development process or after commercial introduction and the availability

of generic versions of our successful drug candidates following approval by government health authorities, based on the expiration of

regulatory exclusivity or our inability to prevent generic versions from coming to market by asserting our patents. If due to these factors,

or others, the market potential for a pharmaceutical product is lower than we anticipated, it could significantly and negatively impact

the commercial terms of any collaboration partnership potential for such pharmaceutical product or, if we have already entered into a

collaboration for such pharmaceutical product, the revenue potential from royalty and milestone payments could be significantly diminished,

which would negatively impact our business, financial condition and results of operations.

Failure to obtain or maintain adequate coverage

and reimbursement for our drug candidates, if approved, could limit our ability to market those products and decrease our ability to generate

revenue.

The success of our drug candidates, if approved,

depends on the availability of adequate coverage and reimbursement from third-party payors. In addition, because our drug candidates represent

new approaches to the treatment of certain diseases, we cannot be sure that coverage and reimbursement will be available for, or accurately

estimate the potential revenue from, our drug candidates or assure that coverage and reimbursement will be available for any product that

we may develop.

Patients who are provided medical treatment for

their conditions generally rely on third-party payors to reimburse all or part of the costs associated with their treatment. Adequate

coverage and reimbursement from federal health care programs, such as Medicare and Medicaid, and commercial payors are critical to new

product acceptance.

Government authorities and third-party payors,

such as private health insurers and health maintenance organizations, as well as their pharmacy benefit managers decide which drugs and

treatments they will cover and the amount of reimbursement. Coverage and reimbursement by a third-party payor may depend upon a number

of factors, including the third-party payor’s determination that use of a product is:

· A covered benefit under its health plan;

· Safe, effective and medically necessary;

· Appropriate for the specific patient;

· Cost-effective; and

· Neither experimental nor investigational.

In the United States, no uniform policy of coverage

and reimbursement for products exists among third-party payors and their contracted pharmacy benefit managers that manage prescription

benefits for such payors. As a result, obtaining coverage and reimbursement approval of a product from a government or other third-party

payor is a time-consuming and costly process that could require us to provide to each payor supporting scientific, clinical and cost-effectiveness

data for the use of our products on a payor-by-payor basis, with no assurance that coverage and adequate reimbursement will be obtained.

Even if we obtain coverage for a given product, the resulting reimbursement payment rates might not be adequate for us to achieve or sustain

profitability or may require co-payments that patients find unacceptably high. Additionally, third-party payors and their pharmacy benefit

managers may not cover, or provide adequate reimbursement for, long-term follow-up evaluations that may be required for our products.

Patients are unlikely to use our drug candidates unless coverage is provided and reimbursement is adequate to cover a significant portion

of the cost of our drug candidates and/or if patient out-of-pocket costs (such as co-pays or co-insurance) are prohibitively high. There

is significant uncertainty related to insurance coverage and reimbursement of newly-approved products. It is difficult to predict at this

time what third-party payors will decide with respect to the coverage and reimbursement for our drug candidates.

Moreover, increasing efforts by governmental and

third-party payors in the United States and abroad to cap or reduce healthcare costs may cause such organizations to limit both coverage

and the level of reimbursement for newly-approved products and, as a result, they may not cover or provide adequate payment for our drug

candidates. We expect to experience pricing pressures in connection with the sale of any of our drug candidates due to the trend toward

managed healthcare, value-based pricing, the increasing influence of health maintenance organizations, cost containment initiatives and

additional legislative changes.

We intend to seek approval to market our drug

candidates in both the United States and in select foreign jurisdictions. If we obtain approval in one or more foreign jurisdictions for

our drug candidates, we will be subject to rules and regulations in those jurisdictions. In some foreign countries, the pricing of pharmaceutical

products is subject to governmental control and other market regulations which could put pressure on the pricing and usage of our drug

candidates. In these countries, pricing negotiations with governmental authorities can take considerable time after obtaining marketing

approval of a drug candidate. In addition, market acceptance and sales of our drug candidates will depend significantly on the availability

of adequate coverage and reimbursement from third-party payors for our drug candidates and may be affected by existing and future health

care reform measures. Failure to obtain or maintain adequate coverage and reimbursement for our drug candidates, if approved, could limit

our ability to market those products and decrease our ability to generate revenue.

