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Connect Biopharma Holdings Ltd

Connect Biopharma Holdings LtdCNTBEarnings & Financial Report

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Connect Biopharma Holdings Ltd is a clinical-stage global biopharmaceutical company dedicated to developing innovative targeted therapies for inflammatory, immunological and autoimmune diseases. Its core pipeline includes candidate treatments for asthma, atopic dermatitis and other conditions with high unmet medical needs, with main operations across the U.S., China and key global markets to deliver effective therapeutic solutions to patients.

What changed in Connect Biopharma Holdings Ltd's 10-K — 2024 vs 2025

Top changes in Connect Biopharma Holdings Ltd's 2025 10-K

507 paragraphs added · 497 removed · 397 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

66 edited+29 added−9 removed243 unchanged
Other potential consequences include, among other things: • restrictions on the marketing or manufacturing of a product, complete withdrawal of the product from the market or product recalls; • fines, warning letters or holds on post-approval clinical studies; • refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of existing product approvals; • product seizure or detention, or refusal of the FDA to permit the import or export of products; • consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare programs; • mandated modification of promotional materials and labeling and the issuance of corrective information; • the issuance of safety alerts, Dear Health Care Provider (DHCP) letters, press releases and other communications containing warnings or other safety information about the product; or • injunctions or the imposition of civil or criminal penalties.
Other potential consequences include, among other things: • restrictions on the marketing or manufacturing of a product, complete withdrawal of the product from the market or product recalls; • fines, warning letters or holds on post-approval clinical studies; • refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of existing product approvals; • product seizure or detention, or refusal of the FDA to permit the import or export of products; • consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare programs; • mandated modification of promotional materials and labeling and the issuance of corrective information; • the issuance of safety alerts, Dear Health Care Provider (“DHCP”) letters, press releases and other communications containing warnings or other safety information about the product; or • injunctions or the imposition of civil or criminal penalties.
Jurisdictions In addition to regulations in the U.S., we may be subject to a variety of foreign regulations governing clinical trials and commercial sales and distribution of our products. For example, clinical trials conducted in the European Union must be done under an Investigational Medicinal Product Dossier, and the oversight of an Ethics Committee.
Jurisdictions In addition to regulations in the U.S., we may be subject to a variety of foreign regulations governing clinical trials and commercial sales and distribution of our products. For example, clinical trials conducted in the European Union (“EU”) must be done under an Investigational Medicinal Product Dossier, and the oversight of an Ethics Committee.
When only patients who met the prescribed entry criteria of having baseline eosinophils of > 150 cells/µL the rademikibart 150 mg group show statistically significant reduction in exacerbations (p = 0.023). • Treatment with 150 mg and 300 mg once every two weeks of rademikibart was well-tolerated. 5 TABLE OF CONTENTS Figure 1: Change in Pre-Bronchodilator FEV 1 Over Time in Patients with Eosinophil Count ≥150 cells/µL at Baseline Indicating Onset of Relief at Week 1 Improved Lung Function for Patients with Higher Eosinophil The results in the full population demonstrated significant improvements in lung function at Week 12 with among patients receiving rademikibart 150 mg or 300 mg compared to the placebo group (140 mL [p=0.005 ] and 189 mL [p improvement over placebo, respectively).
When only patients who met the prescribed entry criteria of having baseline eosinophils of > 150 cells/µL the rademikibart 150 mg group show statistically significant reduction in exacerbations (p = 0.023). • Treatment with 150 mg and 300 mg once every two weeks of rademikibart was well-tolerated. 7 TABLE OF CONTENTS Figure 1: Change in Pre-Bronchodilator FEV 1 Over Time in Patients with Eosinophil Count ≥150 cells/µL at Baseline Indicating Onset of Relief at Week 1 Improved Lung Function for Patients with Higher Eosinophil The results in the full population demonstrated significant improvements in lung function at Week 12 with among patients receiving rademikibart 150 mg or 300 mg compared to the placebo group (140 mL [p=0.005 ] and 189 mL [p improvement over placebo, respectively).
The Health Information Portability and Accountability Act of 1996 (“HIPAA”), as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”), and their respective implementing 17 TABLE OF CONTENTS regulations, imposes criminal and civil liability for knowingly and willfully executing a scheme, or attempting to execute a scheme, to defraud any healthcare benefit program, including private payors, knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense, or falsifying, concealing or covering up a material fact or making any materially false statements in connection with the delivery of or payment for healthcare benefits, items or services.
The Health Information Portability and Accountability Act of 1996 (“HIPAA”), as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”), and their respective implementing 19 TABLE OF CONTENTS regulations, imposes criminal and civil liability for knowingly and willfully executing a scheme, or attempting to execute a scheme, to defraud any healthcare benefit program, including private payors, knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense, or falsifying, concealing or covering up a material fact or making any materially false statements in connection with the delivery of or payment for healthcare benefits, items or services.
FDA sanctions could include, among other actions, refusal to approve pending applications, withdrawal of an approval, a clinical hold, warning or other enforcement letters, product recalls or withdrawals from the market, product seizures, total or partial suspension of production or distribution injunctions, fines, refusals of government contracts, restitution, disgorgement or civil or criminal penalties. 10 TABLE OF CONTENTS FDA approval is required before a drug or biological product may be marketed in the U.S. and they are also subject to other federal, state, and local statutes and regulations.
FDA sanctions could include, among other actions, refusal to approve pending applications, withdrawal of an approval, a clinical hold, warning or other enforcement letters, product recalls or withdrawals from the market, product seizures, total or partial suspension of production or distribution injunctions, fines, refusals of government contracts, restitution, disgorgement or civil or criminal penalties. 12 TABLE OF CONTENTS FDA approval is required before a drug or biological product may be marketed in the U.S. and they are also subject to other federal, state, and local statutes and regulations.
The process required by the FDA before product candidates may be marketed in the U.S. generally involves the following: • completion of extensive preclinical laboratory tests and preclinical animal studies, certain of which must be performed in accordance with Good Laboratory Practice (“GLP”) regulations and other applicable requirements; • submission to the FDA of an investigational new drug application (“IND”), which must become effective before human clinical studies may begin; • approval by an independent IRB or ethics committee at each clinical site before each clinical study may be initiated; • performance of adequate and well-controlled human clinical studies in accordance with Good Clinical Practice (“GCP”) requirements to establish the safety and efficacy, or with respect to biologics, the safety, purity and potency of the product candidate for each proposed indication; • preparation of and submission to the FDA of an NDA or BLA after completion of all pivotal clinical studies that include substantial evidence of safety, purity, and potency of the drug from analytical studies and from results of nonclinical testing and clinical trials; • satisfactory completion of an FDA advisory committee review, where appropriate and if applicable; • a determination by the FDA within 60 days of its receipt of an NDA or BLA to file the application for review; • satisfactory completion of an FDA inspection of the manufacturing facility or facilities where the proposed product is produced to assess compliance with current Good Manufacturing Practices (“cGMP”), and potential FDA inspection of nonclinical study and clinical trial sites that generated the data in support of the NDA or BLA to ensure compliance with GCP; and • FDA review and approval of an NDA or BLA prior to any commercial marketing or sale of the drug in the U.S.
The process required by the FDA before product candidates may be marketed in the U.S. generally involves the following: • completion of extensive preclinical laboratory tests and preclinical animal studies, certain of which must be performed in accordance with Good Laboratory Practice regulations and other applicable requirements; • submission to the FDA of an investigational new drug application (“IND”), which must become effective before human clinical studies may begin; • approval by an independent IRB or ethics committee at each clinical site before each clinical study may be initiated; • performance of adequate and well-controlled human clinical studies in accordance with Good Clinical Practice (“GCP”) requirements to establish the safety and efficacy, or with respect to biologics, the safety, purity and potency of the product candidate for each proposed indication; • preparation of and submission to the FDA of an NDA or BLA after completion of all pivotal clinical studies that include substantial evidence of safety, purity, and potency of the drug from analytical studies and from results of nonclinical testing and clinical trials; • satisfactory completion of an FDA advisory committee review, where appropriate and if applicable; • a determination by the FDA within 60 days of its receipt of an NDA or BLA to file the application for review; • satisfactory completion of an FDA inspection of the manufacturing facility or facilities where the proposed product is produced to assess compliance with cGMP, and potential FDA inspection of nonclinical study and clinical trial sites that generated the data in support of the NDA or BLA to ensure compliance with GCP; and • FDA review and approval of an NDA or BLA prior to any commercial marketing or sale of the drug in the U.S.
Regulation of Drugs and Biologics In the U.S., the FDA regulates drugs under the Federal Food, Drug, and Cosmetic Act (“FDCA”), and its implementing regulations, and biologics under the FDCA and the Public Health Service Act (“PHSA”), and its implementing regulations.
Regulation of Drugs and Biologics In the U.S., the FDA regulates drugs under the Federal Food, Drug, and Cosmetic Act (“FDCA”), and its implementing regulations, and biologics under the FDCA and the Public Health Service Act, and its implementing regulations.
Furthermore, there is no assurance that a product will be considered medically reasonable and necessary for a specific indication, will be considered cost-effective by third-party payors, that an adequate level of reimbursement will be 18 TABLE OF CONTENTS established even if coverage is available or that the third-party payors’ reimbursement policies will not adversely affect the ability for manufacturers to sell products profitably.
Furthermore, there is no assurance that a product will be considered medically reasonable and necessary for a specific indication, will be considered cost-effective by third-party payors, that an adequate level of reimbursement will be 20 TABLE OF CONTENTS established even if coverage is available or that the third-party payors’ reimbursement policies will not adversely affect the ability for manufacturers to sell products profitably.
It may be, however, difficult for U.S. shareholders to originate actions against us in the PRC in accordance with PRC laws because we are incorporated under the laws of the Cayman Islands and it may be difficult for U.S. shareholders, by virtue only of holding our ADSs or ordinary shares, to establish sufficient connection to the PRC for a PRC court to have jurisdiction as required under the PRC Civil Procedures Law.
It may be, however, difficult for U.S. shareholders to originate actions against us in the PRC in accordance with PRC laws because we are incorporated under the laws of the Cayman Islands and it may be difficult for U.S. shareholders, by virtue only of holding our ordinary shares, to establish sufficient connection to the PRC for a PRC court to have jurisdiction as required under the PRC Civil Procedures Law.
While we believe that our technology, the expertise of our executive and scientific team, research, clinical capabilities, development experience, 7 TABLE OF CONTENTS scientific knowledge and intellectual property provide us with competitive advantages, we face increasing competition from many different sources, including pharmaceutical and biotechnology companies, academic institutions, governmental agencies and public and provide research institutions.
While we believe that our 9 TABLE OF CONTENTS technology, the expertise of our executive and scientific team, research, clinical capabilities, development experience, scientific knowledge and intellectual property provide us with competitive advantages, we face increasing competition from many different sources, including pharmaceutical and biotechnology companies, academic institutions, governmental agencies and public and provide research institutions.
A biological product can also obtain pediatric market exclusivity in the U.S., as described above if the BLA sponsor voluntarily completes a pediatric study that fairly response to a “written request” from the FDA to conduct such study. 16 TABLE OF CONTENTS Clinical Trial Conduct and Product Approval Regulation in Non-U.S.
A biological product can also obtain pediatric market exclusivity in the U.S., as described above if the BLA sponsor voluntarily completes a pediatric study that fairly response to a “written request” from the FDA to conduct such study. 18 TABLE OF CONTENTS Clinical Trial Conduct and Product Approval Regulation in Non-U.S.
Some studies also include oversight by an independent group of qualified experts organized by the clinical study sponsor, known as a data safety monitoring board, which provides authorization for whether or not a study may move forward at designated check points based on access to some data from the study and may halt the clinical trial if it determines that there is an unacceptable safety risk for subjects or other grounds, such as no demonstration of efficacy.
Some studies also include oversight 13 TABLE OF CONTENTS by an independent group of qualified experts organized by the clinical study sponsor, known as a data safety monitoring board, which provides authorization for whether or not a study may move forward at designated check points based on access to some data from the study and may halt the clinical trial if it determines that there is an unacceptable safety risk for subjects or other grounds, such as no demonstration of efficacy.
The FDA does not regulate the 15 TABLE OF CONTENTS behavior of physicians in their choice of treatments. The FDA does, however, restrict manufacturer’s communications on the subject of off-label use of their products. Drug Product Marketing Exclusivity Market exclusivity provisions authorized under the FDCA can delay the submission or the approval of some marketing applications.
The FDA does not regulate the 17 TABLE OF CONTENTS behavior of physicians in their choice of treatments. The FDA does, however, restrict manufacturer’s communications on the subject of off-label use of their products. Drug Product Marketing Exclusivity Market exclusivity provisions authorized under the FDCA can delay the submission or the approval of some marketing applications.
We also believe that rademikibart, if approved, would offer the opportunity for significant healthcare cost savings by potentially reducing the length of stay for admitted acute COPD patients, as well as potentially reducing the frequency of emergency department re-visits and rehospitalizations. Rademikibart for Asthma and COPD Rademikibart is a human monoclonal IgG4 antibody directed against IL-4Rα.
We also believe that rademikibart, if approved, would offer the opportunity for significant healthcare cost savings by potentially reducing the length of stay for admitted acute COPD patients, as well as potentially reducing the frequency of emergency department re-visits and rehospitalizations. Rademikibart for Asthma and COPD 4 TABLE OF CONTENTS Rademikibart is a human monoclonal IgG4 antibody directed against IL-4Rα.
At the end of the period of two and a half years from the 9 TABLE OF CONTENTS first priority date of the patent application, separate patent applications can be pursued in any of the PCT member states either by direct national filing or, in some cases by filing through a regional patent organization, such as the European Patent Organisation.
At the end of the period of two and a half years from the first priority date of the patent application, separate patent applications can be pursued in any of the PCT member states either by direct national filing or, in some cases by filing through a regional patent organization, such as the European Patent Organisation.
Additional information regarding the Company, including our audited financial statements and descriptions of our business, is contained in the documents incorporated by reference in this Annual Report on Form 10-K. Our American Depositary shares are traded on The Nasdaq Global Market, under the symbol “CNTB.”
Additional information regarding the Company, including our audited financial statements and descriptions of our business, is contained in the documents incorporated by reference in this Annual Report on Form 10-K. Our ordinary shares are traded on The Nasdaq Global Market, under the symbol “CNTB.”
Under the PRC Civil Procedures Law, foreign shareholders may originate actions based on PRC law against a company in the PRC for disputes if they can establish sufficient nexus to the PRC for a PRC court to have 22 TABLE OF CONTENTS jurisdiction, and meet other procedural requirements, including, among others, the plaintiff must have a direct interest in the case, and there must be a concrete claim, a factual basis and a cause for the suit.
Under the PRC Civil Procedures Law, foreign shareholders may originate actions based on PRC law against a company in the PRC for disputes if they can establish sufficient nexus to the PRC for a PRC court to have jurisdiction, and meet other procedural requirements, including, among others, the plaintiff must have a direct interest in the case, and there must be a concrete claim, a factual basis and a cause for the suit.
Our policy is to seek to protect our proprietary position by, among other methods, filing patent applications in the U.S., the PRC and in other jurisdictions outside of the U.S. related to our proprietary technology, inventions, improvements and Product Candidates that are important to the development and implementation of our business.
Our policy is to seek to protect our proprietary position by, among other methods, filing patent applications in the U.S., the PRC and in other jurisdictions outside of the U.S. related to our proprietary technology, inventions, improvements and Product Candidates 10 TABLE OF CONTENTS that are important to the development and implementation of our business.
PRC courts may recognize and enforce foreign judgments in accordance with the requirements of the PRC Civil Procedures Law and other applicable laws and regulations based either on treaties between the PRC and the country where the judgment is made or on principles of reciprocity between jurisdictions.
PRC courts may recognize and enforce foreign judgments in accordance with the requirements of the PRC Civil Procedures Law and other applicable laws and regulations based either on treaties between the PRC and the country where the judgment is made or on principles of 24 TABLE OF CONTENTS reciprocity between jurisdictions.
A total of 226 patients were enrolled (1:1:1:1) with rademikibart groups receiving one loading dose of 600 mg followed by 150 mg every two weeks (“Q2W”), 300 mg Q2W or 300 mg every four weeks (“Q4W”) for 16 weeks. The placebo group received a matching placebo loading dose followed by placebo Q2W.
A total of 226 patients were enrolled (1:1:1:1) with rademikibart groups receiving one loading dose of 600 mg followed by 150 mg every two weeks (“Q2W”), 300 mg Q2W or 300 mg Q4W for 16 weeks. The placebo group received a matching placebo loading dose followed by placebo Q2W.
Under the License Agreement, Simcere will be responsible for 4 TABLE OF CONTENTS rademikibart’s BLA for Atopic Dermatitis (“AD”) and asthma in China and will also conduct and be responsible for the costs of all future clinical studies in all additional disease indications for rademikibart Simcere pursues in Greater China.
Under the License Agreement, Simcere will be responsible for rademikibart’s BLA for Atopic Dermatitis (“AD”) and asthma in China and will also conduct and be responsible for the costs of all future clinical studies in all additional disease indications for rademikibart Simcere pursues in Greater China.
Regulatory authorities, such as the FDA, may impose a partial or full clinical hold, or the IRB or the 11 TABLE OF CONTENTS sponsor may suspend a clinical trial at any time on various grounds, including a finding that the subjects are being exposed to an unacceptable health risk or that the trial is unlikely to meet its stated objectives.
Regulatory authorities, such as the FDA, may impose a partial or full clinical hold, or the IRB or the sponsor may suspend a clinical trial at any time on various grounds, including a finding that the subjects are being exposed to an unacceptable health risk or that the trial is unlikely to meet its stated objectives.
