Aclaris Therapeutics, Inc.

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2024
 
Commission file number 001-37581
ACLARIS THERAPEUTICS, INC.
Incorporated under the Laws of the
 
I.R.S. Employer Identification No.
State of Delaware
46-0571712
701 Lee Road, Suite 103
Wayne, PA 19087
(484) 324-7933
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class:
Trading Symbol(s)
 
Name of Each Exchange on which Registered
Common Stock, $0.00001 par value
ACRS
 
The Nasdaq Stock Market, LLC
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐     No ⌧ 
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes ☐      No ⌧
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes ⌧     No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T
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As of June 28, 2024, the last business day of the registrant’s last completed second quarter, the aggregate market value of the registrant’s common stock held by non-
affiliates of the registrant was approximately $76.1 million based on the closing price of the registrant’s common stock, as reported by the Nasdaq Global Select Market, on such
date.
As of January 31, 2025, 107,918,821 shares of common stock, $0.00001 par value, were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
None.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K (this “Annual Report”) contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), that involve substantial risks and uncertainties. The forward-
looking statements are contained principally in Part I, Item 1. “Business,” Part I, Item 1A. “Risk Factors,” and Part II,
Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” but are also contained
elsewhere in this Annual Report. In some cases, you can identify forward-looking statements by the words “may,” “might,”
“can,” “will,” “to be,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “objective,” “anticipate,” “believe,”
“estimate,” “predict,” “project,” “potential,” “likely,” “continue” and “ongoing,” or the negative of these terms, or other
comparable terminology intended to identify statements about the future. These statements involve known and unknown
risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be
materially different from the information expressed or implied by these forward-looking statements. Although we believe
that we have a reasonable basis for each forward-looking statement contained in this Annual Report, we caution you that
these statements are based on a combination of facts and factors currently known by us and our expectations of the future,
about which we cannot be certain. Forward-looking statements include statements about:
●
our plans to develop our product candidates;
●
the clinical utility of our product candidates;
●
our plans and expectations related to manufacturing capabilities and strategy;
●
our expectations regarding coverage and reimbursement of our product candidates, if approved;
●
our intellectual property position;
●
our plans to pursue strategic alternatives, including identifying and consummating transactions with third-party
partners, to further develop, obtain marketing approval for and/or commercialize our product candidates, and earn
revenue from such arrangements;
●
our expectations regarding competition;
●
our expectations regarding our continued reliance on third parties;
●
the impacts of macroeconomic conditions on our business;
●
our expectations regarding our use of capital; and
●
our estimates regarding future revenue, expenses and needs for additional financing.
You should refer to Part I, Item 1A. “Risk Factors” in this Annual Report for a discussion of important factors that
may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. As a
result of these factors, we cannot assure you that the forward-looking statements in this Annual Report will prove to be
accurate, and you should not place undue reliance on these forward-looking statements. Furthermore, if our forward-
looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these
forward-looking statements, you should not regard these statements as a representation or warranty by us or any other
person that we will achieve our objectives and plans in any specified time frame, or at all. The forward-looking statements
in this Annual Report represent our views as of the date of this Annual Report. We anticipate that subsequent events and
developments may cause our views to change. However, while we may elect to update these forward-looking statements at
some point in the future, we undertake no obligation to publicly update any forward-looking statements, whether as a result
of new information, future events or otherwise, except as required by law. You should, therefore, not rely on these forward-
looking statements as representing our views as of any date subsequent to the date of this Annual Report.
All brand names or trademarks appearing in this Annual Report, including KINect and RHOFADE, are the
property of their respective owners. Unless the context requires otherwise, references in this report to “Aclaris,” the
“Company,” “we,” “us,” and “our” refer to Aclaris Therapeutics, Inc. and its subsidiaries.

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TABLE OF CONTENTS
Page
PART I
Item 1. Business
4
Item 1A. Risk Factors
23
Item 1B. Unresolved Staff Comments
63
Item 1C. Cybersecurity
63
Item 2. Properties
64
Item 3. Legal Proceedings
65
Item 4. Mine Safety Disclosures
65
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
66
Item 6. [Reserved]
66
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
67
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
81
Item 8. Financial Statements and Supplementary Data
82
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
110
Item 9A. Controls and Procedures
110
Item 9B. Other Information
111
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
112
PART III
Item 10. Directors, Executive Officers and Corporate Governance
113
Item 11. Executive Compensation
117
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
127
Item 13. Certain Relationships and Related Transactions, and Director Independence
130
Item 14. Principal Accountant Fees and Services
131
PART IV
Item 15. Exhibits and Financial Statement Schedules
132
Item 16. Form 10-K Summary
134
Signatures
135