We may use our financial and human resources

to pursue a particular research program or drug candidate and fail to capitalize on programs or drug candidates that may be more profitable

or for which there is a greater likelihood of success.

Because we have limited resources, we may forego

or delay pursuit of opportunities with certain programs, drug candidates or for indications that later prove to have greater commercial

potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities.

Our spending on current and future research and development programs for drug candidates may not yield any commercially viable products.

If we do not accurately evaluate the commercial potential or target market for a particular drug candidate, we may relinquish valuable

rights to that drug candidate through strategic collaboration, licensing or other royalty arrangements in cases in which it would have

been more advantageous for us to retain sole development and commercialization rights to such drug candidate, or we may allocate internal

resources to a drug candidate in a therapeutic area in which it would have been more advantageous to enter into a partnering arrangement.

Failure to pursue opportunities with greater commercial potential or relinquishing valuable rights to drug candidates may adversely impact

our business, results of operations and prospects.

We may not be successful in our efforts

to identify or discover additional pharmaceutical products.

The success of our business depends primarily

upon our ability to identify and develop pharmaceutical products. Our research programs may fail to identify potential pharmaceutical

products for clinical development for a number of reasons. Our research methodology may be unsuccessful in identifying potential pharmaceutical

products, or our potential pharmaceutical products may be shown to have harmful side effects or may have other characteristics that may

make the products unmarketable or unlikely to receive marketing approval.

If any of these events occur, we may be forced

to abandon our development efforts for a program or programs, which would have a material adverse effect on our business and could potentially

cause us to cease operations. Research programs to identify new pharmaceutical products require substantial technical, financial and human

resources. We may focus our efforts and resources on potential programs or pharmaceutical products that ultimately prove to be unsuccessful.

If we are not successful in our efforts to identify or discover additional pharmaceutical products, it could adversely affect our business,

results of operations and prospects.

The market opportunities for our drug candidates

may be limited to those patients who are ineligible for or have failed prior treatments and may be small.

Cancer therapies are sometimes characterized as

first line, second line or third line, and the FDA often approves new therapies initially only for third line use. When cancer is detected

early enough, first line therapy is sometimes adequate to cure the cancer or prolong life without a cure. Whenever first line therapy,

which usually consists of chemotherapy, hormone therapy, surgery or a combination of these, proves unsuccessful, second line therapy may

be administered. Second line therapies often consist of more chemotherapy, radiation, antibody drugs, tumor targeted small molecules or

a combination of these. Third line therapies can include bone marrow transplantation, antibody and small molecule targeted therapies,

more invasive forms of surgery and new technologies. In markets with approved therapies, we expect to initially seek approval of our drug

candidates as a later stage therapy for patients who have failed other approved treatments. Subsequently, for those drugs that prove to

be sufficiently beneficial, if any, we would expect to seek approval as a second line therapy and potentially as a first line therapy,

but there is no guarantee that our drug candidates, even if approved, would be approved for second line or first line therapy. In addition,

we may have to conduct additional clinical trials prior to gaining approval for second line or first line therapy.

Our projections of both the number of people who

have the cancers we are targeting, as well as the subset of people with these cancers in a position to receive later stage therapy and

who have the potential to benefit from treatment with our drug candidates, are based on our beliefs and estimates. These estimates have

been derived from a variety of sources, including scientific literature, surveys of clinics, patient foundations or market research and

may prove to be incorrect. Further, new studies may change the estimated incidence or prevalence of these cancers. The number of patients

may turn out to be lower than expected. In addition, the potentially addressable patient population for our drug candidates may be limited

or may not be amenable to treatment with our drug candidates. Even if we obtain significant market share for our drug candidates, we may

never achieve profitability without obtaining regulatory approval for additional indications, including use as a first or second line

therapy, which may adversely affect our business and results of operations.