The legislative and regulatory landscape for privacy and data protection 20 TABLE OF CONTENTS continues to evolve, and there has been an increasing amount of focus on privacy and data protection issues with the potential to affect our business, including through affecting our customers.
The legislative and regulatory landscape for privacy and data protection continues to evolve, and there has been an increasing amount of focus on privacy and data protection issues with the potential to affect our business, including through affecting our customers.
Other Laws We are subject to a variety of financial disclosure and securities trading regulations as a public company, including laws relating to the oversight activities of the SEC and the regulations of The Nasdaq Global Market, on which our ADSs are traded.
Other Laws We are subject to a variety of financial disclosure and securities trading regulations as a public company, including laws relating to the oversight activities of the SEC and the regulations of The Nasdaq Global Market, on which our ordinary shares are traded.
We own a patent family with claims directed to the composition of matter of rademikibart that includes two granted U.S. patents, one pending U.S. patent application, over 10 foreign patents issued in such jurisdictions as China, Israel, Korea, Singapore, and others, and over five foreign patent applications pending in such jurisdictions as Europe, Canada, and Brazil.
We own a patent family with claims directed to the composition of matter of rademikibart that includes two granted U.S. patents, one pending U.S. patent application, over 28 foreign patents issued in such jurisdictions as China, Israel, Korea, Singapore, and others, and over seven foreign patent applications pending in such jurisdictions as Europe, Canada, and Brazil.
We also own a patent family with claims directed to formulations of rademikibart that includes a pending U.S. patent application, at least five foreign patents issued in such jurisdictions as China, Taiwan, and South Africa, and over 15 foreign patent applications pending in such jurisdictions as Europe, Canada, Brazil, and others.
We also own a patent family with claims directed to formulations of rademikibart that includes a pending U.S. patent application, at least nine foreign patents issued in such jurisdictions as China, Taiwan, and South Africa, and over 17 foreign patent applications pending in such jurisdictions as Europe, Canada, Brazil, and others.
Rademikibart binds to a region of the IL-4Rα that is 3 TABLE OF CONTENTS associated with high binding affinity and potency for IL-4Rα, which we believe may lead to an improved clinical response and possible differentiating safety profile for this class of medication.
Rademikibart binds to a region of the IL-4Rα that is associated with high binding affinity and potency for IL-4Rα, which we believe may lead to an improved clinical response and possible differentiating safety profile within this class of medication.
Although a PCT application does not issue as a patent, it allows the applicant to seek protection in any of the member states through national/regional-phase applications.
Although a PCT application does not issue as a patent, it allows the applicant to seek protection in any of 11 TABLE OF CONTENTS the member states through national/regional-phase applications.
As of December 31, 2024, we own more than 40 issued U.S. or foreign patents and had more than 50 pending patent applications in various countries, including the U.S., the PRC, Europe, Australia, Canada, Korea, Japan and others.
As of December 31, 2025, we own more than 93 issued U.S. or foreign patents and had more than 50 pending patent applications in various countries, including the U.S., the PRC, Europe, Australia, Canada, Korea, Japan and others.
In addition, exclusive marketing rights in the U.S. 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.
In addition, exclusive marketing rights in the U.S. 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 relating to the approved indication or use of patients with the relevant rare disease or condition.
Regulations on Company Establishment and Foreign Investment The establishment, operation and management of corporate entities in the PRC are governed by the Company Law of the PRC (the “PRC Company Law”), which was promulgated by the Standing Committee of the National People’s Congress (the “NPC”) in December 1993 and further amended in December 1999, August 2004, October 2005, December 2013, October 2018 and July 2024, respectively.
Regulations on Company Establishment and Foreign Investment The establishment, operation and management of corporate entities in the PRC are governed by the Company Law of the PRC (the “PRC Company Law”), which was promulgated by the Standing Committee of the National People’s Congress (the “NPC”) in December 1993 and further amended in December 1999, August 2004, October 2005, December 2013, October 2018 and December 2023 (with such amendment becoming effective in July 2024), respectively.
Figure 2: Absolute Change from Baseline in Mean Pre-bronchodilator (trough) FEV 1 at Week 12 by Eosinophil Subgroup with Rademikibart Compared with Placebo (CBP-201-WW002) 6 TABLE OF CONTENTS Atopic Dermatitis Clinical Trial Results Although Connect has decided to not currently pursue further development of rademikibart for AD, the results of the completed Phase 2, randomized, placebo-controlled studies in participants with AD provides support for the chronic asthma and COPD programs and the opportunity to potentially use rademikibart in a Q4W regimen.
Figure 2: Absolute Change from Baseline in Mean Pre-bronchodilator (trough) FEV 1 at Week 12 by Eosinophil Subgroup with Rademikibart Compared with Placebo (CBP-201-WW002) 8 TABLE OF CONTENTS Atopic Dermatitis Clinical Trial Results Although Connect has decided to not currently pursue further development of rademikibart for AD, the results of the completed Phase 2, randomized, placebo-controlled studies in participants with AD provides support for the chronic asthma and COPD programs and the opportunity to potentially use rademikibart in an every four weeks (“Q4W”) regimen.
If a product that has orphan drug designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to orphan drug 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 disease or condition for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity or if the FDA finds that the holder of the orphan drug exclusivity has not shown that it can assure the availability of sufficient quantities of the orphan drug to meet the needs of patients with the disease or 14 TABLE OF CONTENTS condition for which the drug or biologic was designated.
If a product that has orphan drug designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to orphan drug 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 approved indication or use within such disease or condition for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity in the relevant indication or if the FDA finds that the holder of the orphan drug exclusivity has not shown that it can assure the availability of sufficient quantities of the orphan drug to meet the needs relating to the approved indication or use of patients with the disease or condition for which the drug or biologic was designated.
We also rely on trade secrets and know-how 8 TABLE OF CONTENTS relating to our proprietary technology and Product Candidates, and we may in the future rely on in-licensing opportunities, to develop, strengthen and maintain our proprietary position in our field.
We also rely on trade secrets and know-how relating to our proprietary technology and Product Candidates, and we may in the future rely on in-licensing opportunities, to develop, strengthen and maintain our proprietary position in our field.
Although no head-to-head trials have been conducted, and data from unrelated clinical trials cannot reliably be compared due to differences in trial designs, site locations, subject characteristics and other factors, in cross-study comparisons rademikibart demonstrated greater Forced Expiratory Volume in One Second (“FEV 1 ”) response than seen in clinical trials of currently approved biologics using the initial protocol-specified baseline eosinophils > 150 cells/µL.
Although no head-to-head trials have been conducted, and data from unrelated clinical trials cannot reliably be compared due to differences in trial designs, site locations, subject characteristics and other factors, in cross-study comparisons rademikibart demonstrated greater FEV 1 response than seen in clinical trials of currently approved biologics using the initial protocol-specified baseline eosinophils > 150 cells/µL.
Company Information Connect was incorporated on November 23, 2015 in the Cayman Islands as an exempted company with limited liability. Our principal executive offices are located at 3580 Carmel Mountain Road, Suite 200, San Diego, California 92130, and our telephone number is (858) 727-1040. Our website address is www.connectbiopharm.com .
Company Information Connect was incorporated on November 23, 2015 in the Cayman Islands as an exempted company with limited liability. Our principal executive offices are located at 3580 Carmel Mountain Road, Suite 200, San Diego, California 92130, and our telephone number is (877) 245-2787. Our website address is www.connectbiopharma.com .
Millions more patients experience exacerbations, but are treated in the outpatient setting. In our completed Phase 2 asthma clinical trial, rademikibart has demonstrated encouraging efficacy and safety data, as well as rapid onset of action in less than 24 hours.
Millions 5 TABLE OF CONTENTS more patients experience exacerbations, but are treated in the outpatient setting. In our completed Phase 2 asthma clinical trial, rademikibart has demonstrated encouraging long-term (6 month) efficacy and safety data, as well as rapid onset of action in less than 24 hours.
We are also subject to various laws, regulations and recommendations relating to safe working conditions, laboratory practices and the experimental use of animals. Human Capital Management At December 31, 2024, we had a total of 62 full-time employees, 35 of whom were engaged in research and development activities and 27 of whom were engaged in general and administrative activities.
We are also subject to various laws, regulations and recommendations relating to safe working conditions, laboratory practices and the experimental use of animals. Human Capital Management At December 31, 2025, we had a total of 64 full-time employees, 38 of whom were engaged in research and development activities and 26 of whom were engaged in general and administrative activities.
ITEM 1. BUSINESS. Overview Connect Biopharma, headquartered in San Diego, California, is a clinical-stage biopharmaceutical company focused on advancing rademikibart, a potentially best-in-class next generation anti-interleukin-4-receptor alpha (“IL-4Rα”) antibody, to transform acute and chronic care in asthma and chronic obstructive pulmonary disease (“COPD”).
ITEM 1. BUSINESS. Overview Connect Biopharma, headquartered in San Diego, California, is a clinical-stage biopharmaceutical company dedicated to transforming care for asthma and chronic obstructive pulmonary disease (“COPD”). The Company is advancing rademikibart, a next-generation, potentially best-in-class antibody designed to target interleukin-4-receptor alpha (“IL-4Rα”).
Further, we believe that, if rademikibart were approved for the treatment of acute asthma, a significant percentage of asthma patients treated acutely with rademikibart would remain on it chronically.
As a result, we believe there exists a significant unmet need for more effective therapy for the treatment of acute asthma. Further, we believe that, if rademikibart were approved for the treatment of acute asthma, a significant percentage of asthma patients treated acutely with rademikibart would remain on it chronically.
Among other reforms, the IRA imposes inflation rebates on drug and biological product manufacturers for products reimbursed under Medicare Parts B and D if the prices of those products increase faster than inflation which began in 2023; implements changes to the Medicare Part D benefit that, which began in 2025, will cap benefit annual out-of-pocket spending at $2,000, with new discount obligations for pharmaceutical manufacturers; and, beginning in 2026, establishes a “maximum fair price” for a fixed number of pharmaceutical and biological products covered under Medicare Parts B and D following a price negotiation process with the Centers for Medicare and Medicaid Services.
In August 2022, the Inflation Reduction Act of 2022 (the “IRA”) was signed into law, which implements substantial changes to the Medicare program, including drug pricing reforms and changes to the Medicare Part D benefit design. 21 TABLE OF CONTENTS Among other reforms, the IRA imposes inflation rebates on drug and biological product manufacturers for products reimbursed under Medicare Parts B and D if the prices of those products increase faster than inflation which began in 2023; implements changes to the Medicare Part D benefit that cap benefit annual out-of-pocket spending at $2,000, with new discount obligations for pharmaceutical manufacturers, which began in 2025; and establishes a “maximum fair price” for a fixed number of pharmaceutical and biological products covered under Medicare Parts B and D following a price negotiation process with the CMS, which began in 2026.
In addition, individual states in the U.S. have also become increasingly active in implementing regulations designed to address pharmaceutical product pricing, such as transparency measures that require the disclosure of prices, including price or patient reimbursement constraints, discounts, restrictions on specific product access and changes, marketing cost disclosure and transparency measures and, in some cases, mechanisms to encourage importation from other countries and bulk purchasing costs, and research costs, among others. 19 TABLE OF CONTENTS Furthermore, there has been increased interest by third party payors and governmental authorities as to pricing systems and publication of discounts and list prices for drug spending.
In addition, individual states in the U.S. have also become increasingly active in implementing regulations designed to address pharmaceutical product pricing, such as transparency measures that require the disclosure of prices, including price or patient reimbursement constraints, discounts, restrictions on specific product access and changes, marketing cost disclosure, drug price reporting and other transparency measures and, in some cases, mechanisms to encourage importation from other countries and bulk purchasing costs, and research costs, among others.
In addition, under the Pediatric Research Equity Act (“PREA”), an NDA or BLA or supplement to an NDA or BLA must contain data to assess the safety and effectiveness of the biological product candidate for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the product is deemed safe and effective.
The submission of an NDA or BLA requires payment of a substantial application user fee to the FDA, unless a waiver or exemption applies. 14 TABLE OF CONTENTS In addition, under the Pediatric Research Equity Act (“PREA”), an NDA or BLA or supplement to an NDA or BLA must contain data to assess the safety and effectiveness of the biological product candidate for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the product is deemed safe and effective.
These laws could create liability for us or increase our cost of doing business, and any failure to comply could result in harm to our reputation, and potentially fines and penalties.
These laws could create liability for us or increase our cost of doing business, and any failure to comply could result in harm to our reputation, and potentially fines and penalties. Environmental, Health and Safety Laws Our operations are subject to complex and increasingly stringent environmental, health and safety laws and regulations.
Such activities include: (1) establishing by non-PRC investors of non-PRC-invested enterprises in the PRC alone or jointly with other investors; (2) acquiring by non-PRC investors of shares, equity, property shares, or other similar interests of PRC enterprises; (3) investing by non-PRC investors in new projects in the PRC alone or jointly with other investors; and (4) other forms of investment prescribed by laws, administrative regulations or the State Council.
Such activities include: (1) establishing by non-PRC investors of non-PRC-invested enterprises in the PRC alone or jointly with other investors; (2) acquiring by non-PRC investors of shares, equity, property shares, or other similar interests of PRC enterprises; (3) investing by non-PRC investors in new projects in the PRC alone or jointly with other investors; and (4) other forms of investment prescribed by laws, administrative regulations or the State Council. 23 TABLE OF CONTENTS In December 2019, the State Council promulgated the Regulations on Implementing the Foreign Investment Law of the PRC, which came into effect in January 2020.
As described above, approximately 50% of both asthma and COPD patients who are treated with Standard of Care (“SoC”) will meet the criteria for treatment failure within four weeks of an exacerbation and approximately 11%-20% will return for emergency care.
The ability to treat from acute to chronic administration is important because as described above, approximately 50% of both asthma and COPD patients who are treated with SoC will meet the criteria for treatment failure within four weeks of an exacerbation and approximately 11%-20% will return for emergency care.
Fast track designation applies to the combination of the product candidate and the specific indication for which it is being studied. The sponsor of a fast track product candidate has opportunities for more frequent interactions with the review team during product development and, once an NDA or BLA is submitted, the application may be eligible for priority review.
The sponsor of a fast track product candidate has opportunities for more frequent interactions with the 15 TABLE OF CONTENTS review team during product development and, once an NDA or BLA is submitted, the application may be eligible for priority review.
The key secondary efficacy endpoints of these trials are the rate of new exacerbations, the time to the first new exacerbation, change in symptoms, and change in lung function in the 28 days after randomization. Exploratory endpoints of these trials include time-to-discharge in hospitalized patients, and disease-specific patient-reported outcomes.
Key secondary efficacy endpoints of these trials include the rate of new exacerbations, time to the first new exacerbation, change in symptoms, and change in lung function in the 28 days after randomization. Exploratory endpoints include time-to-discharge in hospitalized patients and disease-specific patient-reported outcomes. We expect to report topline data for our ongoing Phase 2 acute exacerbation studies in mid-2026.
Specifically, product candidates are eligible for fast track designation if they are intended to treat a serious 13 TABLE OF CONTENTS or life-threatening disease or condition and demonstrate the potential to address unmet medical needs for the disease or condition.
Specifically, product candidates are eligible for fast track designation if they are intended to treat a serious or life-threatening disease or condition and demonstrate the potential to address unmet medical needs for the disease or condition. Fast track designation applies to the combination of the product candidate and the specific indication for which it is being studied.
Treatment failure includes: death (any cause), (re)admission to the hospital, an urgent visit to an outpatient or emergency department provider for symptoms that are worsening, or the necessity to intensify pharmacologic treatment.
The primary endpoint of these two trials is treatment failure over 28 days after randomization. Treatment failure includes: death (any cause), (re)admission to the hospital, an urgent visit to an outpatient or emergency department provider for symptoms that are worsening, or the necessity to intensify pharmacologic treatment.
CMS has published the negotiated prices for the initial ten drugs, which will first be effective in 2026, and the list of the subsequent 15 drugs that will be subject to negotiation, although the drug price negotiation program is currently subject to legal challenges. For that and other reasons, it is currently unclear how the IRA will be effectuated.
CMS published the negotiated prices for the initial ten drugs, which went into effect in 2026, and the subsequent 15 drugs, which will first be effective in 2027, as well as the next set of 15 drugs that will be subject to negotiation, although the drug price negotiation program is currently subject to legal challenges.
In 2024, the initial manufacturing process for rademikibart was successfully transferred to a U.S. contract manufacturing organization (“CMO”). In 2023, we entered into an exclusive License and Collaboration Agreement (the “License Agreement”), with Simcere Pharmaceutical Co., Ltd (“Simcere”) to develop and commercialize rademikibart in Greater China.
In 2023, we entered into an exclusive License and Collaboration Agreement (the “License Agreement”), with Simcere Pharmaceutical Co., Ltd (“Simcere”) to develop and commercialize rademikibart in Greater China.
Numerous states have adopted data privacy and security laws and regulations, which govern the privacy, processing and protection of consumer health-related information and other personal information. Such laws and regulations are subject to interpretation by various courts and other governmental authorities, thus creating potentially complex compliance issues for us and our future customers and strategic partners.
Such laws and regulations are subject to interpretation by various courts and other governmental authorities, thus creating potentially complex compliance issues for us and our future customers and strategic partners.
When the Regulations on Implementing the Foreign Investment Law of the PRC came into effect, the Regulation on Implementing the Sino-Foreign Equity Joint Venture Enterprise Law of the PRC, Provisional Regulations on the Duration of Sino-Foreign Equity Joint Venture Enterprise, the Regulations on Implementing the Wholly Foreign-Invested Enterprise Law of the PRC and the Regulations on Implementing the Sino-Foreign Cooperative Joint Venture Enterprise Law of the PRC were repealed simultaneously. 21 TABLE OF CONTENTS In December 2019, the MOFCOM and the State Administration for Market Regulation (the “SAMR”) promulgated the Measures on Reporting of Foreign Investment Information, which came into effect in January 2020.