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PART I
Item 1. Business
Overview
We are a clinical-stage biopharmaceutical company focused on developing novel small and large molecule
product candidates for immuno-inflammatory diseases. Our proprietary KINect drug discovery platform combined with our
preclinical development capabilities allows us to identify and advance potential product candidates that we may develop
independently or in collaboration with third parties. In addition to identifying and developing our novel product candidates,
we are pursuing strategic alternatives, including identifying and consummating transactions with third-party partners, to
further develop, obtain marketing approval for and/or commercialize our novel product candidates. We also provide
contract research services to third parties enabled by our early-stage research and development expertise.
Our Approach
We are dedicated to developing a pipeline of novel product candidates to address the needs of patients with
immuno-inflammatory diseases who lack satisfactory treatment options. Our approach to achieve this goal includes the
following key elements:
●
Research and development expertise. Our team of scientists and professionals has extensive experience in
cell and molecular biology, biochemistry, enzymology, biomarker development, immunology, in
vivo efficacy models, structure-based drug design (“SBDD”), and medicinal chemistry. In addition, our team
has broad experience in clinical development and strategy across atopic, respiratory and immunologic
diseases.
●
Develop innovative biologic product candidates targeting validated pathways. We are advancing
biologics programs focused on well-characterized pathways in immuno-inflammatory diseases. Our approach
leverages established biological targets while incorporating novel mechanisms and dual-targeting strategies
to potentially enhance therapeutic outcomes. The biologics market has grown significantly, with monoclonal
antibodies representing a major segment of U.S. Food and Drug Administration (“FDA”) approved
therapeutics. Our biologics pipeline includes bosakitug (ATI-045), an anti-thymic stromal lymphopoietin
(“TSLP”) monoclonal antibody which has unique differentiation demonstrated by its slow dissociation rate,
high residence time and high potency. TSLP is a key mediator in various inflammatory conditions, making it
an attractive therapeutic target. We are also advancing ATI-052, a novel bispecific antibody that
simultaneously targets both TSLP and interleukin-4 receptor (“IL4R”), potentially offering enhanced efficacy
through dual pathway inhibition. By pursuing both traditional monoclonal antibodies and innovative
bispecific approaches, we aim to develop differentiated biological therapies that address significant unmet
needs in immuno-inflammatory diseases.
●
Create small molecule medicines through kinome innovation. We are exploring the kinome, a subset of
the human genome that consists of a collection of 518 protein kinases, one of the largest of all human gene
families, responsible for signal transduction controlling cellular responses. Classified into eight major groups
based on their structural similarity to each other, kinases are key regulators of cell function in many cell
processes. By transferring phosphates to other molecules, kinases can induce a cellular response to
environmental cues. Dysregulation and/or activating/blocking mutations in kinases can disrupt normal cell
signaling and lead to diseases ranging from autoimmune diseases to diabetes and cancer, making them
important targets for drug development. There are over 80 kinase inhibitors approved by the FDA on the
market; however, these drugs only target a small fraction of the kinome, with many clinically relevant kinase
targets lacking validated inhibitors. In 2023, the kinase inhibitors market was valued at over $57 billion.
We’re focused on novel approaches toward the design and development of kinase inhibitors that target key
enzymes involved in chronic inflammation, autoimmune disease, and the regulation of cancer growth,
survival and metastasis. We are developing ATI-2138, a highly potent, oral small molecule covalent IL2-
inducible tyrosine kinase (“ITK”) and Janus kinase (“JAK”) 3 inhibitor for autoimmune diseases. In addition,
we are also progressing to candidate selection a second generation ITK selective inhibitor designed to
eliminate crossover on JAK3.
●
Identify additional product candidates through our KINect drug discovery platform. Our proprietary
KINect platform enables us to identify potential small molecule product candidates through a unique
combination of our proprietary chemical library of kinase inhibitors, our novel approach to inhibitor
modalities, our expertise in SBDD and our custom kinase assays.

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●
Broaden our drug development pipeline internally and externally. A key element of our strategy is to
build and expand our pipeline of product candidates. To build our pipeline, we may seek to in-license or
acquire additional product candidates, in addition to developing assets in-house.
●
Pursue strategic alternatives for our product candidates. We intend to pursue strategic alternatives,
including identifying and consummating transactions with third-party partners, to further develop, obtain
marketing approval for and/or commercialize our product candidates.
 