Clinical trials may fail to demonstrate

the safety and efficacy of our pharmaceutical drug candidates and could prevent or significantly delay regulatory approval.

Before receiving NDA or BLA approval to commercialize

a drug candidate, we must demonstrate to the FDA, with substantial evidence from well-controlled clinical trials, that the drug candidate

is both safe and effective or the biologic is safe, pure and potent. If these trials or future clinical trials are unsuccessful, our business

and reputation could be harmed and our stock price could be adversely affected.

Clinical failure can occur at any stage of clinical

development. Clinical trials may produce negative or inconclusive results, and we or any of our current and future collaborators may decide,

or regulators may require us, to conduct additional clinical or preclinical testing. We will be required to demonstrate with substantial

evidence through well-controlled clinical trials that our drug candidates are as safe and effective for use in a specific patient population

as the respective reference products before we can seek regulatory approvals for their commercial sale. Success in early clinical trials

does not mean that future larger registration clinical trials will be successful because drug candidates in later-stage clinical trials

may fail to demonstrate equivalent safety and efficacy to the satisfaction of the FDA and foreign regulatory agencies despite having progressed

through initial clinical trials. Drug candidates that have shown promising results in early clinical trials may still fail in subsequent

confirmatory clinical trials. Similarly, the outcome of preclinical testing and early clinical trials may not be predictive of the success

of later clinical trials, and interim results of a clinical trial do not necessarily predict final results. A number of companies in the

pharmaceutical industry, including those with greater resources and experience than us, have suffered significant setbacks in advanced

clinical trials, even after obtaining promising results in earlier clinical trials.

In addition, the design of a clinical trial can

determine whether its results will support approval of a product, and flaws in the design of a clinical trial may not become apparent

until the clinical trial is well advanced. We may be unable to design and execute a clinical trial to support regulatory approval. In

some instances, there can be significant variability in safety or efficacy results between different trials of the same drug candidate

due to numerous factors, including but not limited to, changes in trial protocols, differences in size and type of the patient populations,

adherence to the dosing regimen and the rate of dropout among clinical trial participants.

Because of these risks, our research and development

efforts, and those of our collaborative partners, may not result in any commercially viable products. If a significant portion of these

development efforts is not successfully completed, or if required regulatory approvals are not obtained by us or our partners, or any

approved products are not commercially successful, we may not generate significant revenues or become profitable.

We may fail to obtain orphan drug designations

from the FDA for our drug candidates, and even if we obtain such designations, we may be unable to maintain the benefits associated with

orphan drug designation, including the potential for market exclusivity.

Under the Orphan Drug Act, the FDA may grant orphan

drug designation to a drug or biologic intended to treat a rare disease or condition, which is defined as one occurring in a patient population

of fewer than 200,000 in the United States, or a patient population greater than 200,000 in the United States where there is no reasonable

expectation that the cost of developing the drug or biologic will be recovered from sales in the United States. In the United States,

orphan drug designation entitles a party to financial incentives such as opportunities for grant funding towards clinical trial costs,

tax advantages and user-fee waivers. In addition, if a product that has orphan drug designation subsequently receives the first FDA approval

for the disease for which it has such designation, the product is entitled to orphan drug exclusivity, which means that the FDA may not

approve any other applications, including a full NDA or BLA, to market the same drug or biologic for the same indication for seven years,

except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity or where the manufacturer

is unable to assure sufficient product quantity.