When the Regulations on Implementing the Foreign Investment Law of the PRC came into effect, the Regulation on Implementing the Sino-Foreign Equity Joint Venture Enterprise Law of the PRC, Provisional Regulations on the Duration of Sino-Foreign Equity Joint Venture Enterprise, the Regulations on Implementing the Wholly Foreign-Invested Enterprise Law of the PRC and the Regulations on Implementing the Sino-Foreign Cooperative Joint Venture Enterprise Law of the PRC were repealed simultaneously.
Data can come from company-sponsored clinical studies intended to test the safety and effectiveness of the product, or from a number of alternative sources, including studies initiated and sponsored by investigators. The 12 TABLE OF CONTENTS submission of an NDA or BLA requires payment of a substantial application user fee to the FDA, unless a waiver or exemption applies.
Data can come from company-sponsored clinical studies intended to test the safety and effectiveness of the product, or from a number of alternative sources, including studies initiated and sponsored by investigators.
The Phase 2 acute asthma trial, Seabreeze ASTHMA STAT , and the acute COPD trial, Seabreeze COPD STAT will evaluate rademikibart plus SoC compared to SoC plus placebo in patients with asthma and COPD and Type 2 inflammation who are having an acute exacerbation. The primary endpoint of these two trials is treatment failure over 28 days after randomization.
The Phase 2 acute asthma trial, Seabreeze STAT ASTHMA , and the acute COPD trial, Seabreeze STAT COPD , are evaluating rademikibart plus Standard of Care (“SoC”) compared to SoC plus placebo in patients with asthma or COPD and Type 2 inflammation who are having an acute exacerbation.
Approximately 50% of asthma patients who visit emergency departments meet treatment failure criteria within four weeks of an exacerbation. Approximately 20% of such patients require a re-visit to the emergency department. Current standard of care treatment for these patients includes fast-acting inhaled bronchodilators and oral or intravenous (“IV”) corticosteroids.
Approximately 50% of asthma patients who visit emergency departments meet treatment failure criteria within four weeks of an exacerbation. Approximately 20% of such patients require a re-visit to the emergency department and an additional approximately 30% require medical care from another source, such as urgent care or medical clinics.
Severe cases may require IV magnesium sulfate, heliox therapy, and noninvasive ventilation. Intubation is considered if patients do not respond to these initial therapies. Approximately 50% of patients fail to improve on first-line treatments. As a result, we believe there exists a significant unmet need for more effective therapy for the treatment of acute asthma.
Current standard of care treatment for these patients includes fast-acting inhaled bronchodilators and oral or intravenous (“IV”) corticosteroids. Severe cases may require IV magnesium sulfate, heliox therapy, and noninvasive ventilation. Intubation is considered if patients do not respond to these initial therapies. Approximately 50% of patients fail to improve on first-line treatments.
We are focused on advancing rademikibart for treatment of eosinophilic driven respiratory diseases supported by results of the completed global asthma trial CBP-201-WW002 (see the Asthma Global Phase 2b Trial Results section below for further details on this trial ) .
Our current development plan is supported by the results from the completed global asthma trial CBP-201-WW002 (see the Asthma Global Phase 2b Trial Results section below for further details on this trial ) .
Orphan drug exclusivity does not prevent the FDA from approving a different drug or biologic for the same disease or condition, or the same drug or biologic for a different disease or condition. Among the other benefits of orphan drug designation are tax credits for some research and a waiver of the NDA or BLA application user fee.
Among the other benefits of orphan drug designation are tax credits for some research and a waiver of the NDA or BLA application user fee. A designated orphan drug may not receive orphan drug exclusivity if it is approved for an indication or use that is broader than the disease or condition for which it received orphan designation.
Patient Privacy and Data Security We are required to comply, as applicable, with numerous federal and state laws, including state security breach notification laws, state health and personal information privacy laws and federal and state consumer protection laws, and to govern the collection, use and disclosure of personal information.
For example, in the U.S., there are federal and state laws, including data breach notification laws, health information privacy and security laws and consumer protection laws, that govern the collection, use and disclosure of personal information. In addition, certain foreign laws govern the privacy and security of personal data, including health-related data.
In December 2019, the State Council promulgated the Regulations on Implementing the Foreign Investment Law of the PRC, which came into effect in January 2020.
In December 2019, the MOFCOM and the State Administration for Market Regulation (the “SAMR”) promulgated the Measures on Reporting of Foreign Investment Information, which came into effect in January 2020.
To address this unmet need, during the first half of 2025, we plan to initiate two Phase 2 trials of rademikibart for the treatment of acute exacerbations of chronic respiratory disease, including asthma and COPD.
We are focused on advancing rademikibart for treatment of eosinophilic driven respiratory diseases with a specific focus on treatment of acute exacerbations of asthma and COPD. To address this unmet need, in May 2025 we initiated two Phase 2 trials of rademikibart for the treatment of acute exacerbations of asthma and COPD.
While the HTA Regulation entered into force in January 2022, it currently only applies for oncology and advanced therapy medicinal product therapies, and it will begin to apply as from January 13, 2028 for orphan medicinal products and January 13, 2030 for other medicinal products.
The HTA Regulation entered into force in January 2022 and has been applicable since January 2025, with phased implementation based on the type of product, i.e., oncology and advanced therapy medicinal product therapies as of 2025, from January 13, 2028 for orphan medicinal products and January 13, 2030 for all other new medicinal products.
Other internal or government investigations or legal or regulatory proceedings, including lawsuits brought by private litigants, may also follow as a consequence. We have a policy against using Company funds for political purposes, and we incurred no costs associated with legal or regulatory fines or settlements associated with violations of bribery, corruption or anti-competitive standards.
Other internal or government investigations or legal or regulatory proceedings, including lawsuits brought by private litigants, may also follow as a consequence.
As of December 31, 2024, we had received the full upfront payment of $21 million, as well as $5.9 million for the achievement of certain development milestones and cost reimbursements. We remain eligible for additional significant milestone payments and royalties under the License Agreement.
As of December 31, 2025, we had received the full upfront payment of $21 million, as well as $6.5 million for the achievement of certain development milestones and cost reimbursements. In July 2025, Simcere submitted its New Drug Application for rademikibart to the NMPA of China for the treatment of AD in adults and adolescents.
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A designated orphan drug may not receive orphan drug exclusivity if it is approved for a use that is broader than the indication for which it received orphan designation.
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In April 2025, we announced feedback from our Type C meeting with the FDA, Division of Pulmonology, Allergy, and Critical Care, in the Office of Immunology and Inflammation. We obtained the FDA’s alignment on the design of our two parallel Phase 2 trials evaluating rademikibart in patients experiencing an acute exacerbation of asthma or COPD.
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In August 2022, former President Biden signed into law the Inflation Reduction Act of 2022 (the “IRA”), which implements substantial changes to the Medicare program, including drug pricing reforms and changes to the Medicare Part D benefit design.
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This treatment setting is of particular interest because available SoC therapy in the acute setting shows insufficient long-term treatment effect on symptoms and lung function, with frequent exacerbations leading to re-visits by patients to the acute care setting for respiratory critical care treatment.
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For example, the California Consumer Privacy Act of 2018 (the “CCPA”) went into effect on January 1, 2020 and was amended by the California Privacy Rights Act on January 1, 2023 (as amended, the “CPRA”). The CPRA creates individual privacy rights for California consumers and increases the privacy and security obligations of entities handling specific personal information.
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Preventing and delaying recurrent exacerbations in the first 28 days following an exacerbation is a significant unmet medical need and a crucial therapeutic goal in asthma and COPD. Despite current guideline recommendations, treatment with systemic corticosteroids and antibiotics is not wholly adequate.
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It also provides a private right of action for data breaches which has increased the likelihood of, and risks associated with, data breach litigation and creates a statutory damages framework. In addition, the CPRA created a new state agency to oversee implementation and enforcement efforts.
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In January 2026, we announced new in vitro and preclinical mechanism of action data providing mechanistic support for rademikibart’s potentially differentiated efficacy and safety profile, compared to what has been observed for dupilumab, and providing a potential basis for the large and rapid improvement in Forced Expiratory Volume in One Second (“FEV 1 ”) observed in the Company’s previously completed Phase 2b global chronic asthma study.
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Additional compliance investment and potential business process changes may be required as the CPRA evolves and is enforced. Similar laws have passed in several other states, and have been proposed in other states and at the federal level, reflecting a trend toward more stringent privacy legislation in the U.S.
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In March 2026, the Company announced positive topline data from its Phase 1 clinical pharmacology study of IV rademikibart in patients with stable asthma or COPD.
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The enactment of such laws could have potentially conflicting requirements that would make compliance challenging. In addition, most healthcare providers who may utilize our products we may sell in the future are subject to privacy and security requirements under HIPAA and HITECH.
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Rademikibart administered as a single 300 mg 2-minute IV push to asthma and COPD patients produced rapid improvement in FEV 1 with many patients experiencing improvements in airway function of ≥200 mL as early as 15 minutes post-dosing.
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We are not a HIPAA covered entity, do not intend to become one, and we do not operate as a business associate to any covered entities. Therefore, these privacy and security requirements do not apply to us.
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The rapid improvement in FEV 1 demonstrated with IV rademikibart in this study provides clinical confirmation of preclinical observations that rademikibart has a unique beneficial effect on bronchodilation. Mean FEV 1 improvements of ~200 - 400 mL were maintained through Day 29 in asthma and COPD patients. Rademikibart was generally well-tolerated in asthma and COPD patients.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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We have only one Product Candidate, rademikibart, currently in clinical development. If we are unable to successfully develop our Product Candidates or experience significant delays in doing so, our business will be materially harmed. We have only one Product Candidate, rademikibart, currently in clinical development. Any additional Product Candidates will need to progress through IND-enabling studies prior to clinical development.
If we are unable to successfully develop our Product Candidates or experience significant delays in doing so, our business will be materially harmed. We have only one Product Candidate, rademikibart, currently in clinical development. Any additional Product Candidates will need to progress through IND-enabling studies prior to clinical development.
We announced transitions in key leadership positions in the second of half of 2024, including transitions in the offices of Chief Executive Officer, President, Chief Development Officer, head of Finance, and General Counsel.
We announced transitions in key leadership positions in the second half of 2024, including transitions in the offices of Chief Executive Officer, President, Chief Development Officer, head of Finance, and General Counsel.
Among other things, the IRA imposes inflation rebates on drug and biological product manufacturers for products reimbursed under Medicare Parts B and D to if the prices of those products increase faster than inflation, which began in 2023; implements changes to the Medicare Part D benefit that, beginning in 2025, cap benefit annual out-of-pocket spending at $2,000, with new discount obligations for pharmaceutical manufacturers; and, beginning in 2026, establishes a “maximum fair price” for a fixed number of pharmaceutical and biological products covered under Medicare Parts B and D following a price negotiation process with CMS.
Among other things, the IRA imposes inflation rebates on drug and biological product manufacturers for products reimbursed under Medicare Parts B and D to if the prices of those products increase faster than inflation, which began in 2023; implements changes to the Medicare Part D benefit that cap benefit annual out-of-pocket spending at $2,000, with new discount obligations for pharmaceutical manufacturers, which began in 2025; and, beginning in 2026, establishes a “maximum fair price” for a fixed number of pharmaceutical and biological products covered under Medicare Parts B and D following a price negotiation process with CMS.
Despite the implementation of security measures, there can be no assurance that our cybersecurity risk management program and processes, including our policies, controls, or procedures, will be fully implemented, complied with or effective in protecting our IT Systems and Confidential Information.
Despite the implementation of our security measures, there can be no assurance that our cybersecurity risk management program and processes, including our policies, controls, or procedures, will be fully implemented, complied with or effective in protecting our IT Systems and Confidential Information.
Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. There could also be public announcements of the results of hearings, motions or other interim proceedings or developments.
Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. There could also be public announcements of the results of hearings, motions or other interim proceedings or developments.
The compensation period shall not exceed five years, and the total valid patent right period shall not exceed fourteen years after the new drug is approved for marketing.
The compensation period shall not exceed five years, and the total valid patent right period shall not exceed fourteen years after the new drug is approved for marketing.
If we are required to delay commercialization for an extended period of time, technological advances may develop and new competitor products may be launched, which may render our product non-competitive. We also cannot guarantee that other changes to PRC intellectual property laws would not have a negative impact on our intellectual property protection.
If we are required to delay commercialization for an extended period of time, technological advances may develop and new competitor products may be launched, which may render our product non-competitive. We also cannot guarantee that other changes to PRC intellectual property laws would not have a negative impact on our intellectual property protection.
Events that may prevent successful or timely initiation or completion of clinical trials include: • inability to generate sufficient preclinical, toxicology, or other in vivo or in vitro data to support the initiation or continuation of clinical trials; • delays in reaching a consensus with regulatory authorities on study design or implementation of the clinical trials; • delays or failure in obtaining regulatory authorization or allowance to commence a trial or inability to comply with conditions imposed by a regulatory authority regarding the scope or design of a study; • delays in reaching agreement on acceptable terms with prospective contract research organizations (“CROs”), and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical trial sites; • delays in identifying, recruiting and training suitable clinical investigators; • delays in obtaining required ethics committee or institutional review board (“IRB”) approval at each clinical trial site, or terminations or suspensions of our clinical trials by an IRB; • delays in manufacturing, testing, releasing, validating or importing/exporting sufficient stable quantities of our Product Candidates for use in clinical trials or the inability to do any of the foregoing; • insufficient or inadequate supply or quality of Product Candidates or other materials necessary for use in clinical trials, or delays in sufficiently developing, characterizing or controlling a manufacturing process suitable for clinical trials; • imposition of a temporary, partial, full, or permanent clinical hold by regulatory authorities for a number of reasons, including after review of an IND or amendment or equivalent foreign application or amendment; as a result of a new safety finding that presents unreasonable risk to clinical trial participants; or a negative finding from an inspection of our clinical trial operations or study sites; • developments in trials conducted by competitors for related technology that raises FDA, NMPA, EMA, or foreign regulatory authority concerns about risk to patients of the technology broadly, or findings by the FDA, 27 TABLE OF CONTENTS the NMPA or a foreign regulatory authority that an investigational protocol or plan is clearly deficient to meet its stated objectives; • delays or failure in recruiting, screening and enrolling suitable patients and delays or failure caused by patients withdrawing from clinical trials or failing to return for post-treatment follow-up; • difficulty collaborating with patient groups and investigators; • failure by our CROs, other third parties or us to adhere to clinical trial protocols; • failure to perform clinical trials in accordance with the FDA’s, the NMPA’s, the EMA’s, or any other comparable foreign regulatory authority’s GCPs or applicable regulatory guidelines in other countries; • occurrence of adverse events associated with the product candidate that are viewed to outweigh its potential benefits, or occurrence of adverse events in trials of the same class of agents conducted by other companies; • changes to clinical trial protocols; • clinical sites deviating from trial protocol or dropping out of a trial; • changes in regulatory requirements and guidance that require amending or submitting new clinical protocols; • changes in the standard of care on which a clinical development plan was based, which may require new or additional trials; • selection of clinical endpoints that require prolonged periods of observation or analyses of resulting data; • the cost of clinical trials of our Product Candidates being greater than we anticipate; • clinical trials of our Product Candidates producing negative or inconclusive results, which may result in our deciding, or regulators requiring us, to conduct additional clinical trials or abandon development of such Product Candidates; • transfer of manufacturing processes to larger-scale facilities operated by a CMO, and delays or failure by our CMOs or us to make any necessary changes to such manufacturing processes, including those related to our new high-yield cell line; and • third parties being unwilling or unable to satisfy their contractual obligations to us.
Events that may prevent successful or timely initiation or completion of clinical trials include: • inability to generate sufficient preclinical, toxicology, or other in vivo or in vitro data to support the initiation or continuation of clinical trials; • delays in reaching a consensus with regulatory authorities on study design or implementation of the clinical trials; • delays or failure in obtaining regulatory authorization or allowance to commence a trial or inability to comply with conditions imposed by a regulatory authority regarding the scope or design of a study; • delays in reaching agreement on acceptable terms with prospective contract research organizations (“CROs”), and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical trial sites; • delays in identifying, recruiting and training suitable clinical investigators; • delays in obtaining required ethics committee or institutional review board (“IRB”) approval at each clinical trial site, or terminations or suspensions of our clinical trials by an IRB; • delays in manufacturing, testing, releasing, validating or importing/exporting sufficient stable quantities of our Product Candidates for use in clinical trials or the inability to do any of the foregoing; 29 TABLE OF CONTENTS • insufficient or inadequate supply or quality of Product Candidates or other materials necessary for use in clinical trials, or delays in sufficiently developing, characterizing or controlling a manufacturing process suitable for clinical trials; • imposition of a temporary, partial, full, or permanent clinical hold by regulatory authorities for a number of reasons, including after review of an IND or amendment or equivalent foreign application or amendment; as a result of a new safety finding that presents unreasonable risk to clinical trial participants; or a negative finding from an inspection of our clinical trial operations or study sites; • developments in trials conducted by competitors for related technology that raises FDA, NMPA, EMA, or foreign regulatory authority concerns about risk to patients of the technology broadly, or findings by the FDA, the NMPA or a foreign regulatory authority that an investigational protocol or plan is clearly deficient to meet its stated objectives; • delays or failure in recruiting, screening and enrolling suitable patients and delays or failure caused by patients withdrawing from clinical trials or failing to return for post-treatment follow-up; • difficulty collaborating with patient groups and investigators; • failure by our CROs, other third parties or us to adhere to clinical trial protocols; • failure to perform clinical trials in accordance with the FDA’s, the NMPA’s, the EMA’s, or any other comparable foreign regulatory authority’s GCPs or applicable regulatory guidelines in other countries; • occurrence of adverse events associated with the Product Candidate that are viewed to outweigh its potential benefits, or occurrence of adverse events in trials of the same class of agents conducted by other companies; • changes to clinical trial protocols; • clinical sites deviating from trial protocol or dropping out of a trial; • changes in regulatory requirements and guidance that require amending or submitting new clinical protocols; • changes in the standard of care on which a clinical development plan was based, which may require new or additional trials; • selection of clinical endpoints that require prolonged periods of observation or analyses of resulting data; • the cost of clinical trials of our Product Candidates being greater than we anticipate; • clinical trials of our Product Candidates producing negative or inconclusive results, which may result in our deciding, or regulators requiring us, to conduct additional clinical trials or abandon development of such Product Candidates; • transfer of manufacturing processes to larger-scale facilities operated by a CMO, and delays or failure by our CMOs or us to make any necessary changes to such manufacturing processes, including those related to our new high-yield cell line; and • third parties being unwilling or unable to satisfy their contractual obligations to us.