Our Key Product Candidate Pipeline
Our pipeline of key product candidates is summarized in the table below.
* This trial is sponsored and conducted by Chia Tai Tianqing Pharmaceutical Group, Co., Ltd. (“CTTQ”) or its affiliates.
Bosakitug, an Investigational, Novel Anti-TSLP Monoclonal Antibody
Bosakitug (ATI-045) is an investigational, novel, humanized anti-TSLP monoclonal antibody that specifically
binds to human TSLP with high affinity and long residence time, blocking its interaction with the receptor complex and
disrupting signal transduction. This mechanism prevents a broad range of immune cells targeted by TSLP from releasing
proinflammatory cytokines. Bosakitug has the potential to treat a variety of atopic, immunologic and respiratory diseases.
We exclusively license global rights (excluding Greater China) to bosakitug from Biosion, Inc. (“Biosion”).
In a Phase 2a, single-arm, proof-of-concept trial in 22 U.S. patients with moderate to severe atopic dermatitis
conducted by Biosion, bosakitug demonstrated a positive pharmacodynamic, safety and efficacy profile, with 94% of
patients achieving a 75% improvement in the Eczema Area and Severity Index (“EASI”), 65% of patients achieving EASI-
90, and 88% of patients achieving an Investigator’s Global Assessment (“IGA”) score of 0 or 1 (clear or almost clear skin),
at week 26 (n=17). Bosakitug was generally well-tolerated with no serious adverse events reported. The most common
treatment-emergent adverse event was headache (22.7% of patients). Grade 1 injection site reactions, primarily tenderness,
occurred in 47.6% of patients.
We plan to initiate a Phase 2b trial of bosakitug in patients with moderate to severe atopic dermatitis in the first
half of 2025.

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Bosakitug is also currently being evaluated in multiple Phase 2 trials in severe asthma, chronic rhinosinusitis with
nasal polyps (“CRSwNP”) and moderate to severe chronic obstructive pulmonary disease (“COPD”) in China by CTTQ.
CTTQ licenses bosakitug from Biosion in Greater China. We anticipate data from the severe asthma trial and CRSwNP
trial in the first half of 2025, which we expect will inform our internal development programs.
ATI-2138, an Investigational Oral Covalent ITK/JAK3 Inhibitor
ATI-2138 is an investigational oral covalent inhibitor of ITK and JAK3 for the potential treatment of T cell-
mediated autoimmune diseases. The ITK/JAK3 compound interrupts T cell signaling through the combined inhibition of
ITK/JAK3 pathways in lymphocytes.
In September 2023, we announced positive results from our two-week Phase 1 placebo-controlled, randomized,
multiple ascending dose (“MAD”) trial of ATI-2138. The trial was designed to investigate the safety, tolerability,
pharmacokinetics (“PK”) and pharmacodynamics (“PD”) of ATI-2138 in healthy volunteers. The trial enrolled 60 healthy
volunteers across 6 dosing cohorts ranging from 10 to 80 mg of total daily doses, with eight volunteers receiving ATI-2138
and two volunteers receiving placebo in each arm. Data from the trial demonstrated that ATI-2138 was generally well
tolerated at all doses tested and had dose proportional PK. Additionally, ATI-2138 demonstrated a dose-dependent
inhibition of both ITK and JAK3 exploratory PD biomarkers, with near maximal inhibition achieved at the 30 mg total
daily dose. No serious adverse events were reported.
We are conducting a Phase 2a open-label trial to investigate the safety, tolerability, PK, efficacy, and PD of ATI-
2138 administered over 12 weeks in approximately 15 patients in the United States with moderate to severe atopic
dermatitis. The primary endpoints are safety related parameters. Secondary endpoints include EASI response (EASI-50,
EASI-75, EASI-90),  validated IGA response, body surface area response and other pertinent efficacy related
measures. We expect to announce top-line data in the first half of 2025.
We are also exploring the potential of ATI-2138 in additional indications that are relevant to the mechanism of
action, including alopecia areata and vitiligo.
ATI-052, an Investigational, Novel Anti-TSLP and Anti-IL4R Bispecific Antibody
ATI-052 is a humanized anti-TSLP and anti-IL4R bispecific antibody that blocks both the upstream TSLP
receptor signal transduction and downstream IL4R activation thereby inhibiting this central proinflammatory pathway.
ATI-052 utilizes the same TSLP as bosakitug but is engineered to bind more tightly to the neonatal Fc receptor (“FcRn”),
potentially extending its half-life. ATI-052 has the potential to treat a variety of atopic, immunologic and respiratory
diseases.
We plan to submit an Investigational New Drug (“IND”) application for ATI-052 in the first quarter of 2025. If the
IND is allowed, we plan to initiate a Phase 1 single ascending dose and MAD trial of ATI-052.
Other Investigational Product Candidates
Lepzacitinib, an Investigational Topical “Soft” JAK 1/3 Inhibitor
Lepzacitinib (ATI-1777) is an investigational topical “soft” JAK 1/3 inhibitor for the potential treatment of atopic
dermatitis and potentially other dermatologic conditions. “Soft” JAK inhibitors are designed to be topically applied and
active in the skin, but rapidly metabolized and inactivated when they enter the bloodstream, which may result in low
systemic exposure.
In January 2024, we announced positive top-line results from our Phase 2b multicenter, randomized, double-blind,
vehicle-controlled, parallel-group trial of lepzacitinib in patients with mild to severe atopic dermatitis. The trial was
designed to evaluate the efficacy, safety, tolerability and PK of multiple concentrations (0.5%, 1% and 2%) of twice daily
(“BID”) treatment with lepzacitinib and a single concentration (2%) of once daily (“QD”) treatment with lepzacitinib. The
trial randomized 250 patients with mild, moderate or severe atopic dermatitis, including adults and children as young as 12
years old, across 30 clinical trial sites in the United States. The trial met the primary efficacy endpoint, the percent