We may seek to obtain orphan drug designation

for our active drug candidates for any qualifying indications they may be approved for in the future. Even if we obtain such designations,

we may not be the first to obtain marketing approval of our drug candidate for the orphan-designated indication due to the uncertainties

associated with developing pharmaceutical products. In addition, exclusive marketing rights in the United States may be limited if we

seek approval for an indication broader than the orphan-designated indication, or may be lost if the FDA later determines that the request

for designation was materially defective or if the manufacturer is unable to assure sufficient quantities of the product to meet the needs

of patients with the rare disease or condition. Further, even if we obtain orphan drug exclusivity for a product, that exclusivity may

not effectively protect the product from competition because different drugs with different active moieties can be approved for the same

condition. Even after an orphan product is approved, the FDA can subsequently approve the same drug with the same active moiety for the

same condition if the FDA concludes that the later drug is safer, more effective or makes a major contribution to patient care. Orphan

drug designation neither shortens the development time or regulatory review time of a drug, nor gives the drug any advantage in the regulatory

review or approval process. In addition, even if we seek orphan drug designation for our drug candidates, we may never receive such designations.

Healthcare legislative reform measures may

have a material adverse effect on our business and results of operations.

In both the United States and certain foreign

jurisdictions, there have been a number of legislative and regulatory enactments in recent years that change the healthcare system in

ways that could impact our future ability to sell our drug candidates profitably.

Furthermore, there have been and continue to be

a number of initiatives at the federal and state level that seek to reduce healthcare costs. Most significantly, in March 2010, the Patient

Protection and Affordable Health Care Act, as amended by the Health Care and Education Reconciliation Act (collectively, the “ACA”),

was signed into law, which includes measures that significantly change the way healthcare is financed by both governmental and private

insurers. In January 2017, Congress voted to adopt a budget resolution for fiscal year 2017, or the Budget Resolution, that authorizes

the implementation of legislation that would repeal portions of the ACA. In addition, on January 20, 2017, President Trump signed an executive

order directing federal agencies with authorities and responsibilities under the ACA to waive, defer, grant exemptions from, or delay

the implementation of any provision of the ACA that would impose a fiscal or regulatory burden on states, individuals, healthcare providers,

health insurers, or manufacturers of pharmaceuticals or medical devices. Further, on October 12, 2017, President Trump issued another

executive order requiring the Secretaries of HHA and the Departments of Labor and Treasury to consider proposing regulations or revising

existing guidance to allow more employers to form association health plans that would be allowed to provide coverage across state lines,

increase the availability of short-term, limited-duration health insurance plans, which are generally not subject to the requirements

of the ACA, and increase the availability and permitted use of health reimbursement arrangements. On October 13, 2017, the Department

of Justice announced that HHS was immediately stopping its cost sharing reduction payments to insurance companies based on the determination

that those payments had not been appropriated by Congress. Furthermore, on December 22, 2017, President Trump signed the Tax Cuts and

Jobs Act (the “TCJA”) into law that, in addition to overhauling the federal tax system, also, effective as of January 1, 2019,

repealed the penalties associated with the individual mandate. Congress or the President of the United States also could consider subsequent

legislation or executive action to replace, eliminate or reaffirm elements of the ACA. We will continue to evaluate the effect that the

ACA and any future measures to modify, repeal, replace or reaffirm the ACA have on our business.

Additionally, the Inflation Reduction Act of 2022

may impact existing Medicare programs that cover prescription drugs. In addition to other relevant provisions, the Inflation Reduction

Act of 2022 allows the Medicare program to directly negotiate the price of certain high-expenditure prescription drugs covered under Medicare

Parts B and D, starting in the year 2028 and 2026, respectively, by setting certain "maximum fair prices." Moreover, the Inflation

Reduction Act of 2022 requires manufacturers to pay rebates to the federal government if prices of certain drugs covered under the Medicare

program rise faster than the rate of inflation. We will continue to evaluate the effects that the Inflation Reduction Act of 2022 will

have on our business.

In a 2024 U.S. Supreme Court ruling (Loper

Bright Enterprises v. Raimondo) (the “Loper decision”), the Supreme Court overturned the long-standing Chevron

doctrine, which had accorded deference to an agency’s interpretation of ambiguous laws since 1984. Following the Loper decision,

the healthcare space may face increased judicial scrutiny of agency regulations, as courts are no longer required to defer to federal

agencies’ interpretations of ambiguous statutes. This change could lead to significant alterations in how healthcare laws and regulations

are applied and enforced. While the full impact of this reversal has yet to be examined, the Loper decision could lead to material

changes to the healthcare system, particularly concerning the FDA, CMS, HHS, and other agencies. We will continue to evaluate the effects

that the Loper decision will have on our business.