Our future financing requirements will depend on many factors, including: • the type, number, scope, progress, expansions, results, costs and timing of our clinical trials and preclinical studies of our Product Candidates, which we are pursuing or may choose to pursue in the future; • potential future safety concerns related to the use of our Product Candidates; • adverse findings regarding the efficacy of our Product Candidates as additional information is acquired; • the costs and timing of manufacturing for our Product Candidates, including commercial manufacturing if any Product Candidate is approved; • the costs, timing and outcome of regulatory review of our Product Candidates; • the costs of obtaining, maintaining, enforcing and defending our patents and other intellectual property and proprietary rights and resolving disputes related to third parties’ intellectual property and proprietary rights; • our efforts to enhance operational systems and hire additional personnel to satisfy our obligations as a public company, including enhanced internal controls over financial reporting; • the costs associated with hiring additional personnel and consultants as our clinical activities increase; • the timing and amount of the royalty or other payments we must make to our licensors and other third parties; 25 TABLE OF CONTENTS • the costs and timing of establishing or securing sales and marketing capabilities if any Product Candidate is approved or in anticipation of approval; • our ability to achieve sufficient market acceptance, coverage and adequate reimbursement from third-party payors and adequate market share and revenue for any approved products; • the terms and timing of establishing and maintaining collaborations, licenses and other similar arrangements; and • costs associated with any Product Candidates, products or technologies that we may in-license or acquire.
Our future financing requirements will depend on many factors, including: • the type, number, scope, progress, expansions, results, costs and timing of our clinical trials and preclinical studies of our Product Candidates, which we are pursuing or may choose to pursue in the future; • potential future safety concerns related to the use of our Product Candidates; • adverse findings regarding the efficacy of our Product Candidates as additional information is acquired; • the costs and timing of manufacturing for our Product Candidates, including commercial manufacturing if any Product Candidate is approved; • the costs, timing and outcome of regulatory review of our Product Candidates; 27 TABLE OF CONTENTS • the costs of obtaining, maintaining, enforcing and defending our patents and other intellectual property and proprietary rights and resolving disputes related to third parties’ intellectual property and proprietary rights; • our efforts to enhance operational systems and hire additional personnel to satisfy our obligations as a public company, including enhanced internal controls over financial reporting; • the costs associated with hiring additional personnel and consultants as our clinical activities increase; • the timing and amount of the royalty or other payments we must make to our licensors and other third parties; • the costs and timing of establishing or securing sales and marketing capabilities if any Product Candidate is approved or in anticipation of approval; • our ability to achieve sufficient market acceptance, coverage and adequate reimbursement from third-party payors and adequate market share and revenue for any approved products; • the terms and timing of establishing and maintaining collaborations, licenses and other similar arrangements; and • costs associated with any Product Candidates, products or technologies that we may in-license or acquire.
Even if we are able to establish agreements with third-party manufacturers, reliance on third-party manufacturers entails additional risks, including: • the failure of the third party to manufacture our Product Candidates according to our schedule, or at all, including if our third-party contractors give greater priority to the supply of other products over our Product Candidates or otherwise do not satisfactorily perform according to the terms of the agreements between us and them; • the reduction or termination of production or deliveries by suppliers, or the raising of prices or renegotiation of terms; • the termination or nonrenewal of arrangements or agreements by our third-party contractors at a time that is costly or inconvenient for us; • the breach by the third-party contractors of our agreements with them; • the failure of the third-party contractors to comply with applicable regulatory requirements; • the failure of the third-party contractors to manufacture our Product Candidates according to our specifications and/or the regulatory requirements; 38 TABLE OF CONTENTS • the failure of our new U.S.-based CMO to satisfactorily initiate or scale up its manufacturing processes, including any delays or failures associated with the transfer of our new high-yield cell-line to such CMO; • the mislabeling of clinical supplies, potentially resulting in the wrong dose amounts being supplied or study drug or placebo not being properly identified; • clinical supplies not being delivered to clinical sites on time, leading to clinical trial interruptions, or of drug supplies not being distributed to commercial vendors in a timely manner, resulting in lost sales; and • the misappropriation of our proprietary information, including our trade secrets and know-how.
Even if we are able to establish agreements with third-party manufacturers, reliance on third-party manufacturers entails additional risks, including: • the failure of the third party to manufacture our Product Candidates according to our schedule, or at all, including if our third-party contractors give greater priority to the supply of other products over our Product Candidates or otherwise do not satisfactorily perform according to the terms of the agreements between us and them; • the reduction or termination of production or deliveries by suppliers, or the raising of prices or renegotiation of terms; • the termination or nonrenewal of arrangements or agreements by our third-party contractors at a time that is costly or inconvenient for us; • the breach by the third-party contractors of our agreements with them; • the failure of the third-party contractors to comply with applicable regulatory requirements; 40 TABLE OF CONTENTS • the failure of the third-party contractors to manufacture our Product Candidates according to our specifications and/or the regulatory requirements; • the failure of our new U.S.-based CMO to satisfactorily initiate or scale up its manufacturing processes, including any delays or failures associated with the transfer of our new high-yield cell-line to such CMO; • the mislabeling of clinical supplies, potentially resulting in the wrong dose amounts being supplied or study drug or placebo not being properly identified; • clinical supplies not being delivered to clinical sites on time, leading to clinical trial interruptions, or of drug supplies not being distributed to commercial vendors in a timely manner, resulting in lost sales; and • the misappropriation of our proprietary information, including our trade secrets and know-how.
Failure to comply with the filing requirements or any other requirements under the New Filing Rules could result in orders of rectification, warnings, fines to the relevant PRC domestic companies ranging from RMB 1 million to RMB 10 million and fines on the controlling shareholder and other responsible persons, restrictions on our operations, having to delist from a stock exchange, the halting of securities offerings to foreign investors and other actions that could materially and adversely affect our operations and the interests of our investors and cause a significant depreciation in the price of our ordinary shares and ADSs.
Failure to comply with the filing requirements or any other requirements under the New Filing Rules could result in orders of rectification, warnings, fines to the relevant PRC domestic companies ranging from RMB 1 million to RMB 10 million and fines on the controlling shareholder and other responsible persons, restrictions on our operations, having to delist from a stock exchange, the halting of securities offerings to foreign investors and other actions that could materially and adversely affect our operations and the interests of our investors and cause a significant depreciation in the price of our ordinary shares.
The techniques used by cybercriminals change frequently, may not be recognized until launched, and can originate from a wide variety of sources, including outside groups such as external service providers, organized crime affiliates, hacktivists, terrorist organizations or hostile foreign governments or agencies. As such, we may also experience cybersecurity breaches that may remain undetected for an extended period.
Further, the techniques used by cybercriminals change frequently, may not be recognized until launched, and can originate from a wide variety of sources, including outside groups such as external service providers, organized crime affiliates, hacktivists, terrorist organizations or hostile foreign governments or agencies. As such, we may also experience cybersecurity breaches that may remain undetected for an extended period.
Finally, being deemed an investment company under the Investment Company Act could also make us unable to comply with our reporting obligations as a public company in the U.S., which would have a material adverse effect on the liquidity and value of our ADSs and ordinary shares, and may affect our ability to offer securities to investors in the U.S. market and our ability to continue to be listed on the Nasdaq Global Market.
Finally, being deemed an investment company under the Investment Company Act could also make us unable to comply with our reporting obligations as a public company in the U.S., which would have a material adverse effect on the liquidity and value of our ordinary shares, and may affect our ability to offer securities to investors in the U.S. market and our ability to continue to be listed on the Nasdaq Global Market.
In relation to cross-border transfers, case law from the Court of Justice of the European Union (“CJEU”) states that reliance on the standard contractual clauses - a standard form of contract approved by the European Commission as an adequate personal information transfer mechanism - alone may not necessarily be sufficient in all circumstances and that transfers must be assessed on a case-by-case basis.
In relation to cross-border transfers, case law from the Court of Justice of the European Union states that reliance on the standard contractual clauses - a standard form of contract approved by the European Commission as an adequate personal information transfer mechanism - alone may not necessarily be sufficient in all circumstances and that transfers must be assessed on a case-by-case basis.
The degree of market acceptance of our products, if approved for commercial sale, will depend on a number of factors, including: • demonstration of clinical efficacy and safety compared to other more established products; • the indications for which our Product Candidates are approved; • the limitation of our targeted patient population and other limitations or warnings contained in any regulatory authority-approved labeling; • the prevalence and severity of the diseases and any side effects; • the convenience and ease of administration; • the acceptance of a new drug or biologic for the relevant indication by healthcare providers and their patients; • the reimbursement, pricing and cost-effectiveness of our products, as well as the cost of treatment with our products in relation to alternative treatments and therapies; • our ability to obtain and maintain sufficient third-party coverage and adequate reimbursement from government healthcare programs, including Medicare and Medicaid, private health insurers and other third-party payors; 42 TABLE OF CONTENTS • the willingness of patients to pay all, or a portion of, out-of-pocket costs in the absence of coverage and adequate reimbursement by third-party payors and government authorities; • any restrictions on the use of our products, and the prevalence and severity of any adverse effects; • the success of our physician education programs; • the timing of market introduction of our products as well as competitive drugs; • potential product liability claims; • the availability of alternative effective treatments for the disease indications our p Product Candidates are intended to treat and the relative risks, benefits and costs of those treatments; • the effectiveness of our or any of our potential future collaborators’ distribution, sales and marketing strategies; and • unfavorable publicity relating to the product.
The degree of market acceptance of our products, if approved for commercial sale, will depend on a number of factors, including: • demonstration of clinical efficacy and safety compared to other more established products; • the indications for which our Product Candidates are approved; 44 TABLE OF CONTENTS • the limitation of our targeted patient population and other limitations or warnings contained in any regulatory authority-approved labeling; • the prevalence and severity of the diseases and any side effects; • the convenience and ease of administration; • the acceptance of a new drug or biologic for the relevant indication by healthcare providers and their patients; • the reimbursement, pricing and cost-effectiveness of our products, as well as the cost of treatment with our products in relation to alternative treatments and therapies; • our ability to obtain and maintain sufficient third-party coverage and adequate reimbursement from government healthcare programs, including Medicare and Medicaid, private health insurers and other third-party payors; • the willingness of patients to pay all, or a portion of, out-of-pocket costs in the absence of coverage and adequate reimbursement by third-party payors and government authorities; • any restrictions on the use of our products, and the prevalence and severity of any adverse effects; • the success of our physician education programs; • the timing of market introduction of our products as well as competitive drugs; • potential product liability claims; • the availability of alternative effective treatments for the disease indications our Product Candidates are intended to treat and the relative risks, benefits and costs of those treatments; • the effectiveness of our or any of our potential future collaborators’ distribution, sales and marketing strategies; and • unfavorable publicity relating to the product.
Our operating plans and other demands on our cash resources could change as a result of many factors currently unknown to us, and we might need to seek additional funds sooner than planned, through public or private equity or debt financings or other capital sources, including potentially collaborations, licenses and other similar arrangements.
Our operating plans and other demands on our cash resources could change as a result of many factors currently unknown to us, and we might need to seek additional funds sooner than planned, through public or private equity or debt financings or other capital sources, including potentially collaborations, licenses, royalty financings, and other similar arrangements.
The ability of U.S. authorities to bring actions for violations of U.S. securities law and regulations against us, our directors, executive officers or the expert named in this Annual Report on Form 10-K may be limited. Therefore, investors may not be afforded the same protection as provided to investors in U.S. domestic companies. The SEC, the U.S.
The ability of U.S. authorities to bring actions for violations of U.S. securities law and regulations against us, our directors, executive officers or the expert named in this Annual Report on Form 10-K may be limited. Therefore, investors may not be afforded the same protection as provided to investors in U.S. domestic companies.
In particular, any adverse impact to the availability, integrity, or confidentiality of our IT Systems or Confidential Information can result in legal claims or proceedings (such as class actions), regulatory investigations and enforcement actions, fines and penalties, and negative reputational impact, any or all of which could materially adversely affect our business, operating results, and financial condition.
Any adverse impact to the availability, integrity, or confidentiality of our IT Systems or Confidential Information can result in legal claims or proceedings (such as class actions), regulatory investigations and enforcement actions, fines and penalties, and negative reputational impact, any or all of which could materially adversely affect our business, operating results, and financial condition.
In addition, failure to comply with FDA, NMPA and other comparable foreign regulatory requirements may subject us to administrative or judicially imposed sanctions, including: • delays in reviewing or the rejection of product applications or supplements to approved applications; • require us to change the way a product is distributed, conduct additional clinical trials, change the labeling of a product or require us to conduct additional post-marketing studies or surveillance; • restrictions on our ability to conduct clinical trials, including full or partial clinical holds on ongoing or planned trials; • restrictions on the products, manufacturers or manufacturing process; • warning or untitled letters; • civil, administrative and criminal penalties; • injunctions; • suspension or withdrawal of regulatory approvals; • product seizures, detentions or import bans; 41 TABLE OF CONTENTS • voluntary or mandatory product recalls and publicity requirements; • total or partial suspension of production; and • imposition of restrictions on operations, including costly new manufacturing requirements.
In addition, failure to comply with FDA, NMPA and other comparable foreign regulatory requirements may subject us to administrative or judicially imposed sanctions, including: • delays in reviewing or the rejection of product applications or supplements to approved applications; • require us to change the way a product is distributed, conduct additional clinical trials, change the labeling of a product or require us to conduct additional post-marketing studies or surveillance; 43 TABLE OF CONTENTS • restrictions on our ability to conduct clinical trials, including full or partial clinical holds on ongoing or planned trials; • restrictions on the products, manufacturers or manufacturing process; • warning or untitled letters; • civil, administrative and criminal penalties; • injunctions; • suspension or withdrawal of regulatory approvals; • product seizures, detentions or import bans; • voluntary or mandatory product recalls and publicity requirements; • total or partial suspension of production; and • imposition of restrictions on operations, including costly new manufacturing requirements.
The pharmaceutical industry in the PRC is subject to comprehensive government regulation and supervision encompassing the approval, registration, manufacturing, packaging, licensing and marketing of new drugs. See Item 1. Business Overview—Government Regulation and Product Approval—PRC Regulation” for a discussion of the regulatory requirements that are applicable to our current and planned business activities in the PRC.
The pharmaceutical industry in the PRC is subject to comprehensive government regulation and supervision encompassing the approval, registration, manufacturing, packaging, licensing and marketing of new drugs. See Item 1. “Business Overview—Government Regulation and Product Approval—PRC Regulation” for a discussion of the regulatory requirements that are applicable to our current and planned business activities in the PRC.
As we continue to expand into other foreign countries and jurisdictions, we may be subject to additional laws and regulations that may affect how we conduct business. Regulatory authorities in the PRC have implemented and are considering a number of legislative and regulatory proposals concerning data protection.
As we continue to expand into other foreign countries and jurisdictions, we may be subject to additional, similar laws and regulations that may affect how we conduct business. Regulatory authorities in the PRC have implemented and are considering a number of legislative and regulatory proposals concerning data protection.
Conversely, if we decide to convert our Renminbi into U.S. dollars for the purpose of making payments for dividends on our ordinary shares or ADSs or for other business purposes, appreciation of the U.S. dollar against the Renminbi would have a negative effect on the U.S. dollar amount available to us.
Conversely, if we decide to convert our Renminbi into U.S. dollars for the purpose of making payments for dividends on our ordinary shares or for other business purposes, appreciation of the U.S. dollar against the Renminbi would have a negative effect on the U.S. dollar amount available to us.
Despite the above, where a data processor transfers data abroad, it may be exempted from applying for a cross-border transfer security assessment, 84 TABLE OF CONTENTS concluding a standard contract for personal information to be provided abroad or passing a security certificate for personal information protection if it satisfies any of the following conditions: (1) where it is really necessary to provide personal information abroad for the purpose of concluding or performing a contract to which an individual concerned is a party, such as cross-border shopping, cross-border delivery, cross-border remittance, cross-border payment, cross-border account opening, air ticket and hotel reservation, visa handling and examination services; (2) where it is really necessary to provide employees’ personal information abroad for the purpose of conducting cross-border human resources management in accordance with the employment rules and regulations and collective contracts formulated in accordance with the law; (3) where it is really necessary to provide personal information abroad in an emergency to protect the life, health and property safety of a natural person; or (4) where a data processor other than a critical information infrastructure operator provides abroad the personal information (excluding sensitive personal information) of not more than 100,000 persons accumulatively as of January 1 of the current year.