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change from baseline in EASI score at week 4, with statistical significance for patients treated with lepzacitinib 2% BID
compared to patients treated with vehicle (69.7% versus 58.7% in the pooled vehicle group, p=0.035). In addition, a PK
analysis showed minimal levels of exposure to lepzacitinib. The mean steady state trough drug levels at week 4 were 0.319
ng/mL, representing 0.7% of IC50 for JAK 1/3 inhibition in whole blood. In total, 97% of lepzacitinib plasma samples
from dosed patients had concentrations below 1/10th of the IC50, and six samples (from five lepzacitinib treated patients)
of 764 samples analyzed had concentrations above 1/4 of the IC50. No meaningful safety findings were observed and
lepzacitinib was well tolerated.
We are currently seeking a global development and commercialization partner for this program (excluding Greater
China). In 2022, we granted Pediatrix Therapeutics, Inc. exclusive rights to develop and commercialize lepzacitinib in
Greater China. 
Zunsemetinib, an Investigational Oral MK2 Inhibitor
Zunsemetinib (ATI-450) is an investigational oral, novel, small molecule selective inhibitor of the mitogen-
activated protein kinase-activated protein kinase 2 (“MK2”) signaling pathway for the potential treatment of metastatic
breast cancer (“MBC”) and pancreatic ductal adenocarcinoma (“PDAC”).
MBC: Phosphorylated MK2 is upregulated in primary tumors and metastatic bone lesions from MBC patients.
  MK2 is responsible for the production of a subset of critical pro-tumorigenic factors secreted by the stromal
microenvironment to support tumor growth and metastasis. Additionally, MK2 drives both metastatic and chemotherapy
induced bone loss in MBC patients through, at least in part, its role in RANKL biology and osteoclast production and
activation. In preclinical studies, zunsemetinib has been demonstrated to impact murine models of MBC through
inhibition of tumor growth and metastasis along with bone preservation.
PDAC: Phosphorylated MK2 is highly expressed in PDAC tissue and expression levels are directly associated
with poor outcomes in patients with PDAC. The current first and second line standard of care for PDAC patients is
FOLFIRINOX combination chemotherapy. Irinotecan and its metabolite, SN-38, are the main drivers of cancer cell
apoptosis associated with FOLFIRINOX. The effectiveness of FOLFIRINOX is limited by pro-survival resistance
mechanisms that are driven through SN-38 activation of the MK2 pathway and phosphorylation of two direct MK2
substrates, HSP-27 and Beclin-1. In both patient derived xenografts and in the autochthonous genetic KPPC model of
PDAC in mice, zunsemetinib has demonstrated that it blocks phosphorylation and activation of HSP-27, induces tumor
cell killing and enhances the efficacy of FIRINOX (a version of FOLFIRINOX used in murine models).
We plan to support Washington University in St. Louis in its investigator-initiated Phase 1b/2 trials of
zunsemetinib in patients with MBC and PDAC.
Discovery Programs and KINect Drug Discovery Platform
We conduct small molecule drug discovery and preclinical development research through KINect, our proprietary
drug discovery platform, which we acquired as part of our acquisition of Confluence Life Sciences, Inc. (now known as
Aclaris Life Sciences, Inc.) (“Confluence”), in 2017. Our KINect platform enables us to identify potential small molecule
product candidates through a unique combination of our proprietary chemical library of kinase inhibitors, our novel
approaches to inhibitor modalities, our expertise in SBDD, and our custom kinase assays.
Our focus has been on difficult to drug kinase targets that exhibit some level of clinical, genetic and/or
pharmacological disease validation. Our approach involves the following mechanisms: (1) reversible and irreversible
covalent inhibitors, (2) molecular glue/complex targeted inhibitors and (3) targeted protein degraders. These novel
approaches are currently being utilized to prosecute additional validated, difficult to drug kinase targets with the goal of
demonstrating potential platform utility.
Reversible and Irreversible Covalent Inhibitors: Central to the KINect platform is our novel chemical library of
several hundred compounds specifically designed to target non-catalytic cysteine residues near the adenosine triphosphate
(“ATP”) binding site of more than 300 kinases. Furthermore, using state-of-the-art drug modeling software, we are able to
elaborate the structure of viable drug-like compounds culled from our library and extensive in silico libraries to optimize
reversible binding to the target kinase and allow them to selectively form a covalent bond with the cysteine residue near the
ATP site on the specific kinase target. This approach delivers inhibitors exhibiting enhanced potency, selectivity and