We are not able to provide any assurance that

the continued healthcare reform debate will not result in legislation, regulation, litigation or executive action by the President of

the United States that is adverse to our business. Moreover, we are not, at this time, able to evaluate any potential legislative, regulatory

or Executive Order actions that the new presidential administration may take which could have a material impact on our business.

Laws and other reform and cost containment measures

that may be proposed and adopted in the future remain uncertain but may contain provisions that restrict our ability to price our products

and/or could result in additional reductions in Medicare and other healthcare funding, which could have a material adverse effect on our

future customers and, accordingly, our ability to generate revenue, attain profitability or commercialize our products.

Risks Related to Our Reliance on Third-Parties

If conflicts arise between us and our collaborators

or strategic partners, these parties may act in their self-interest, which may limit our ability to implement our strategies.

If conflicts arise between our corporate or academic

collaborators or strategic partners and us, the other party may act in its self-interest, which may limit our ability to implement our

strategies. Some of our academic collaborators and strategic partners are conducting multiple product development efforts within each

area that is the subject of the collaboration with us. Our collaborators or strategic partners, however, may develop, either alone or

with others, products in related fields that are competitive with the products or potential products that are the subject of these collaborations.

Competing products, either developed by the collaborators or strategic partners or to which the collaborators or strategic partners have

rights, may result in the withdrawal of partner support for our drug candidates.

Some of our collaborators or strategic partners

could also become our competitors in the future. Our collaborators or strategic partners could develop competing products, preclude us

from entering into collaborations with their competitors, fail to obtain timely regulatory approvals, terminate their agreements with

us prematurely, or fail to devote sufficient resources to the development and commercialization of products. Any of these developments

could harm our product development efforts, which may adversely affect our business, results of operations and prospects.

We expect to rely on third parties to conduct,

supervise and monitor our clinical studies, and if these third parties perform in an unsatisfactory manner, it may harm our business.

We rely on CROs, clinical investigators

and clinical study sites to ensure our clinical studies are conducted properly and on time. We will have limited influence over the performance

by CROs, clinical investigators and clinical study sites, and we will control only certain aspects of our CROs’ activities. Nevertheless,

we will be responsible for ensuring that each of our clinical studies is conducted in accordance with the applicable protocol, legal and

regulatory requirements and scientific standards, and our reliance on the CROs does not relieve us of our regulatory responsibilities.

Furthermore, facilities used by these third party CROs, clinical investigators and clinical study sites may be negatively affected by

catastrophic events, such as pandemics, terrorist attacks, wars or other armed conflicts, geopolitical tensions, such as the ongoing conflicts

in the Ukraine and Middle East, and related sanctions and other economic disruptions or concerns, natural disasters, such as floods or

fire, or such facilities could face manufacturing issues, such as contamination or regulatory concerns following a regulatory inspection

of such facility. In such instances, we may need to locate an appropriate replacement third-party facility and establish a contractual

relationship, which may not be readily available or on acceptable terms, which would cause additional delay and increased expense, including

as a result of additional required FDA approvals, and may have a material adverse effect on our business.

We, our clinical investigators, and our CROs are

required to comply with the FDA’s GCPs for conducting, recording and reporting the results of clinical trials to assure that the

data and reported results are credible and accurate and that the rights, integrity and confidentiality of clinical trial participants

are protected. The FDA enforces these GCPs through periodic inspections of study sponsors, principal investigators and clinical trial

sites. If we, our CROs or the clinical investigators fail to comply with applicable GCPs, the clinical data generated in our clinical

trials may be deemed unreliable, and the FDA may require us to perform additional clinical trials before approving any marketing applications.