Despite the above, where a data processor transfers data abroad, it may be exempted from applying for a cross-border transfer security assessment, concluding a standard contract for personal information to be provided abroad or passing a security certificate for personal information protection if it satisfies any of the following conditions: (1) where it is really necessary to provide personal information abroad for the purpose of concluding or performing a contract to which an individual concerned is a party, such as cross-border shopping, cross-border delivery, cross-border remittance, cross-border payment, cross-border account opening, air ticket and hotel reservation, visa handling and examination services; (2) where it is really necessary to provide employees’ personal information abroad for the purpose of conducting cross-border human resources management in accordance with the employment rules and regulations and collective contracts formulated in accordance with the law; (3) where it is really necessary to provide personal information abroad in an emergency to protect the life, health and property safety of a natural person; or (4) where a data processor other than a critical information infrastructure operator provides abroad the personal information (excluding sensitive personal information) of not more than 100,000 persons accumulatively as of January 1 of the current year.
These fluctuations may occur due to a variety of factors, many of which are outside of our control, including, but not limited to: 46 TABLE OF CONTENTS • the timing and cost of, and level of investment in, research, development, regulatory approval and commercialization activities relating to our Product Candidates, which may change from time to time; • coverage and reimbursement policies with respect to our Product Candidates, if approved, and potential future drugs that compete with our products; • the cost of manufacturing our Product Candidates, which may vary depending on the quantity of production and the terms of our agreements with third-party manufacturers; • the timing and amount of the royalty or other payments we must make to the licensors and other third parties from whom we have in-licensed our acquired our Product Candidates, including payments due upon a change in control of our subsidiaries; • expenditures that we may incur to acquire, develop or commercialize additional Product Candidates and technologies; • the level of demand for any approved products, which may vary significantly; • future accounting pronouncements or changes in our accounting policies; and • the timing and success or failure of preclinical studies or clinical trials for our Product Candidates or competing product candidates, or any other change in the competitive landscape of our industry, including consolidation among our competitors or partners.
These fluctuations may occur due to a variety of factors, many of which are outside of our control, including, but not limited to: • the timing and cost of, and level of investment in, research, development, regulatory approval and commercialization activities relating to our Product Candidates, which may change from time to time; • coverage and reimbursement policies with respect to our Product Candidates, if approved, and potential future drugs that compete with our products; • the cost of manufacturing our Product Candidates, which may vary depending on the quantity of production and the terms of our agreements with third-party manufacturers; • the timing and amount of the royalty or other payments we must make to the licensors and other third parties from whom we have in-licensed our acquired our Product Candidates, including payments due upon a change in control of our subsidiaries; • expenditures that we may incur to acquire, develop or commercialize additional Product Candidates and technologies; • the level of demand for any approved products, which may vary significantly; • future accounting pronouncements or changes in our accounting policies; and • the timing and success or failure of preclinical studies or clinical trials for our Product Candidates or competing product candidates, or any other change in the competitive landscape of our industry, including consolidation among our competitors or partners.
If securities analysts or investors perceive these results to be negative, it could have an adverse effect on the price of our ADSs or ordinary shares. Any of the foregoing would have a material adverse effect on our business, financial condition, results of operations and prospects.
If securities analysts or investors perceive these results to be negative, it could have an adverse effect on the price of our ordinary shares. Any of the foregoing would have a material adverse effect on our business, financial condition, results of operations and prospects.
Increases in prices, including as a result of inflation and rising interest rates, for raw materials or other inputs that our suppliers use, or increases in logistics and related costs, have led and may continue to lead to higher operation costs for us.
Increases in prices for raw materials or other inputs that our suppliers use, or increases in logistics and related costs, including as a result of inflation, tariffs and rising interest rates, have led and may continue to lead to higher operation costs for us.
Until such time, if ever, as we can generate substantial revenues, we expect to finance our business and operational needs through equity offerings, debt financings or other financing sources, including potentially collaborations, licenses and other similar arrangements.
Until such time, if ever, as we can generate substantial revenues, we expect to finance our business and operational needs through equity offerings, debt financings or other financing sources, including potentially collaborations, licenses, royalty financings, and other similar arrangements.
If securities analysts or investors perceive these results to be negative, it could have an adverse effect on the price of our ADSs or ordinary shares. Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and prospects.
If securities analysts or investors perceive these results to be negative, it could have an adverse effect on the price of our ordinary shares. Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and prospects.
The market price for our ADSs may be influenced by those factors discussed in this “Risk Factors” section and many others, including: • political tensions between the U.S. and the PRC; • our ability to enroll subjects in our ongoing and planned clinical trials; • results (and interpretations of results) of our clinical trials and preclinical studies, and the results (and interpretations of results) of trials of our competitors or those of other companies in our market sector; • regulatory approval of our Product Candidates, or limitations to specific label indications or patient populations for its use, or changes or delays in the regulatory review process; • regulatory developments in the U.S., the PRC and foreign countries; 72 TABLE OF CONTENTS • changes in the structure of healthcare payment systems, especially in light of current reforms to the U.S. healthcare system; • the success or failure of our efforts to acquire, license or develop additional Product Candidates; • innovations or new products developed by us or our competitors; • announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments; • manufacturing, supply or distribution delays or shortages; • any changes to our relationship with any manufacturers, suppliers, licensors, future collaborators or other strategic partners; • achievement of expected product sales and profitability; • variations in our financial results or those of companies that are perceived to be similar to us; • market conditions in the biopharmaceutical sector and issuance of securities analysts’ reports or recommendations; • trading volume of our ADSs; • an inability to obtain additional funding; • sales of our securities by insiders and shareholders; • general economic, industry and market conditions other events or factors, many of which are beyond our control; • additions or departures of key personnel; • the changing global political environment and military actions and their effect on the economy and financial market; and • intellectual property, product liability or other litigation against us.
The market price for our ordinary shares may be influenced by those factors discussed in this “Risk Factors” section and many others, including: • political tensions between the U.S. and the PRC; • our ability to enroll subjects in our ongoing and planned clinical trials; • results (and interpretations of results) of our clinical trials and preclinical studies, and the results (and interpretations of results) of trials of our competitors or those of other companies in our market sector; • regulatory approval of our Product Candidates, or limitations to specific label indications or patient populations for its use, or changes or delays in the regulatory review process; • regulatory developments in the U.S., the PRC and foreign countries; 76 TABLE OF CONTENTS • changes in the structure of healthcare payment systems, especially in light of current reforms to the U.S. healthcare system; • the success or failure of our efforts to acquire, license or develop additional Product Candidates; • innovations or new products developed by us or our competitors; • announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments; • manufacturing, supply or distribution delays or shortages; • any changes to our relationship with any manufacturers, suppliers, licensors, future collaborators or other strategic partners; • achievement of expected product sales and profitability; • variations in our financial results or those of companies that are perceived to be similar to us; • market conditions in the biopharmaceutical sector and issuance of securities analysts’ reports or recommendations; • trading volume of our ordinary shares; • an inability to obtain additional funding; • sales of our securities by insiders and shareholders; • general economic, industry and market conditions other events or factors, many of which are beyond our control; • additions or departures of key personnel; • the changing global political environment and military actions and their effect on the economy and financial market; and • intellectual property, product liability or other litigation against us.
Compulsory standards for remuneration to creators or inventors of the patents they contribute to our business could be considerable. Under PRC laws, we are required to remunerate inventors or creators of patents they create for our business during the course of their employment.
Compulsory standards for remuneration to creators or inventors of the patents they contribute to our business could be considerable. Under PRC laws, for example, we are required to remunerate inventors or creators of patents they create for our business during the course of their employment.
Sales of a substantial number of our ADSs or ordinary shares in the public market or the perception that these sales might occur could significantly reduce the market price of our ADSs and impair our ability to raise adequate capital.
Sales of a substantial number of our ordinary shares in the public market or the perception that these sales might occur could significantly reduce the market price of our ordinary shares and impair our ability to raise adequate capital.
If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business and financial results, including, without limitation, the imposition of significant civil, criminal and administrative penalties, damages, monetary fines, disgorgements, possible exclusion from participation in Medicare, Medicaid and other healthcare programs, individual imprisonment, contractual damages, reputational harm, diminished profits and future earnings, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these 57 TABLE OF CONTENTS laws, and curtailment of our operations, any of which could adversely affect our ability to operate our business and our results of operations.
If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business and financial results, including, without limitation, the imposition of significant civil, criminal and administrative penalties, damages, monetary fines, disgorgements, possible exclusion from participation in Medicare, Medicaid and other healthcare programs, individual imprisonment, contractual damages, reputational harm, diminished profits and future earnings, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, and curtailment of our operations, any of which could adversely affect our ability to operate our business and our results of operations.
As the regulatory guidance and enforcement landscape in relation to data transfers continue to develop, we could suffer additional costs, complaints and/or regulatory investigations or fines; we may have to stop using certain tools and vendors and make other operational changes; we may have to implement alternative transfer mechanisms under the GDPR and/or take additional compliance and operational measures; and/or it could otherwise affect the manner in which we provide our services, and could adversely affect our business, operations and financial condition.
As the regulatory guidance and enforcement landscape in relation to data transfers continue to develop, we could suffer additional costs, complaints and/or regulatory investigations or fines; we may have to stop using certain tools and vendors and make other operational changes; we may have to implement alternative transfer mechanisms and/or take additional compliance and operational measures; and/or it could otherwise affect the manner in which we provide our services, and could adversely affect our business, operations and financial condition.
In addition, under the New Filing Rules, an issuer listed outside the PRC will be subject to the following obligations of filing or report: (i) if the issuer issues securities (excluding the securities issued for the purpose of implementing equity incentive, distribution of stock dividends, share split, etc.) in the same stock exchange outside the PRC, or such issuer issues convertible bonds, exchangeable bonds or preferred shares after its issuance and listing outside the PRC, it shall make a filing with the CSRC within three (3) business days upon the completion of such issuance; (ii) if the issuer seeks for the secondary listing or primary listing in any other stock exchange outside the PRC after its issuance and listing outside the PRC, it shall make a filing with the CSRC within three (3) business days after submitting the application 87 TABLE OF CONTENTS documents for issuance and listing outside the PRC; (iii) if the issuer issues the securities in installments within the scope of authorization after its issuance and listing outside the PRC, it shall make a filing with the CSRC within three (3) business days after the completion of its first issuance and state the total amount of the securities to be issued.
In addition, under the New Filing Rules, an issuer listed outside the PRC will be subject to the following obligations of filing or report: (i) if the issuer issues securities (excluding the securities issued for the purpose of implementing equity incentive, distribution of stock dividends, share split, etc.) in the same stock exchange outside the PRC, or such issuer issues convertible bonds, exchangeable bonds or preferred shares after its issuance and listing outside the PRC, it shall make a filing with the CSRC within three (3) business days upon the completion of such issuance; (ii) if the issuer seeks for the secondary listing or primary listing in any other stock exchange outside the PRC after its issuance and listing outside the PRC, it shall make a filing with the CSRC within three (3) business days after submitting the application documents for issuance and listing outside the PRC; (iii) if the issuer issues the securities in installments within the scope of authorization after its issuance and listing outside the PRC, it shall make a filing with the CSRC within three (3) business days after the completion of its first issuance and state the total amount of the securities to be issued.
These exemptions include: • not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002; • not being required to comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis); • not being required to submit some executive compensation matters to shareholder advisory votes, such as “say-on-pay,” “say-on-frequency” and “say-on-golden parachutes;” and 75 TABLE OF CONTENTS • not being required to disclose some executive compensation related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer’s compensation to median employee compensation.
These exemptions include: • not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002; • not being required to comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis); • not being required to submit some executive compensation matters to shareholder advisory votes, such as “say-on-pay,” “say-on-frequency” and “say-on-golden parachutes;” and • not being required to disclose some executive compensation related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer’s compensation to median employee compensation.
Patient enrollment also depends on many other factors, including: • the size and nature of the patient population; • the severity of the disease under investigation; • eligibility criteria for the trial; 29 TABLE OF CONTENTS • the proximity of patients to clinical sites; • the design of the clinical protocol; • the ability to obtain and maintain patient consents; • the ability to recruit clinical trial investigators with the appropriate competencies and experience; • the risk that patients enrolled in clinical trials will drop out of the trials before the administration of our Product Candidates or trial completion; • the availability of competing clinical trials; • the availability of new drugs approved or drug candidates under investigation for the indication the clinical trial is investigating; and • clinicians’ and patients’ perceptions as to the potential risks and advantages of the drug being studied in relation to other available therapies.
Patient enrollment also depends on many other factors, including: • the size and nature of the patient population; • the severity of the disease under investigation; • eligibility criteria for the trial; • the proximity of patients to clinical sites; • the design of the clinical protocol; • the ability to obtain and maintain patient consents; • the ability to recruit clinical trial investigators with the appropriate competencies and experience; • the risk that patients enrolled in clinical trials will drop out of the trials before the administration of our Product Candidates or trial completion; • the availability of competing clinical trials; • the availability of new drugs approved or drug candidates under investigation for the indication the clinical trial is investigating; and • clinicians’ and patients’ perceptions as to the potential risks and advantages of the drug being studied in relation to other available therapies.
Liability is potentially significant in the healthcare industry because the statute provides for treble damages and significant mandatory penalties per false or fraudulent claim or statement for violations; • HIPAA, as amended by HITECH, and their respective implementing regulations, which impose criminal and civil liability for, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement, in connection with the delivery of, or payment for, healthcare benefits, items or services.
Liability is potentially significant in the healthcare industry because the statute provides for treble damages and significant mandatory penalties per false or fraudulent claim or statement for violations; 53 TABLE OF CONTENTS • HIPAA, as amended by HITECH, and their respective implementing regulations, which impose criminal and civil liability for, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement, in connection with the delivery of, or payment for, healthcare benefits, items or services.
Foreign Corrupt Practices Act of 1977, as amended, and other applicable rules and regulations; • the potential for so-called parallel importing, which is what happens when a local seller, faced with high or higher local prices, opts to import goods from an international market with low or lower prices rather than buying them locally; • production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; • the illegal importation of competing products from countries where government price controls or other market dynamics result in lower prices; and • business interruptions resulting from geopolitical actions, including war and terrorism, natural disasters, including earthquakes, typhoons, floods and fires, or public health epidemics.
Foreign Corrupt Practices Act of 1977, as amended, and other applicable rules and regulations; • the potential for so-called parallel importing, which is what happens when a local seller, faced with high or higher local prices, opts to import goods from an international market with low or lower prices rather than buying them locally; 48 TABLE OF CONTENTS • production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; • the illegal importation of competing products from countries where government price controls or other market dynamics result in lower prices; and • business interruptions resulting from geopolitical actions, including war and terrorism, natural disasters, including earthquakes, typhoons, floods and fires, or public health epidemics or pandemics.
Our clinical development costs for our Product Candidates are highly uncertain and may vary significantly based on factors such as: • per patient trial costs; 48 TABLE OF CONTENTS • the number of trials required for approval; • the number of sites included in the trials; • the countries in which the trials are conducted; • the length of time required to enroll eligible patients; • the number of patients that participate in the trials; • the drop-out or discontinuation rates of patients; • potential additional safety monitoring requested by regulatory agencies; • the duration of patient participation in the trials and follow-up; • the cost and timing of manufacturing our Product Candidates; • the phase of development of our Product Candidates; and • the efficacy and safety profile of our Product Candidates.
Our clinical development costs for our Product Candidates are highly uncertain and may vary significantly based on factors such as: • per patient trial costs; • the number of trials required for approval; • the number of sites included in the trials; • the countries in which the trials are conducted; • the length of time required to enroll eligible patients; • the number of patients that participate in the trials; • the drop-out or discontinuation rates of patients; • potential additional safety monitoring requested by regulatory agencies; • the duration of patient participation in the trials and follow-up; • the cost and timing of manufacturing our Product Candidates; • the phase of development of our Product Candidates; and • the efficacy and safety profile of our Product Candidates.
If such an event were to occur again and cause interruptions in our operations or result in the unauthorized use, disclosure of or access to Confidential Information, it could result in a material disruption of our development programs and our business operations, whether due to a loss of our trade secrets or other similar disruptions cause us to breach our contractual obligations, subject us to mandatory corrective action, and otherwise subject us to liability under laws, regulations and 56 TABLE OF CONTENTS contracts that protect the privacy and security of Confidential Information, which could result in significant legal and financial exposure and reputational damages.
If such an event were to occur again and cause interruptions in our operations or result in the unauthorized use, disclosure of or access to Confidential Information, it could result in a material disruption of our development programs and our business operations, whether due to a loss of our trade secrets or other similar disruptions cause us to breach our contractual obligations, subject us to mandatory corrective action, and otherwise subject us to liability under laws, regulations and contracts that protect the privacy and security of Confidential Information, which could result in significant legal and financial exposure and reputational damages.
Changes in U.S. patent law, PRC patent law or patent laws in other countries could diminish the value of patents in general, thereby impairing our ability to protect our current and any future Product Candidates. 67 TABLE OF CONTENTS Obtaining and enforcing patents in the biopharmaceutical industry involve a high degree of technological and legal complexity.
Changes in U.S. patent law, PRC patent law or patent laws in other countries could diminish the value of patents in general, thereby impairing our ability to protect our current and any future Product Candidates. 71 TABLE OF CONTENTS Obtaining and enforcing patents in the biopharmaceutical industry involve a high degree of technological and legal complexity.
Although we have taken steps to protect our trade secrets and 69 TABLE OF CONTENTS unpatented know-how, including entering into confidentiality agreements with third parties, and confidential information and inventions agreements with employees, consultants, CROs and advisors, we cannot provide any assurances that we have entered into such agreements with each party that may have or have had access to our trade secrets or proprietary information and that all such agreements have been duly executed, and any of these parties may breach the agreements and disclose or use our proprietary information, including our trade secrets, and we may not be able to obtain adequate remedies for such breaches.
Although we have taken steps to protect our trade secrets and unpatented know-how, including entering into confidentiality agreements with third parties, and confidential information and inventions agreements with employees, consultants, CROs and advisors, we cannot provide any assurances that we have entered into such agreements with each party that may have or have had access to our trade secrets or proprietary information and that all such agreements have been duly executed, and any of these parties may breach the agreements and disclose or use our proprietary information, including our trade secrets, and we may not be able to obtain adequate remedies for such breaches.