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biochemical efficiency thereby allowing pharmacological access to ‘hard to drug’ kinases. We then assess the function of
the newly created compounds with physiologically relevant custom assays that effectively translate to human diseases.
Molecular Glue/Complex Targeted Inhibitors: In cells, protein kinases function in the context of multicomponent
signalosome complexes. Targeting kinase complexes with small molecule drugs designed to either stabilize (molecular
glue) and/or generate inactive complexes provides several potential advantages over those designed against a single protein
target including: (1) utilizing a more physiological translatable complex as the target, (2) providing novel protein interfaces
devoid of competing endogenous ligands to target, and (3) identifying new chemical matter and modalities for difficult to
drug kinase targets. As such, we have identified target complexes of interest and have initiated discovery programs against
these targets.
Targeted Protein Degraders: We believe targeted protein degraders represent a powerful approach to develop
drugs against biologically important but difficult to drug proteins including kinases. This approach harnesses cellular
protein clearing machinery to selectively remove proteins from the cell in contrast to inhibiting their function. This
approach is particularly useful for kinases that have both catalytic and scaffolding functions for which inhibitors will only
partially impact biology. We are exploring selective degraders of kinase targets with multiple biological functions in
addition to the catalytic activity.
This integrated drug discovery engine allows us to rapidly progress potential product candidates from idea to IND.
We believe this platform can generate inhibitors with fit-for purpose mechanisms ranging from reversible, to reversible-
covalent to irreversible-covalent kinase and kinase complex inhibitors along with targeted protein degraders.
We are actively progressing several discovery programs focused on delivering the next wave of small molecule
product candidates from our KINect platform. Our discovery efforts center on targeting kinases that play pivotal roles in
various inflammatory, autoimmune, and oncology pathways.
In addition to our small molecule discovery efforts, we maintain capabilities in biologics discovery to complement
our therapeutic portfolio. Through our integrated discovery platform, we can progress biologics candidates from concept
through lead optimization, employing robust screening cascades and protein characterization techniques to identify
molecules with desired therapeutic properties. This complementary approach to our small molecule programs enables us to
pursue optimal therapeutic modalities for each target and indication of interest.
We intend to evaluate both internal and external development options, including strategic partnerships, for these
assets.
Manufacturing and Supply
We do not have any manufacturing facilities. We rely on third parties for the manufacture of preclinical and
clinical supplies for our product candidates.
Competition
The pharmaceutical industry is characterized by rapidly advancing technologies, intense competition and a strong
emphasis on proprietary drugs. While we believe that our knowledge, experience and scientific resources provide us with
competitive advantages, we face potential competition from many different sources, including major pharmaceutical,
biotechnology and specialty pharmaceutical companies, academic institutions and governmental agencies and public and
private research institutions. Our product candidates, if approved, will compete with existing treatments and new
treatments that may become available in the future.
With respect to bosakitug, we are aware of a number of companies with monoclonal antibodies also targeting the
TSLP ligand, and one company targeting the TSLP receptor, including Amgen and AstraZenaca (tezepelumab), KeyMed
Biosciences (CM-326), Uniquity Bio (solrikitug), Windward Bio (WIN378), Tavotek Biotherapeutics (TAVO101),
GlaxoSmithKline (“GSK”)  (GSK5784283), and UpStream Bio (verekutig). As a potential treatment for atopic dermatitis,
there are several different types of therapies in the atopic dermatitis market, such as biologics, oral and topical
corticosteroids, oral and topical calcineurin inhibitors, oral mycophenolate products, JAK inhibitors, other oral antibiotics
and antihistamines and phototherapy. There are also several prescription, non-prescription and over-the-counter topical
products, including PDE4 inhibitors, utilized to treat atopic dermatitis. These types of drugs are produced and sold, or are