Upon inspection, the FDA may determine that our clinical trials did not comply with GCPs. In addition, our future clinical trials will

require a sufficient number of test subjects to evaluate the safety and efficacy of our drug candidates. Accordingly, if our CROs or clinical

investigators fail to comply with these regulations or fail to recruit a sufficient number of patients, we may be required to repeat such

clinical trials, which would delay the regulatory approval process.

Our CROs are not our employees, and we are therefore

unable to directly monitor whether or not they devote sufficient time and resources to our clinical and nonclinical programs, which must

be conducted in accordance with GCPs and GLPs, respectively. These CROs may also have relationships with other commercial entities, including

our competitors, for whom they may also be conducting clinical studies or other drug development activities that could harm our competitive

position. If our CROs do not successfully carry out their contractual duties or obligations, fail to meet expected deadlines or the quality

or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements

(or for any other reasons), our clinical studies may be extended, delayed or terminated, and we may not be able to obtain regulatory approval

for, or successfully commercialize, our pharmaceutical products. As a result, our financial results and the commercial prospects for our

pharmaceutical products would be harmed, our costs could increase and our ability to generate revenues could be delayed.

We may also rely on other third parties to store

and distribute our products for any clinical studies that we may conduct. Any performance failure on the part of our distributors could

delay clinical development or marketing approval of our pharmaceutical products or commercialization of our products, if approved, producing

additional losses and depriving us of potential product revenue.

Our collaborators or strategic partners

may decide to adopt alternative technologies or may be unable to develop commercially viable products with our technology, which would

negatively impact our revenues and our strategy to develop these products.

Our collaborators or strategic partners may adopt

alternative technologies, which could decrease the marketability of our products. Additionally, because our current or future collaborators

or strategic partners are likely to be working on more than one development project, they could choose to shift their resources to projects

other than those they are working on with us. If they do so, this would delay our ability to test our technology and would delay or terminate

the development of potential products based on our platforms. Further, our collaborators and strategic partners may elect not to develop

products arising out of our collaborative and strategic partnering arrangements or to devote sufficient resources to the development,

manufacturing, marketing or sale of these products. The failure to develop and commercialize a drug candidate pursuant to our agreements

with our current or future collaborator would prevent us from receiving future milestone and royalty payments, which would negatively

impact our revenues.

We may seek to establish additional collaborations

and, if we are not able to establish them on commercially reasonable terms, we may have to alter our development and commercialization

plans.

Our drug candidate development programs and the

potential commercialization of our drug candidates will require substantial additional cash to fund expenses. For some of our drug candidates,

we may decide to collaborate with additional pharmaceutical and biotechnology companies for the development and potential commercialization

of those drug candidates.

We face significant competition in seeking appropriate

collaborators. Whether we reach a definitive agreement for any additional collaborations will depend, among other things, upon our assessment

of the collaborator’s resources and expertise, the terms and conditions of the proposed collaboration and the proposed collaborator’s

evaluation of a number of factors. Those factors may include the design or results of clinical trials, the likelihood of approval by FDA

or similar regulatory authorities outside the U.S., the potential market for the subject drug candidate, the costs and complexities of

manufacturing and delivering such drug candidate to patients, the potential of competing drugs, the existence of uncertainty with respect

to our ownership of technology (which can exist if there is a challenge to such ownership without regard to the merits of the challenge)

and industry and market conditions generally. The collaborator may also consider alternative drug candidates or technologies for similar

indications that may be available to collaborate on and whether such a collaboration could be more attractive than the one with us for

our drug candidate. The terms of any additional collaborations or other arrangements that we may establish may not be favorable to us.

We may also be restricted under existing collaboration

agreements from entering into future agreements on certain terms with potential collaborators. Collaborations are complex and time-consuming

to negotiate and document. In addition, there have been a significant number of recent business combinations among large pharmaceutical

companies that have resulted in a reduced number of potential future collaborators.