Regardless of the merits or eventual outcome, liability claims may result in: • decreased demand for our products; • injury to our reputation and significant negative media attention; • difficulty attracting or withdrawal of clinical trial participants; • costs to defend the related litigation; • a diversion of management’s time and our resources; • substantial monetary awards to trial participants, patients or other claimants; • product recalls, withdrawals or labeling, marketing or promotional restrictions; • significant negative financial impact; • the inability to commercialize our Product Candidates; and • a decline in our ADS price.
Regardless of the merits or eventual outcome, liability claims may result in: • decreased demand for our products; • injury to our reputation and significant negative media attention; • difficulty attracting or withdrawal of clinical trial participants; • costs to defend the related litigation; • a diversion of management’s time and our resources; • substantial monetary awards to trial participants, patients or other claimants; • product recalls, withdrawals or labeling, marketing or promotional restrictions; • significant negative financial impact; • the inability to commercialize our Product Candidates; and • a decline in our ordinary share price.
Moreover, we may be subject to a third-party submission of prior art to the USPTO challenging the priority of an invention claimed within one of our patents or patent 61 TABLE OF CONTENTS applications (which submissions may be made prior to a patent’s issuance) or otherwise become involved in pre- and post-issuance proceedings, including opposition, derivation, re-examination, revocation, inter partes review, post-grant review, interference or other proceedings challenging our patent rights or the patent rights of others from whom we have obtained licenses to such rights.
Moreover, we may be subject to a third-party submission of prior art to the USPTO challenging the priority of an invention claimed within one of our patents or patent applications (which submissions may be made prior to a patent’s issuance) or otherwise become involved in pre- and post-issuance proceedings, including opposition, derivation, re-examination, revocation, inter partes review, post-grant review, interference or other proceedings challenging our patent rights or the patent rights of others from whom we have obtained licenses to such rights.
If we are unable to conclude that our internal control over financial reporting is effective, or if our independent registered public accounting firm determines we have a material weakness or significant deficiency in our internal control over financial reporting once that firm begin its Section 404 reviews, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our ADSs could decline, and we could be subject to sanctions or investigations by Nasdaq, the SEC or other regulatory authorities.
If we are unable to conclude that our internal control over financial reporting is effective, or if our independent registered public accounting firm determines we have a material weakness or significant deficiency in our internal control over financial reporting once that firm begin its Section 404 reviews, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our ordinary shares could decline, and we could be subject to sanctions or investigations by Nasdaq, the SEC or other regulatory authorities.
If the CSRC or any other PRC regulatory body determines that we need to obtain the CSRC’s approval for follow-on offerings or if the CSRC or any other PRC government authorities promulgates any interpretation or implements rules that would require us to obtain CSRC or other governmental approvals for follow-on offerings, we may be unable to obtain such approvals on a timely basis or at all and we may face adverse actions or sanctions by the CSRC or other PRC regulatory agencies if we proceed with an offering of our securities without first receiving any required approvals.
If the CSRC or any 91 TABLE OF CONTENTS other PRC regulatory body determines that we need to obtain the CSRC’s approval for follow-on offerings or if the CSRC or any other PRC government authorities promulgates any interpretation or implements rules that would require us to obtain CSRC or other governmental approvals for follow-on offerings, we may be unable to obtain such approvals on a timely basis or at all and we may face adverse actions or sanctions by the CSRC or other PRC regulatory agencies if we proceed with an offering of our securities without first receiving any required approvals.
Any future transactions could increase our near and long-term expenditures, result in potentially dilutive issuances of our equity securities, including our ADSs, or the incurrence of debt, contingent liabilities, amortization expenses or acquired in-process research and development expenses, any of which could affect our financial condition, liquidity and results of operations.
Any future transactions could increase our near and long-term expenditures, result in potentially dilutive issuances of our equity securities, or the incurrence of debt, contingent liabilities, amortization expenses or acquired in-process research and development expenses, any of which could affect our financial condition, liquidity and results of operations.
Intellectual property rights do not necessarily address all potential threats. 71 TABLE OF CONTENTS The degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations and may not adequately protect our business or permit us to maintain our competitive advantage.
Intellectual property rights do not necessarily address all potential threats. 75 TABLE OF CONTENTS The degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations and may not adequately protect our business or permit us to maintain our competitive advantage.
It will permit EU member states to use common HTA tools, methodologies, and procedures across the EU, working together in four main areas, including joint clinical assessment of the innovative health technologies with the highest potential impact for patients, joint scientific consultations whereby developers can seek advice from HTA authorities, identification of emerging health technologies to identify promising technologies early, and continuing voluntary 54 TABLE OF CONTENTS cooperation in other areas.
It will permit EU member states to use common HTA tools, methodologies, and procedures across the EU, working together in four main areas, including joint clinical assessment of the innovative health technologies with the highest potential impact for patients, joint scientific consultations whereby developers can seek advice from HTA authorities, identification of emerging health technologies to identify promising technologies early, and continuing voluntary cooperation in other areas.
We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as our voting and non-voting ordinary shares held by non-affiliates is less than $250 million measured on the last business day of our second fiscal quarter, or our annual revenue is less than $100 million during the most recently completed fiscal year and our voting and non-voting ordinary shares held by non-affiliates is less than $700 million measured on the last business day of our second fiscal quarter.
We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as our voting and non-voting ordinary shares held by non-affiliates is less than $250 million measured on the last business day of our second fiscal quarter, or our annual revenue is less than $100 million during the most recently 79 TABLE OF CONTENTS completed fiscal year and our voting and non-voting ordinary shares held by non-affiliates is less than $700 million measured on the last business day of our second fiscal quarter.
For example, our Board has the authority, without further action by our shareholders, to issue preferred shares in one or more series and to fix their designations, powers, preferences, privileges, and relative participating, optional or special rights and the qualifications, limitations or restrictions, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences, any or all of which may be greater than the rights associated with our ordinary shares, in the form of ADS or otherwise.
For example, our Board has the authority, without further action by our shareholders, to issue preferred shares in one or more series and to fix their designations, powers, preferences, privileges, and relative participating, optional or special rights and the qualifications, limitations or restrictions, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences, any or all of which may be greater than the rights associated with our ordinary shares.
The UK Extension to the DPF followed in October 2023, as an effective UK GDPR data transfer mechanism to U.S. entities self-certified under the UK Extension to the DPF. We expect the existing legal complexity and uncertainty regarding international personal information transfers to continue under the UK GDPR and EU GDPR.
The UK Extension to the DPF followed in October 2023, as an effective UK GDPR data transfer mechanism to U.S. entities self-certified under the UK Extension to the DPF. We expect the existing legal complexity and uncertainty regarding international personal data transfers to continue under the UK GDPR and EU GDPR. Further, the U.S.
Geopolitical risk, fluctuations in supply and demand, fluctuations in interest rates, fluctuations in exchange rates, and other economic and political factors have created and may continue to create pricing pressure for raw materials and other inputs. These inflationary pressures could, in turn, negatively impact our operation and business.
Geopolitical risk, fluctuations in supply and demand, fluctuations in interest rates, fluctuations in exchange rates, fluctuations in tariffs, and other economic and political factors have created and may continue to create pricing pressure for raw materials and other inputs. These economic pressures could, in turn, negatively impact our operation and business.
In addition, we may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations. These current or future laws and regulations may impair our research and development. Failure to comply with these laws and regulations also may result in substantial fines, penalties or other sanctions. 98 TABLE OF CONTENTS
In addition, we may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations. These current or future laws and regulations may impair our research and development. Failure to comply with these laws and regulations also may result in substantial fines, penalties or other sanctions. 100 TABLE OF CONTENTS
Although our management team has experience doing so, as a company we have no prior experience in the marketing, sale and distribution of biopharmaceutical products and there are significant risks involved in building and managing a sales organization, including our ability to hire, retain and incentivize qualified individuals, generate sufficient sales leads, provide adequate training to sales and marketing personnel and effectively manage a geographically dispersed sales and marketing team.
Although our management team has experience doing so, as a company we have no prior experience in the marketing, sale and distribution of biopharmaceutical products and there are significant risks involved in building and managing a sales organization, 47 TABLE OF CONTENTS including our ability to hire, retain and incentivize qualified individuals, generate sufficient sales leads, provide adequate training to sales and marketing personnel and effectively manage a geographically dispersed sales and marketing team.
If we are deemed a PRC resident enterprise, dividends paid on our ordinary shares or ADSs, and any gain realized from the transfer of our ordinary shares or ADSs, would be treated as income derived from sources within the PRC and would as a result be subject to PRC taxation.
If we are deemed a PRC resident enterprise, dividends paid on our ordinary shares, and any gain realized from the transfer of our ordinary shares, would be treated as income derived from sources within the PRC and would as a result be subject to PRC taxation.
Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. 44 TABLE OF CONTENTS We expect to face competition from existing products and products in development for each of our Product Candidates as described in the section titled “Business—Competition” elsewhere in this Annual Report on Form 10-K.
Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. We expect to face competition from existing products and products in development for each of our Product Candidates as described in the section titled “Business—Competition” elsewhere in this Annual Report on Form 10-K.
In addition, as PRC governmental authorities have a certain degree of discretion in interpreting and implementing statutory provisions, we cannot assure the investors that we are not required to obtain such approval or pass such review under PRC laws, regulations or policies if the relevant 89 TABLE OF CONTENTS PRC governmental authorities take a contrary position, nor can we predict whether or how long it will take to obtain such approval or pass such review.
In addition, as PRC governmental authorities have a certain degree of discretion in interpreting and implementing statutory provisions, we cannot assure the investors that we are not required to obtain such approval or pass such review under PRC laws, regulations or policies if the relevant PRC governmental authorities take a contrary position, nor can we predict whether or how long it will take to obtain such approval or pass such review.
ITEM 1A. RISK FACTORS Investors should carefully consider the risks and uncertainties described below and the other information in this Annual Report on Form 10-K, including our consolidated financial statements and related notes appearing elsewhere herein including the section titled “Operating and Financial Review and Prospects,” before deciding whether to invest or maintain any investment in our ADSs.
ITEM 1A. RISK FACTORS Investors should carefully consider the risks and uncertainties described below and the other information in this Annual Report on Form 10-K, including our consolidated financial statements and related notes appearing elsewhere herein including the section titled “Operating and Financial Review and Prospects,” before deciding whether to invest or maintain any investment in our ordinary shares.
These products may compete with our current or any future Product Candidates, and our patents, the patents of our future licensors or other intellectual property rights may not be effective or sufficient to prevent them from competing. 68 TABLE OF CONTENTS Additionally, some countries have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties.
These products may compete with our current or any future Product Candidates, and our patents, the patents of our future licensors or other intellectual property rights may not be effective or sufficient to prevent them from competing. Additionally, some countries have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties.
Any similar scrutiny of us, regardless of its lack of merit, could result in a diversion of management resources and energy, potential costs to defend ourselves against rumors or litigation, decreases and volatility in our ADS trading price, and increased directors and officers insurance premiums, and could have a material adverse effect upon our business, results of operations and financial condition.
Any similar scrutiny of us, regardless of its lack of merit, could result in a diversion of management resources and energy, potential costs to defend ourselves against rumors or litigation, decreases and volatility in our ordinary share trading price, and increased directors and officers insurance premiums, and could have a material adverse effect upon our business, results of operations and financial condition.
The trading price of our ADSs has been and may continue to be volatile. The stock market in general and the market for shares of biopharmaceutical companies in particular have experienced extreme volatility that has often been unrelated to the operating performance of particular companies.
The trading price of our ordinary shares has been and may continue to be volatile. The stock market in general and the market for shares of biopharmaceutical companies in particular have experienced extreme volatility that has often been unrelated to the operating performance of particular companies.
Any gain realized on the transfer of ADSs or ordinary shares by such investors is also subject to PRC tax at a current rate of 10%, if such gain is regarded as income derived from sources within the PRC.
Any gain realized on the transfer of ordinary shares by such investors is also subject to PRC tax at a current rate of 10%, if such gain is regarded as income derived from sources within the PRC.
Noncompliance events that could result in abandonment or lapse of patent rights include, but are not limited to, failure to timely file national and regional stage patent applications based on an international patent application, failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal documents within prescribed time limits.
Noncompliance events that could result in abandonment or lapse of patent rights include, but are not limited to, failure to timely file national and regional stage patent applications based on an international patent application, failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit 67 TABLE OF CONTENTS formal documents within prescribed time limits.
Governmental control of currency conversion may limit our ability to remit funds out of the PRC and utilize our capital or future revenues effectively and could affect the value of any investment in our ADSs. As a holding company, we are dependent upon cash dividends, distributions and other transfers from our subsidiaries to make dividend payments.
Governmental control of currency conversion may limit our ability to remit funds out of the PRC and utilize our capital or future revenues effectively and could affect the value of any investment in our ordinary shares. As a holding company, we are dependent upon cash dividends, distributions and other transfers from our subsidiaries to make dividend payments.
Companies operating in the PRC are required to participate in various government sponsored employee benefit plans, including social insurance, housing funds and other welfare-oriented payment obligations, and contribute to the plans in amounts equal to specific percentages of salaries, including bonuses and allowances, of their employees up to a maximum amount specified by the local government from time to time.
Companies operating in the PRC are required to participate in various government sponsored employee benefit plans, including social insurance, housing funds and other welfare-oriented payment obligations, and contribute to the 96 TABLE OF CONTENTS plans in amounts equal to specific percentages of salaries, including bonuses and allowances, of their employees up to a maximum amount specified by the local government from time to time.
Additionally, if one or more of our Product Candidates receives marketing approval and we or others later identify undesirable side effects or adverse events caused by such products, a number of potentially significant negative consequences could result, including but not limited to: • regulatory authorities may suspend, limit or withdraw approvals of such product, or seek an injunction against its manufacture or distribution; 30 TABLE OF CONTENTS • regulatory authorities may require additional warnings on the label, including “boxed” warnings, or issue safety alerts, Dear Healthcare Provider letters, press releases or other communications containing warnings or other safety information about the product; • we may be required to change the way the product is administered or conduct additional clinical trials or post-approval studies; • we may be required to create a REMS which could include a medication guide outlining the risks of such side effects for distribution to patients; • we may be subject to fines, injunctions or the imposition of administrative or criminal penalties; • we could be sued and held liable for harm caused to patients; and • our reputation may suffer.
Additionally, if one or more of our Product Candidates receives marketing approval and we or others later identify undesirable side effects or adverse events caused by such products, a number of potentially significant negative consequences could result, including but not limited to: • regulatory authorities may suspend, limit or withdraw approvals of such product, or seek an injunction against its manufacture or distribution; • regulatory authorities may require additional warnings on the label, including “boxed” warnings, or issue safety alerts, DHCP letters, press releases or other communications containing warnings or other safety information about the product; • we may be required to change the way the product is administered or conduct additional clinical trials or post-approval studies; • we may be required to create a REMS which could include a medication guide outlining the risks of such side effects for distribution to patients; • we may be subject to fines, injunctions or the imposition of administrative or criminal penalties; • we could be sued and held liable for harm caused to patients; and • our reputation may suffer.
Because patent applications can take many years to issue and may be confidential for 18 months or more after filing, and 64 TABLE OF CONTENTS because pending patent claims can be revised before issuance, there may be currently pending patent applications—including ones we are unaware of—that may later result in issued patents that our current and future Product Candidates may infringe.
Because patent applications can take many years to issue and may be confidential for 18 months or more after filing, and because pending patent claims can be revised before issuance, there may be currently pending patent applications—including ones we are unaware of—that may later result in issued patents that our current and future Product Candidates may infringe.
Based on the value of our assets, including goodwill, and the composition of our income and assets, we do not believe we were a PFIC for U.S. federal income tax purposes for our taxable year ended December 31, 2024.
Based on the value of our assets, including goodwill, and the composition of our income and assets, we do not believe we were a PFIC for U.S. federal income tax purposes for our taxable year ended December 31, 2025.
If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, we could lose visibility in the financial markets, which, in turn, could cause the market price or trading volume for our ADSs to decline significantly. The increasing use of social media platforms presents new risks and challenges.
If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, we could lose visibility in the financial markets, which, in turn, could cause the market price or trading volume for our ordinary shares to decline significantly. The increasing use of social media platforms presents new risks and challenges.
Although we do not have a VIE structure, due to our operations in the PRC, any future PRC, U.S. or other rules and regulations that place restrictions on capital raising or other activities or require enhanced disclosure by PRC-based companies could adversely affect our business and results of operations and the market price of our ADSs.
Although we do not have a VIE structure, due to our operations in the PRC, any future PRC, U.S. or other rules and regulations that place restrictions on capital raising or other activities or require enhanced disclosure by PRC-based companies could adversely affect our business and results of operations and the market price of our ordinary shares.
In addition, third parties may obtain patents in the future and claim that use of our technologies infringes upon these patents. Even if we believe that such claims are without merit, there is no assurance that a court would find in our favor on questions of infringement, validity, enforceability, or priority.
In addition, third parties may obtain patents in the future and claim that use of our technologies infringes upon these patents. 68 TABLE OF CONTENTS Even if we believe that such claims are without merit, there is no assurance that a court would find in our favor on questions of infringement, validity, enforceability, or priority.
This concentration of ownership may have the effect of delaying, deferring or preventing a change in 74 TABLE OF CONTENTS control, impeding a merger, consolidation, takeover or other business combination involving us, or discouraging a potential acquiror from making a tender offer or otherwise attempting to obtain control of our business, even if such a transaction would benefit other shareholders.
This concentration of ownership may have the effect of delaying, deferring or preventing a change in control, impeding a merger, consolidation, takeover or other business combination involving us, or discouraging a potential acquiror from making a tender offer or otherwise attempting to obtain control of our business, even if such a transaction would benefit other shareholders.