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approved for marketing, by large pharmaceutical companies, including AbbVie (upadacitinib), Incyte (ruxolitinib), LEO
Pharma A/S (delgocitinib), Pfizer (crisaborole; abrocitinib), Eli Lilly (lebrikizumab), Dermavant Sciences (tapinarof), and
Regeneron Pharmaceuticals and Sanofi (dupilumab). In addition, we are aware of a number of companies, including large
pharmaceutical companies, such as Amgen (rocatinlimab), Eli Lilly (ucenprubart), LEO Pharma A/S (tralokinumab), Pfizer
(PF-07264660; PF-07275315), KeyMed Biosciences (stapokibart), and Tavotek Biotherapeutics (TAVO101) developing
and conducting clinical trials for investigational product candidates that could compete with bosakitug in each case if
approved, for the treatment of atopic dermatitis. With respect to bosakitug as a potential treatment for asthma, existing
therapeutics for asthma include controller medications, reliever medications and more recently, biologics from Genentech
and Novartis (omalizumab), Sanofi and Regeneron (dupilumab), GSK (mepolizumab), and AstraZeneca (benralizumab),
with other products in development, including by UpStream Bio (verekutig), Amgen and AstraZeneca (tezepelumab),
KeyMed Biosciences (CM-326), Uniquity Bio (solrikitug), Sanofi (rilzabrutinib), GSK (GSK5784283), and Windward Bio
(WIN378). Existing therapeutics for CRSwNP include topical corticosteroids, nasal saline irrigations and more recently,
biologics from Genentech and Novartis (omalizumab), Sanofi and Regeneron (dupilumab), and GSK (mepolizumab).
Companies such as GSK, KeyMed Biosciences, and Upstream Bio are also developing potential therapeutics for CRSwNP.
Existing therapeutics for COPD include inhaled steroids, bronchodilator inhalers, and recently, a biologic by Sanofi and
Regeneron (dupilumab). Amgen and AstraZeneca (tezepelumab) are also conducting clinical trials in COPD.
With respect to ATI-2138, there are several companies that are developing or have approved drugs that target
either ITK or JAK that could compete with ATI-2138, if approved. For example, Corvus Pharmaceuticals is currently
developing a selective, covalent inhibitor of ITK (soquelitinib), including in atopic dermatitis. In addition, Pfizer's
ritlecitinib is reported to inhibit ITK and is approved for alopecia areata and is being developed for vitiligo, Crohn’s disease
and ulcerative colitis. In addition to these companies, Janssen Pharmaceuticals and AbbVie are co-marketing a small
molecule inhibitor of the kinase BTK (ibrutinib) that has also been reported to inhibit ITK. Several companies are
developing or have commercialized JAK inhibitors that may compete with ATI-2138, if approved, including Pfizer
(tofacitinib, abrocitinib, and ritlecitinib), Eli Lilly/Incyte (baricitinib), and AbbVie (upadacitinib).
The commercial opportunity for our product candidates, if approved, could be reduced or eliminated if our
competitors develop and commercialize drugs that are safer, more effective, have fewer or less severe side effects, are more
convenient or are less expensive than any drug we may develop. Our competitors also may obtain FDA or other regulatory
approval for their product candidates more rapidly than our potential third-party partners may obtain approval for our
product candidates, which could result in our competitors establishing a strong market position before our product
candidates are able to enter the market.
Many of the companies against which we are competing, or against which we may compete in the future, have
significantly greater financial resources and expertise in research and development, manufacturing, and preclinical and
clinical development than we do. Mergers and acquisitions in the pharmaceutical and biotechnology industries may result
in even more resources being concentrated among a smaller number of our competitors. Smaller or early-stage companies
may also prove to be significant competitors, particularly through collaborative arrangements with large and established
companies. These competitors also compete with us in recruiting and retaining qualified scientific and management
personnel and establishing clinical trial sites and subject registration for clinical trials, as well as in acquiring technologies
complementary to, or that may be necessary for, our development programs.
Intellectual Property
Our success depends in large part upon our ability to obtain and maintain proprietary protection for our product
candidates and to operate without infringing the proprietary rights of others. We seek to avoid the latter by monitoring
patents and publications that may affect our business, and to the extent we identify such developments, evaluating and
taking appropriate courses of action. Our policy is to protect our proprietary position by, among other methods, filing
patent applications on inventions that are important to the development and conduct of our business with the U.S. Patent
and Trademark Office (“USPTO”) and its foreign counterparts.
With respect to our TSLP monoclonal antibody development program, we exclusively license pending
applications in the United States, European Union, Japan and South Korea directed to TSLP monoclonal antibodies,
including bosakitug, which, if issued, would naturally expire in 2040, subject to any applicable patent term adjustment or
extension that may be available in a particular country.  We also exclusively license a pending provisional application
directed to methods of using TSLP monoclonal antibodies for the treatment of atopic dermatitis, which, if issued, would