We may not be able to negotiate additional collaborations

on a timely basis on acceptable terms, or at all. If we are unable to do so, we may have to curtail the development of the drug candidate

for which we are seeking to collaborate, reduce or delay its development program or one or more of our other development programs, delay

its potential commercialization or reduce the scope of any sales or marketing activities or increase our expenditures and undertake development

or commercialization activities at our own expense. If we elect to increase our expenditures to fund development or commercialization

activities on our own, we may need to obtain additional capital, which may not be available to us on acceptable terms, or at all. If we

do not have sufficient funds, we may not be able to further develop our drug candidates or bring them to market and generate product revenue.

We are a party to, and may enter into one

or more collaborations in the future, pursuant to which we may be required to relinquish important rights to and control over the development

of our drug candidates or otherwise be subject to unfavorable terms.

Any current and future collaborations we enter

into could subject us to a number of risks, including:

· Collaborators may experience financial difficulties;

We have no manufacturing, sales, marketing

or distribution capabilities, and we may have to invest a significant amount of resources to develop these capabilities.

We have no internal manufacturing capabilities.

As a result, for manufacturing we depend on third-party manufacturers. Our strategy is based on leveraging the ability of collaboration

partners to develop and manufacture our products for commercialization in the pharmaceutical marketplace, and we will be dependent on

collaborations with drug development and manufacturing capabilities. If we are not able to maintain existing collaborative arrangements

or establish new arrangements on commercially acceptable terms, we would be required to undertake product manufacturing and development

activities at our own expense. This would increase our capital requirements or require us to limit the scope of our development activities.

Moreover, we have limited or no experience in conducting full-scale bioequivalence or other clinical studies, preparing and submitting

regulatory applications and distributing and marketing pharmaceutical products. As such, we are reliant on contract parties for such efforts.

We may not be able to enter into collaborations or hire consultants or external service providers to assist us in sales, marketing and

distribution functions on acceptable financial terms, or at all.

If any of our developmental collaborators breach

or terminate their agreements with us or otherwise fail to conduct their collaborative activities in a timely manner, the preclinical

and/or clinical development and/or commercialization of our pharmaceutical products will be delayed and we would be required to devote

additional resources to product development and commercialization or terminate certain development programs. Also, a license relationship

may be terminated at the discretion of our collaborator, or at the end of contract terms, and in some cases with only limited notice to

us. The termination of the collaborative arrangement could have a material adverse effect on our business, financial condition and results

of operations. There also can be no assurance that disputes will not arise with respect to the ownership of rights to any technology developed

with third parties. These and other possible disagreements with collaborators could lead to delays in the development or commercialization

of our pharmaceutical products or could result in litigation or arbitration, which could be time-consuming and expensive and could have

a material adverse effect on our business, financial condition and results of operations. Even if we decide to perform clinical trials,

sales, marketing and distribution functions ourselves, we could face a number of additional related risks, including:

· Our direct sales and marketing efforts may not be successful.

Any failure to perform such activities could have

a material adverse effect on our business, financial condition and results of our operations.

Our reliance on third parties requires us

to share our trade secrets, which increases the possibility that a competitor will discover them or that our trade secrets will be misappropriated

or disclosed.

Because we rely on third parties to manufacture

our pharmaceutical products, and because we collaborate with various organizations and academic institutions on the development of our

pharmaceutical products, we must, at times, share trade secrets with them. We seek to protect our proprietary technology in part by entering

into confidentiality agreements and, if applicable, material transfer agreements, collaborative research agreements, consulting agreements

or other similar agreements with our collaborators, advisors, employees and consultants prior to beginning research or disclosing proprietary

information. These agreements typically limit the rights of the third parties to use or disclose our confidential information, such as

trade secrets. The need to share trade secrets and other confidential information when working with third parties increases the risk that

such trade secrets become known by our competitors, are inadvertently incorporated into the technology of others or are disclosed or used

in violation of these agreements. Given that our proprietary position is based, in part, on our know-how and trade secrets, a competitor’s