Circular 37 further requires amendment to the SAFE registrations in the event of any changes with respect to the basic information of the offshore special purpose vehicle, such as change of a PRC individual shareholder, name and operation term, or any significant changes with respect to the offshore special purpose vehicle, such as increase or decrease of capital contribution, share transfer or exchange, or mergers or divisions.
Circular 37 further requires amendment to the SAFE registrations in the event of any changes with respect to the basic information of the offshore special purpose vehicle, such as change of a PRC individual shareholder, name and operation term, or any significant changes with respect to the offshore special purpose vehicle, such as increase or decrease of capital contribution, share 93 TABLE OF CONTENTS transfer or exchange, or mergers or divisions.
We do not have a disaster recovery or business continuity plan in place and may incur substantial expenses as a result of the absence or limited nature of our internal or third-party service provider disaster recovery and business continuity plans, which, particularly when taken together with our lack of earthquake insurance, could have a material adverse effect on our business.
Although we have a disaster recovery and business continuity plan in place, we may incur substantial expenses as a result of the limited nature of our internal plan or the absence or limited nature of our third-party service provider disaster recovery and business continuity plans, which, particularly when taken together with our lack of earthquake insurance, could have a material adverse effect on our business.
If the current equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult, more costly and more dilutive. Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our business, financial condition and results of operations and the price of our ADSs.
If the current equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult, more costly and more dilutive. Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our business, financial condition and results of operations and the price of our ordinary shares.
Although we do not have a VIE structure, due to our operations in the PRC, any future PRC, U.S. or other rules and regulations that place restrictions on capital raising or other activities or require enhanced disclosure by PRC-based companies could adversely affect our business and results of operations.
Although we do not have a VIE structure, due to our operations in the PRC, any future PRC, U.S. or other rules and regulations that place restrictions on capital raising or other activities or require enhanced disclosure by PRC-based companies could adversely affect our business and results of 84 TABLE OF CONTENTS operations.
All jurisdictions in which we intend to conduct our clinical drug development activities regulate these activities in great depth and detail. We intend to focus our activities on major markets, including the U.S. and the PRC.
All jurisdictions in which we intend to conduct our clinical drug development activities regulate these activities in great depth and detail. We intend to focus our activities on major markets, including the U.S., Australia, Europe and the PRC.
Disruptions at the FDA, the NMPA, comparable foreign regulatory authorities, and other government agencies caused by shifting governmental policies and priorities, reductions in the federal workforce, funding shortages or global health concerns could hinder their ability to hire, retain or deploy key leadership and other personnel, or otherwise prevent new or modified products from being developed, approved or commercialized in a timely manner or at all, which could negatively impact our business.
Disruptions at the FDA, the NMPA, comparable foreign regulatory authorities, and other government agencies caused by shifting governmental policies and priorities, reductions or changes in the federal workforce or funding shortages could hinder their ability to hire, retain or deploy key leadership and other personnel, or otherwise prevent new or modified products from being developed, approved or commercialized in a timely manner or at all, which could negatively impact our business.
If we are not able to attract, integrate, retain and motivate necessary personnel to accomplish our business objectives, we may experience constraints that will significantly impede the achievement of our development objectives, our ability to raise additional capital and our ability to implement our business strategy. 47 TABLE OF CONTENTS We may encounter difficulties in managing our growth and expanding our operations successfully.
If we are not able to attract, integrate, retain and motivate necessary personnel to accomplish our business objectives, we may experience constraints that will significantly impede the achievement of our development objectives, our ability to raise additional capital and our ability to implement our business strategy. We may encounter difficulties in managing our growth and expanding our operations successfully.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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The Audit Committee reports to the full Board regarding its activities, including those related to cybersecurity. The full Board also receives briefings from management on our cyber risk management program. Board members receive presentations on cybersecurity topics from internal staff as part of the Board’s continuing education on topics that impact public companies.
The Audit Committee reports to the full Board regarding its activities, including those related to cybersecurity. The full Board also periodically receives briefings from management on our cyber risk management program. Board members receive presentations on cybersecurity topics from internal staff as part of the Board’s continuing education on topics that impact public companies.
ITEM 1C. CYBERSECURITY Our Board of Directors (the “Board”) and management recognize the importance of maintaining the trust and confidence of our clinical trial participants, investors, business partners and employees. The Board and the Audit Committee of the Board (the “Audit Committee”) are actively involved in oversight of our cybersecurity program as part of our approach to risk management.
ITEM 1C. CYBERSECURITY Our Board of Directors (the “Board”) and management recognize the importance of maintaining the trust and confidence of our clinical trial participants, investors, business partners and employees. The Board and the Audit Committee of the Board (the “Audit Committee”) are involved in oversight of our cybersecurity program as part of our approach to risk management.
Our cybersecurity risk management program is integrated into our overall enterprise risk management program, and shares common methodologies, reporting channels and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational, and financial risk areas.
Our cybersecurity risk management program is integrated into our overall risk management program, and shares common methodologies, reporting channels and governance processes that apply across the risk management program to other legal, compliance, strategic, operational, and financial risk areas.
Risk Management and Strategy We design and assess our program based on the National Institute of Standards and Technology’s Cybersecurity Framework (“NIST CSF”). This does not imply that we meet any particular technical standards, specifications, or requirements, only that we use the NIST CSF as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business.
Risk Management and Strategy We design and assess our program based on the National Institute of Standards and Technology Cybersecurity Framework (“NIST CSF”). This does not imply that we meet any particular technical standards, specifications, or requirements, only that we use the NIST CSF as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business.
We have not identified risks from known cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition. We did not experience any material IT security incidents during the fiscal year.
We have not identified risks from known cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected us, including our operations, business strategy, results of operations, or financial condition. We did not experience any material IT security incidents during the fiscal year.
Our management team supervises efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel, threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us, and alerts and reports produced by security tools deployed in the IT environment.
Our management team takes steps to stay informed about and monitor efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel, threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us, and alerts and reports produced by security tools deployed in our IT environment. 102 TABLE OF CONTENTS
In general, we seek to address cybersecurity risks through a comprehensive, coordinated approach that is focused on preserving the confidentiality, integrity, security, and availability of our critical systems and the information that we create through our business operations by identifying, preventing, and mitigating cybersecurity threats and effectively responding to cybersecurity incidents when they occur.
In general, we seek to address cybersecurity risks through a comprehensive cybersecurity risk management program intended to protect the confidentiality, integrity, security and availability of our critical systems and the information that we create through our business operations by identifying, preventing, and mitigating cybersecurity threats and effectively responding to cybersecurity incidents when they occur.
Key elements of our cybersecurity risk management program include, but are not limited to, the following: • A cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; • The utilization of Microsoft 365 services for email, data storage, Identity Provider (“IdP”) for Single Sign-On (“SSO”), and other technical controls such as remote user and device management; • Microsoft 365 configurations which are aligned with security and industrial standards, including automatic risk management mechanisms and alert notifications for our Information Technology (“IT”) team; • A zero trust approach to cybersecurity focused on preventing and limiting damage in the event that a malicious actor gains access to our network and operating on the principle “never trust, always verify,” continuously authenticating and authorizing users and devices that seek to obtain access to our systems and data; • Privileged access management protocols that require user access requests to receive formal, documented approvals with specific business justifications and, following receipt of such approvals, the provision of only the minimum access necessary for the approved purpose; • Regular monitoring of our Microsoft security score, which serves as a benchmark for our security posture and guides our continuous improvement efforts; • Risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise IT environment, including annual external assessments and vulnerability scanning; • A security team principally responsible for managing our cybersecurity risk assessment processes, our security controls, and our response to cybersecurity incidents; • Regular security awareness training sessions for users, including simulated phishing email campaigns managed by KnowBe4, a third-party leader in security awareness training; • A disaster recovery program, including business continuity procedures in the event of a disaster, backup procedures, failover features with up-to-date SaaS services, and data recovery protocols; and • A third-party risk management (“TPRM”) process to safeguard against risks posed by service providers, suppliers and vendors, based on our assessment of their respective criticality to our operations and respective 99 TABLE OF CONTENTS risk profile, encompassing risk identification, due diligence and risk assessment prior to engagement, and categorization of third parties based on risk levels.
Key elements of our cybersecurity risk management program include, but are not limited to, the following: • A cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; • The utilization of Microsoft 365 services for email, data storage, Identity Provider for Single Sign-On, and other technical controls such as remote user and device management; • Mandatory multi-factor authentication (“MFA”) for all remote access and privileged accounts, and MFA or comparable controls for all user accounts; • Microsoft 365 configurations which are aligned with security and industrial standards, including automatic risk management mechanisms and alert notifications for our Information Technology (“IT”) team; • A zero trust approach to cybersecurity focused on preventing and limiting damage in the event that a malicious actor gains access to our network and operating on the principle “never trust, always verify,” continuously authenticating and authorizing users and devices that seek to obtain access to our systems and data; • Privileged access management protocols that require user access requests to receive formal, documented approvals with specific business justifications and, following receipt of such approvals, the provision of only the minimum access necessary for the approved purpose; • The utilization of Rapid7 Managed Detection and Response, Bitsight, Cynomi Governance, Risk and Compliance, Harmony Email & Collaboration, annual Microsoft 365 security assessments, vCISO services, and other related solutions, to continuously monitor and strengthen our security posture and proactively manage risk; • Continuous vulnerability scanning and remediation tracking, supplemented by annual third-party risk assessments and penetration testing; • Regular monitoring of our Microsoft security score, which serves as a benchmark for our security posture and guides our continuous improvement efforts; • Risk assessments designed to help identify material risks from cybersecurity threats to our critical systems and information; • A security team principally responsible for managing our cybersecurity risk assessment processes, our security controls, and our response to cybersecurity incidents; 101 TABLE OF CONTENTS • Regular security awareness training sessions for employees, including incident response personnel and senior management (such as simulated phishing email campaigns managed by KnowBe4, a third-party leader in security awareness training); • A disaster recovery program, including business continuity procedures in the event of a disaster, backup procedures, failover features with up-to-date SaaS services, and data recovery protocols; and • A third-party risk management process to safeguard against risks posed by key service providers, based on our assessment of their respective criticality to our operations and respective risk profile, encompassing risk identification, due diligence and risk assessment prior to engagement, categorization of third parties based on risk levels, and ongoing monitoring of critical third parties, including review of SOC 2 reports, cybersecurity insurance coverage and period reassessment; • Annual penetration testing conducted by a qualified third-party provider, with results reported to the Audit Committee; • Deployment of endpoint detection and response capabilities across workstations and servers with continuous 24/7 monitoring; and • Cybersecurity insurance coverage that we believe is appropriate for a clinical-stage biotechnology company of our size, stage and risk profile.
See “Risk Factors – Our IT Systems, or those of our CROs, CMOs, other contractors, vendors, consultants or collaborators, may fail or suffer system failures, security breaches or deficiencies in cybersecurity, which could results in a material disruption of our product development programs, compromise sensitive information related to our business or trigger contractual and legal obligations.
See “Risk Factors – Our IT Systems, or those of our CROs, CMOs, other contractors, vendors, consultants or collaborators, may fail or suffer system failures, security breaches or deficiencies in cybersecurity, which could results in a material disruption of our product development programs, compromise sensitive information related to our business or trigger contractual and legal obligations.” Cybersecurity Governance Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee oversight of cybersecurity risks, including management’s implementation of our cybersecurity risk management program.
Our Director of Information Technology, who reports to our principal financial officer, leads the operational oversight of Company-wide cybersecurity strategy, policy, standards, and processes and works across relevant departments to assess, manage, and help prepare us and our directors and employees to address, cybersecurity risks.
Our Director of Information Technology, who reports to our principal financial officer, leads the operational oversight of Company-wide cybersecurity risk management program, and works across relevant departments to assess, manage, and help prepare our directors, internal cybersecurity personnel and retained external cybersecurity consultants to address cybersecurity risks.
The Audit Committee receives periodic reports from management on our cybersecurity risks, and our IT team directly reports to the Audit Committee on a periodic basis. In addition, management is obligated to update the Audit Committee, as necessary, regarding any significant cybersecurity incidents, as well as any incidents with lesser impact potential.
The Audit Committee receives periodic reports from management on our cybersecurity risks, and our IT team directly reports to the Audit Committee on a periodic basis. In addition, management updates the Audit Committee, where appropriate, regarding any significant cybersecurity incidents it considers to be significant or potentially significant.
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Our cybersecurity policies, processes and practices are integrated into our operations and are based on recognized standards such as the National Institute of Standards and Technology Cybersecurity Framework.
Removed
Cybersecurity Governance Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee oversight of cybersecurity and other information technology risks. The Audit Committee oversees management’s implementation of our cybersecurity risk management program.

Item 2. Properties

Properties — owned and leased real estate

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We also have an operating lease for 25,476 square feet of laboratory and office space in Taicang, China, with a lease term that expires on April 30, 2026. In February 2025, we relocated our corporate headquarters to a new location in San Diego, California which includes 6,942 square feet of office space. This space is leased through January 2028.
ITEM 2. PROPERTIES. In February 2025, we relocated our corporate headquarters to a new location in San Diego, California. The associated operating lease is for 6,942 square feet of office space and expires on January 31, 2028.
We believe that our existing facilities are adequate to meet our current needs, and that suitable additional alternative space will be available in the future on commercially reasonable terms.
We also have an operating lease for 25,476 square feet of laboratory and office space in Taicang, China, with an initial lease term that expires on April 30, 2027. We believe that our existing facilities are adequate to meet our current needs, and that suitable additional alternative space will be available in the future on commercially reasonable terms.
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ITEM 2. PROPERTIES. As of December 31, 2024, we had an operating lease for 3,628 square feet of office space in San Diego, California, with a lease term that expires on April 30, 2025.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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ITEM 3. LEGAL PROCEEDINGS. From time to time, we may become involved in legal proceedings arising in the ordinary course of our business.
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ITEM 3. LEGAL PROCEEDINGS. From time to time, we may be a party to litigation or subject to claims in the ordinary course of business. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Information About Our ADSs Our ADSs are traded on The Nasdaq Global Market, under the symbol “CNTB.” Shareholders As of January 22, 2025, there were 1,331 holders of record of our ADSs.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Information About Our Ordinary Shares Our ordinary shares are traded on The Nasdaq Global Market, under the symbol “CNTB.” Shareholders As of February 28, 2026, there were 8 holders of record of our ordinary shares.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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To the extent that we raise additional capital through the sale of equity, ownership interests of existing holders of our ADSs and ordinary shares will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of holders of our ADSs or ordinary shares.
To the extent that we raise additional capital through the sale of equity, ownership interests of existing holders of our ordinary shares will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of holders of our ordinary shares.
Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, we may experience increases in the near future (especially if inflation rates remain high or begin to rise again) on our operating costs, including our labor costs and research and development costs, due to supply chain constraints, consequences associated with geopolitical conflicts such as the ongoing wars involving Ukraine and Israel, the impact of any tariffs imposed by or on the U.S. or other matters impacting global trade, shifting priorities and policies within the U.S. federal government, worsening global macroeconomic conditions, and employee availability and wage increases, which may result in additional stress on our working capital resources.
Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, we may experience increases in the near future (especially if inflation rates remain high or begin to rise again) on our operating costs, including our labor costs and research and development costs, due to supply chain constraints, consequences associated with geopolitical conflicts such as the ongoing war involving Ukraine, the impact of any tariffs imposed by or on the U.S. or other matters impacting global trade, shifting priorities and policies within the U.S. federal government, worsening global macroeconomic conditions, and employee availability and wage increases, which may result in additional stress on our working capital resources.
We utilize key assumptions that require judgement to determine the stand-alone selling price for each performance obligation identified in the agreement, which may include revenue forecasts, expected development timelines, discount rates, probabilities of technical and regulatory success and costs for manufacturing clinical supplies. To date, our estimates have not differed materially from actual values.
We utilize key assumptions that require judgment to determine the stand-alone selling price for each performance obligation identified in the agreement, which may include revenue forecasts, expected development timelines, discount rates, probabilities of technical and regulatory success and costs for manufacturing clinical supplies. To date, our estimates have not differed materially from actual values.
This section provides an analysis of our cash flows and a discussion of our outstanding commitments and contingencies that existed as of December 31, 2024. Included in this discussion is our financial capacity to fund our future commitments and a discussion of other financing arrangements.
This section provides an analysis of our cash flows and a discussion of our outstanding commitments and contingencies that existed as of December 31, 2025. Included in this discussion is our financial capacity to fund our future commitments and a discussion of other financing arrangements.
In addition, all of our significant accounting policies are summarized in Note 2 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K. • Results of operations.
In addition, all of our significant accounting policies are summarized in Note 3 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K. • Results of operations.
If we raise additional funds through collaboration agreements, strategic alliances, licensing arrangements, 106 TABLE OF CONTENTS monetization transactions, or marketing and distribution arrangements, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or Product Candidates or grant licenses on terms that may not be favorable to us or grant rights to develop and market products or Product Candidates that we would otherwise prefer to develop and market ourselves.
If we raise additional funds through collaboration agreements, strategic alliances, licensing arrangements, monetization transactions, or marketing and distribution arrangements, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or Product Candidates or grant licenses on terms that may not be favorable to us or grant rights to develop and market products or Product Candidates that we would otherwise prefer to develop and market ourselves.
This section provides a general description of our operating expenses, as well as an analysis of our results of operations presented in the accompanying consolidated statements of operations and comprehensive loss by comparing the results for the year ended December 31, 2024 to the results for the year ended December 31, 2023. • Liquidity and capital resources.
This section provides a description of our revenues and expenses, as well as an analysis of our results of operations presented in the accompanying consolidated statements of operations and comprehensive loss by comparing the results for the year ended December 31, 2025 to the results for the year ended December 31, 2024. • Liquidity and capital resources.