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naturally expire in 2045, subject to any applicable patent term adjustment or extension that may be available in a particular
country.  
With respect to our ITK inhibitor development program, we own numerous issued patents and pending
applications in the United States and foreign countries directed to novel inhibitors of ITK, including ATI-2138, and
methods of use that expire, or would expire, between 2035 and 2044, subject to any applicable patent term adjustment or
extension that may be available in a particular country. For example, we own one U.S. patent and pending U.S., European
Union and other foreign country applications directed to ATI-2138 and analogs thereof and methods of using the same,
which, if issued, would expire in 2039, subject to any applicable adjustment or extension. We also own a pending
international patent application filed under the Patent Cooperation Treaty (“PCT”) directed to methods of using ATI-2138,
which if issued, would expire in 2043, subject to any applicable adjustment or extension. We also own pending PCT
applications directed to crystal forms of ATI-2138 and to methods of synthesizing such ITK inhibitors, including ATI-2138,
which if issued, would each expire in 2044, subject to any applicable adjustment or extension.
With respect to our bispecific antibody development program, we exclusively license a pending PCT application
directed to such bispecific antibodies, including ATI-052, which, if issued, would naturally expire in 2043, subject to any
applicable patent term adjustment or extension that may be available in a particular country.
With respect to our “soft” JAK inhibitor development program, we own numerous issued patents and pending
applications in the United States and foreign countries to novel “soft” JAK inhibitors, various methods of use and synthesis
that expire, or would expire, between 2038 and 2044, subject to any applicable patent term adjustment or extension that
may be available in a particular country. For example, we own issued patents in the United States and China, as well as
pending applications in the United States and foreign countries directed to various novel inhibitors of JAK1 and/or JAK3,
including lepzacitinib, and methods of using the same, which, if issued, would expire in 2038, subject to any applicable
adjustment or extension. We also own pending applications in the United States and foreign countries directed to crystal
forms of lepzacitinib and directed to methods of using lepzacitinib and topical formulations, which, if issued, would expire
in 2041 and 2042, respectively, subject to any applicable adjustment or extension.  We also own a pending PCT application
directed to methods of synthesizing such novel inhibitors of JAK1 and/or JAK3, including lepzacitinib, which, if issued,
would expire in 2044, subject to any applicable adjustment or extension.
With respect to our MK2 signaling pathway inhibitor development program, we own numerous issued patents and
pending applications to novel MK2 pathway inhibitors, including zunsemetinib, and various methods of use that expire, or
would expire, between 2031 and 2041, subject to any applicable patent term adjustment or extension that may be available
in a particular country. For example, we own two issued U.S. patents and issued patents in the European Union and Japan
directed to zunsemetinib and analogs thereof and certain methods of using the same. The U.S. patents expire in 2034 and
any claims that may issue from the pending applications expire in 2034, subject to any applicable adjustment or extension.
We own a pending patent application in the United States directed to methods of treating various cancers, such as breast
cancer and pancreatic cancer, by orally administering zunsemetinib, which, if issued, would expire in 2041, subject to any
applicable adjustment or extension. Further, we own one U.S. patent and a pending patent application in the United States
directed to certain methods of manufacturing zunsemetinib, as well as pending applications in the United States and Japan
to crystal forms of zunsemetinib, which, if issued, would each expire in 2041, subject to any applicable adjustment or
extension. We also exclusively license from Washington University pending applications in the United States and the
European Union directed to methods of treating pancreatic cancer with MK2 inhibitors, including zunsemetinib, which, if
issued, would expire in 2041, subject to any applicable adjustment or extension.
Patents extend for varying periods according to the date of patent filing or grant and the legal term of patents in
various countries where patent protection is obtained. The actual protection afforded by a patent, which can vary from
country to country, depends on the type of patent, the scope of its coverage and the availability of legal remedies in the
country. In most countries in which we file, the patent term is 20 years from the earliest date of filing a non-provisional
patent application. In the United States, a patent term may be shortened if a patent is terminally disclaimed over another
patent or as a result of delays in patent prosecution by the patentee, and a patent’s term may be lengthened by patent term
adjustment, which compensates a patentee for administrative delays by the USPTO in granting a patent or by patent term
extension, which compensates a patentee for delays at the FDA. The patent term of a European patent is 20 years from its
filing date; however, unlike in the United States, the European patent is not subject to patent term adjustments. The
European Union does have a compensation program similar to patent term extension called supplementary patent
certificate that would effectively extend patent protection for up to five years.