Other general and administrative expense includes professional fees for legal, investor relations, accounting and other general corporate purposes, facility costs and insurance not otherwise included in research and development expense. For the year ended December 31, 2024, general and administrative expense was $19.2 million, compared to $16.1 million for the same period in 2023.
Other general and administrative expense includes professional fees for legal, investor relations, accounting and other general corporate purposes, facility costs and insurance not otherwise included in research and development expense. For the year ended December 31, 2025, general and administrative expense was $20.3 million, compared to $19.2 million for the same period in 2024.
Historically, we have financed our operations, including technology and product research and development, primarily through sales of our ordinary shares and ADSs, including our IPO that we completed on March 23, 2021 for total cash consideration of $219.9 million before underwriting discounts and commissions, and, through up-front payments, research funding and milestone payments under collaborative arrangements.
Historically, we have financed our operations, including technology and product research and development, primarily through sales of our securities, including our IPO that we completed in March 2021 for total cash consideration of $219.9 million before underwriting discounts and commissions, and, through up-front payments, research funding and milestone payments under collaborative arrangements.
License and collaboration revenues for the year ended December 31, 2024 were $26.0 million for the upfront license fee, achievement of certain development milestones and cost reimbursements. There were no license and collaboration revenues for the year ended December 31, 2023. Research and Development Expense All costs of research and development are expensed in the period incurred.
License and collaboration revenues for the year ended December 31, 2024 were $26.0 million for the upfront license fee, achievement of certain development milestones and cost reimbursements. 106 TABLE OF CONTENTS Research and Development Expense All costs of research and development are expensed in the period incurred.
Our net cash used in investing activities for the year ended December 31, 2024 was $3.5 million, compared to net cash provided by investing activities of $75.0 million for the same period in 2023.
Our net cash provided by investing activities for the year ended December 31, 2025 was $9.8 million, compared to net cash used in investing activities of $3.5 million for the same period in 2024.
The decrease in cash provided by investing activities was primarily due to net purchases of short-term investments of $2.7 million for the year ended December 31, 2024, compared to net maturities of $72.1 million for the year ended December 31, 2023.
The increase in cash provided by investing activities was primarily due to net maturities of short-term investments of $10.3 million for the year ended December 31, 2025, compared to net purchases of $2.7 million for the year ended December 31, 2024.
Additionally, the general consensus among economists suggests that we should expect a higher recession risk to continue over the next year, which, together with the foregoing, could result in further economic uncertainty and volatility in the capital markets in the near term, and could negatively affect our operations. Furthermore, such economic conditions have produced downward pressure on share prices.
Additionally, the general consensus among economists suggests that we should expect a higher recession risk to continue over the next year, which, together with the foregoing, could result in further economic 109 TABLE OF CONTENTS uncertainty and volatility in the capital markets in the near term, and could negatively affect our operations.
Research and development expense consisted of the following (in thousands): December 31, 2024 2023 Rademikibart-related costs $ 16,304 $ 37,572 Other development related costs 460 4,018 Personnel costs and other expenses 9,541 8,920 Share-based compensation expense 2,951 2,492 Total research and development expense $ 29,256 $ 53,002 For the year ended December 31, 2024, research and development expense was $29.3 million, compared to $53.0 million for the same period in 2023.
Research and development expense consisted of the following (in thousands): December 31, 2025 2024 Rademikibart-related costs $ 25,411 $ 16,304 Other development related costs 86 460 Personnel costs and other expenses 11,202 9,541 Share-based compensation expense 1,099 2,951 Total research and development expense $ 37,798 $ 29,256 For the year ended December 31, 2025, research and development expense was $37.8 million, compared to $29.3 million for the same period in 2024.
At this time, due to the variability associated with clinical site agreements, contract research organization agreements and contract manufacturing agreements, we are unable to estimate with certainty the future costs we will incur. We intend to use our current financial resources to fund our obligations under these commitments.
At this time, due to the variability associated with clinical site agreements, contract research organization agreements and contract manufacturing agreements, we are unable to estimate with certainty the future costs we will incur.
To date, our estimates have not differed materially from the actual costs incurred. However, subsequent changes in estimates may result in a material change in our accruals, which could also materially affect our balance sheet and results of operations. Share-based Compensation We estimate the fair value of each option grant using the binomial option pricing model.
To date, our estimates have not differed materially from the actual costs incurred. However, subsequent changes in estimates may result in a material change in our accruals, which could also materially affect our balance sheet and results of operations.
The decrease in other development related costs was primarily due to the completion of the global Phase 2 trial in ulcerative colitis in 2023. At this time, due to the risks inherent in the clinical trial process, we are unable to estimate with any certainty the costs we will incur in the continued development of our Product Candidates.
At this time, due to the risks inherent in the clinical trial process, we are unable to estimate with any certainty the costs we will incur in the continued development of our Product Candidates.
Other than costs for outsourced services associated with our clinical programs, we generally do not track research and development expense by project; rather, we track such expense by the type of cost incurred.
Other than costs for outsourced services associated with our clinical programs, we generally do not track research and development expense by project; rather, we track such expense by the type of cost incurred. We expect research and development expense to increase in 2026 to support our development efforts, including completion of the ongoing Phase 2 clinical trials of rademikibart.
This operating lease for the new corporate headquarters is for 6,942 square feet of office space and expires on January 31, 2028.
In February 2025, we relocated our corporate headquarters to a new location in San Diego, California. This operating lease for the new corporate headquarters is for 6,942 square feet of office space and expires on January 31, 2028.
We have based our estimates on assumptions that may prove to be wrong, and we may use our available capital resources sooner than we currently expect.
We intend to use our current financial resources to fund our obligations under these commitments. 108 TABLE OF CONTENTS We have based our estimates on assumptions that may prove to be wrong, and we may use our available capital resources sooner than we currently expect.
Recent Accounting Pronouncements See Note 2 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K. 103 TABLE OF CONTENTS Results of Operations Comparison of the Years Ended December 31, 2024 and 2023 License and Collaboration Revenues License and collaboration revenues relate to the Simcere License Agreement under which Simcere has been granted exclusive rights to develop, manufacture, and commercialize rademikibart for all indications in Greater China, including mainland China, Hong Kong, Macau, and Taiwan.
Results of Operations Comparison of the Years Ended December 31, 2025 and 2024 License and Collaboration Revenues License and collaboration revenues relate to the Simcere License Agreement under which Simcere has been granted exclusive rights to develop, manufacture, and commercialize rademikibart for all indications in Greater China, including mainland China, Hong Kong, Macau, and Taiwan.
General and Administrative Expense General and administrative expense primarily consists of salaries, share-based compensation expense and other related costs for personnel in executive, finance and accounting, information technology, legal and human resource functions.
The lengthy process of completing our clinical trials and seeking regulatory approval for our Product Candidates requires the expenditure of substantial resources. General and Administrative Expense General and administrative expense primarily consists of salaries, share-based compensation expense and other related costs for personnel in executive, finance and accounting, information technology, legal and human resource functions.
Our net cash used in operating activities for the year ended December 31, 2024 was $23.6 million, compared to $47.7 million for the same period in 2023.
Liquidity and Capital Resources Summary of Statement of Cash Flows Our net cash used in operating activities for the year ended December 31, 2025 was $51.2 million, compared to $23.6 million for the same period in 2024.
The decrease in net cash used in operating activities was primarily due to a decrease in net loss, adjusted for non-cash share-based compensation expense and accretion of discounts on our available-for-sale investments, partially offset by changes in our operating assets and liabilities.
The increase in net cash used in operating activities was primarily due to an increase in net loss of $39.9 million and decrease in non-cash, share-based compensation expense of $3.0 million, partially offset by net changes in our operating assets and liabilities of $16.1 million.
Critical Accounting Estimates A summary of the significant accounting policies is provided in Note 2 to our Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.
Recent Accounting Pronouncements See Note 3 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.
Our U.S. entity is a service provider for the Hong Kong entity and as a result its cost-plus income is subject to taxation in the U.S. Income tax expense for the years ended December 31, 2024 and 2023 was $0.2 million and $0.1 million, respectively.
There is no tax expense in Hong Kong, PRC or Australia as there was no estimated assessable profit that was subject to tax. Our U.S. entity is a service provider for the Hong Kong entity and as a result its cost-plus income is subject to taxation in the U.S.
The discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the U.S. 102 TABLE OF CONTENTS The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.
The discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the U.S.
Material Cash Requirements As of December 31, 2024, we had a lease for 3,628 square feet of office space in San Diego, California, with a lease term that expires on April 30, 2025. We also have a lease for 25,476 square feet of laboratory and office space in Taicang, China, with a lease term that expires on April 30, 2026.
In addition, we have a lease for 25,476 square feet of laboratory and office space in Taicang, China, with a lease term that expires on April 30, 2026. As of December 31, 2025, we had total operating lease obligations of $0.8 million, with $0.4 million due in one year and $0.4 million due within two years.
Based on our current operating plan and projections, management believes that the Company’s existing cash, cash equivalents and short-term investments will be sufficient to meet the Company’s anticipated cash requirements for a period of at least one year from the date this Annual Report on Form 10-K is filed with the U.S. Securities and Exchange Commission.
Based on our current operating plans, we expect that our cash, cash equivalents and short-term investments, including the net proceeds from the Private Placement, will be sufficient to fund operations for a period of at least one year from the date this Annual Report on Form 10-K for the year ended December 31, 2025 is filed with the SEC.
Reorganization See Note 7 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for discussion of the Company’s executive officer reorganization plan. Liquidity and Capital Resources As of December 31, 2024, we had cash, cash equivalents and short-term investments of $93.7 million.
Income tax expense for both the years ended December 31, 2025 and 2024 was $0.2 million. 107 TABLE OF CONTENTS Reorganization See Note 8 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for discussion of the Company’s executive officer reorganization plan.
We have agreed to pay a basic annual rent for the additional office space that increases incrementally over the term of the lease from $0.3 million for the first 12 months of the lease (inclusive of certain rent abatements) to $0.4 million for the last 12 months of the lease, and such other amounts as set forth in the lease. 105 TABLE OF CONTENTS At December 31, 2024, purchase obligations primarily consisted of non-cancellable commitments with third-party manufacturers primarily including costs related to the development and technology transfer of a new high-yield cell-line for rademikibart, as well as ongoing stability studies for our Product Candidates.
We have agreed to pay a basic annual rent for the additional office space that increases incrementally over the term of the lease from $0.3 million for the first 12 months of the lease (inclusive of certain rent abatements) to $0.4 million for the last 12 months of the lease, and such other amounts as set forth in the lease.
We are incorporated in the Cayman Islands, with subsidiaries in Hong Kong, the PRC, Australia and the U.S., and we are exempt from income tax in the Cayman Islands. There is no tax expense in Hong Kong, PRC or Australia as there was no estimated assessable profit that was subject to tax.
Income Tax Expense Income tax expense is recognized based on the income tax rates in the following main tax jurisdictions where we operate. We are incorporated in the Cayman Islands, with subsidiaries in Hong Kong, the PRC, Australia and the U.S., and we are exempt from income tax in the Cayman Islands.
Overview Connect Biopharma, headquartered in San Diego, California, is a clinical-stage biopharmaceutical company focused on advancing rademikibart, a potentially best-in-class next generation IL-4Rα antibody, to transform care in asthma and chronic obstructive pulmonary disease. In June 2024, we announced new U.S.-based leadership with the appointment of Barry D.
Overview Connect Biopharma, headquartered in San Diego, California, is a clinical-stage biopharmaceutical company dedicated to transforming care for asthma and COPD. The Company is advancing rademikibart, a next generation, potentially best-in-class antibody designed to target IL-4Rα.
We evaluate our estimates on an ongoing basis, including those related to revenue recognition, accrued research and development expenses, and share-based compensation.
The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We evaluate our estimates on an ongoing basis, including those related to revenue recognition, accrued research and development expenses, 105 TABLE OF CONTENTS and share-based compensation.
Our net cash provided by financing activities for the year ended December 31, 2024 was $227,000, compared to $45,000 for the same period in 2023. The increase in cash provided by financing activities was primarily due to an increase in shares issued upon exercise of outstanding stock options.
Our net cash provided by financing activities for the year ended December 31, 2025 was $1.1 million, compared to $0.2 million for the same period in 2024. The increase in cash provided by financing activities was mainly due to an increase in net proceeds from stock option exercises and purchases under the ESPP.
The increase was also due to higher professional fees to support the Company’s ongoing operations. 104 TABLE OF CONTENTS Other Income, Net For the year ended December 31, 2024, other income, net was $7.0 million, compared to $7.1 million for the same period in 2023.
Other Income, Net For the year ended December 31, 2025, other income, net was $2.8 million, compared to $7.0 million for the same period in 2024. The decrease in other income, net was primarily due to a decrease in government subsidies and interest income earned on our invested cash balances.
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Quart, Pharm.D., as Chief Executive Officer and Director, and David Szekeres, as President. In addition, Kleanthis G. Xanthopoulos, Ph.D. assumed the role of Chairman of the Board. This change in leadership was the first step in transforming Connect into a U.S.-centric company and significantly reducing our footprint in China.
Added
Corporate Updates On September 2, 2025, we terminated each of (i) the Deposit Agreement dated March 18, 2021, as amended, by and among the Company, Deutsche Bank Trust Company Americas and the holders and beneficial owners from time to time of American Depositary Shares, each representing an Ordinary Share, and evidenced by American Depositary Receipts (“ADRs”) issued thereunder and (ii) the related ADR program.
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We continued to make progress by (i) assembling an experienced U.S. management team with deep expertise in drug development and regulatory execution, including having collectively received FDA marketing approval for 16 therapeutic products, and with deep expertise in business development, corporate strategy, finance and operations; (ii) developing a rapid clinical development program for rademikibart, which is expected to be initiated in the first half of 2025; (iii) relocating our corporate headquarters to San Diego, California; (iv) transferring the initial manufacturing process of rademikibart to a U.S.
Added
At such time, our ADRs were cancelled and exchanged for Ordinary Shares at a one-for-one ratio. We subsequently listed our Ordinary Shares on Nasdaq under our existing symbol “CNTB”. Critical Accounting Estimates A summary of the significant accounting policies is provided in Note 3 to our Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.
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CMO; and (v) taking additional steps to become more U.S.-centric, including the voluntary election to become a domestic filer with the SEC, beginning with this Annual Report on Form 10-K.
Added
License and collaboration revenues for the year ended December 31, 2025 were $64,000 for cost reimbursements for clinical materials.
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This fair value is then amortized using the straight-line single-option method of attributing the value of share-based compensation to expense over the requisite service periods of the awards. Forfeitures are accounted for, as incurred, as a reversal of share-based compensation expense related to awards that will not vest.
Added
The increase in research and development expense was primarily due to an increase in costs related to the development of rademikibart. During the second quarter of 2025, we initiated two rademikibart Phase 2 clinical trials in patients experiencing an acute exacerbation of asthma or COPD. This increase was partially offset by a decrease in non-cash, share-based compensation expense.
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The fair value of each employee share purchase right is estimated on the grant date using the Black-Scholes option pricing model. The estimated fair value of each purchase right is then expensed on a straight-line basis over the requisite service period, which is generally the purchase period.
Added
The increase in general and administrative expense was primarily due to an increase in professional fees to support our efforts to become more U.S.-centric. This increase was partially offset by a decrease in non-cash, share-based compensation expense.
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The binomial option pricing model and the Black-Scholes option pricing model require inputs of complex and subjective assumptions, including each option’s expected life and price volatility of the underlying shares.
Added
Liquidity and Material Cash Requirements As of December 31, 2025, we had $44.3 million in cash, cash equivalents and short-term investments. In March 2026, we entered into a securities purchase agreement with a select group of institutional accredited investors to sell 6.1 million shares of our ordinary shares in a private placement (“Private Placement”).
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The decrease in rademikibart-related costs was primarily due to lower clinical trial and drug manufacturing expenses as a result of (i) completion of the rademikibart global Phase 2b program in patients with asthma in late 2023, (ii) completion of the rademikibart China pivotal trials for patients with atopic dermatitis in late 2023, and (iii) higher costs incurred during 2023 for the manufacturing of rademikibart clinical trial material.
Added
The gross proceeds from the Private Placement are $20.2 million, before deducting placement agent fees and other offering expenses. We estimate the placement agent fees and other offering expenses will be $1.6 million. The Private Placement is scheduled to close on or about March 31, 2026.
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We expect research and development expense to increase in 2025 to support our development efforts, primarily due to the two Phase 2 trials of rademikibart, which we expect to initiate in the first half of 2025. The lengthy process of completing our clinical trials and seeking regulatory approval for our Product Candidates requires the expenditure of substantial resources.
Added
In March 2026, we entered into a lease amendment to extend the term of our operating lease in Taicang, China until April 30, 2027. The total rent expense due under this extension is $0.1 million.
Removed
The increase was primarily due to costs associated with executive departures, including cash severance of $1.2 million and non-cash, share-based compensation expense related to certain stock option modifications of $0.6 million.
Added
Furthermore, such economic conditions have produced downward pressure on share prices.
Removed
Other income, net primarily consists of interest income earned on our cash, cash equivalents and short-term investments and funds received from government grants related to our development activities. Income Tax Expense Income tax expense is recognized based on the income tax rates in the following main tax jurisdictions where we operate.
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Our net loss for the year ended December 31, 2024 was $15.6 million, or $0.28 per share, compared to a net loss of $62.1 million, or $1.13 per share, for the same period in 2023.
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As of December 31, 2024, we had total operating lease obligations of $199,000, with $166,000 due in one year and $33,000 due within two years. In February 2025, we relocated our corporate headquarters to a new location in San Diego, California.
Removed
Total purchase obligations of $3.4 million were not included in our consolidated financial statements for the year ended December 31, 2024, and are due within one year.

Other CNTB 10-K year-over-year comparisons