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We also use other forms of protection, such as trademark, copyright, and/or trade secret protection, to protect our
intellectual property, particularly where we do not believe patent protection is appropriate or obtainable. We aim to take
advantage of all of the intellectual property rights that are available to us and believe that this comprehensive approach will
provide us with proprietary positions for our product candidates, where available.
We also protect our proprietary information by requiring our employees, consultants, contractors and other
advisors to execute nondisclosure and assignment of invention agreements upon commencement of their respective
employment or engagement. Agreements with our employees also prevent them from bringing the proprietary rights of
third parties to us. In addition, we also require confidentiality or service agreements from third parties that receive our
confidential information or materials.
Acquisition and License Agreements
Exclusive License Agreement with Biosion
In November 2024, we entered into an exclusive license agreement (the “Biosion Agreement”) with Biosion,
  pursuant to which we received exclusive rights to develop, manufacture and commercialize bosakitug and ATI-052
worldwide, excluding Mainland China, Macau, Hong Kong and Taiwan (“Greater China”). In connection with the Biosion
Agreement, we also entered into a collaboration agreement (the “CTTQ Agreement”) with Biosion and CTTQ, a licensee
of bosakitug in Greater China.
Under the Biosion Agreement and CTTQ Agreement, we agreed to pay, in the aggregate, $30.0 million in upfront
cash consideration, plus $4.5 million for the reimbursement of certain development costs. We also issued warrants in the
aggregate to purchase 14,281,985 shares of our common stock with an exercise price of $0.00001 per share. The warrants
are immediately exercisable, subject to any required overseas direct investment filings, and terminate when exercised in
full. We also agreed to pay, in the aggregate (i) $6.2 million for reimbursement of certain development costs and drug
product material, (ii) up to $125 million upon the achievement of specified regulatory milestones beginning with product
approval, (iii) up to $795 million upon the achievement of specified sales milestones, (iv) a tiered low-to-mid single digit
royalty based upon a percentage of annual net sales, subject to specified reductions, and (v) a portion of any sublicense
consideration received from granting sublicense or similar rights under any of the rights or licenses granted to us.
Agreement and Plan of Merger with Confluence
In August 2017, we entered into an Agreement and Plan of Merger (the “Confluence Agreement”) with
Confluence, Aclaris Life Sciences, Inc., our wholly-owned subsidiary (“Merger Sub”), and Fortis Advisors LLC, as
representative of the former equity holders of Confluence. Pursuant to the terms of the Confluence Agreement, the Merger
Sub merged with and into Confluence, with Confluence surviving as our wholly-owned subsidiary, resulting in our
acquisition of 100% of the outstanding shares of Confluence. As part of the Confluence acquisition we acquired our
investigational product candidates zunsemetinib, lepzacitinib and ATI-2138. 
Under the Confluence Agreement, we agreed to pay the former Confluence equity holders aggregate remaining
contingent consideration of up to $75.0 million based upon the achievement of specified regulatory and commercial
milestones set forth in the Confluence Agreement. In addition, we have agreed to pay the former Confluence equity holders
future royalty payments calculated as a low single-digit percentage of annual net sales, subject to specified reductions,
limitations and other adjustments, until the date that all of the patent rights for that product have expired, as determined on
a country-by-country and product-by-product basis or, in specified circumstances, ten years from the first commercial sale
of such product.  In addition to the payments described above, if we sell, license or transfer any of the intellectual property
acquired from Confluence pursuant to the Confluence Agreement to a third party, we will be obligated to pay the former
Confluence equity holders a portion of any consideration received from such sale, license or transfer in specified
circumstances.
Government Regulation and Product Approval
Governmental authorities in the United States, at the federal, state and local level, and analogous authorities in
other countries extensively regulate, among other things, the research, development, testing, manufacture, safety
surveillance, efficacy, quality control, labeling, packaging, distribution, record keeping, promotion, storage, advertising,
distribution, marketing, sale, export and import, and the reporting of safety and other post-market information of products

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such as the ones we are developing. A drug or biological product candidate must be approved by the FDA before it may be
legally promoted in the United States and by comparable foreign regulatory authorities before marketing in other
jurisdictions. The process of obtaining regulatory approvals and the subsequent compliance with applicable federal, state,
local and foreign statutes and regulations require the expenditure of substantial time and resources. Failure to comply with
the applicable U.S. requirements at any time during the product development process, approval process or after approval
may subject an applicant and/or sponsor to a variety of administrative or judicial sanctions, including refusal by regulatory
authorities to approve applications, withdrawal of an approval, imposition of a clinical hold, import/export delays, issuance
of warning letters and untitled letters, product recalls, product seizures, total or partial suspension of production or
distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement of profits, or civil or criminal
investigations and penalties brought by FDA and the Department of Justice or other governmental entities.
United States Government Regulation
NDA and BLA Approval Processes
In the United States, the FDA regulates drugs under the Federal Food, Drug, and Cosmetic Act (“FDCA”) and its
implementing regulations, and biologics under the FDCA, the Public Health Service Act (“PHSA”) and their implementing
regulations. Drugs and biologics also are subject to other federal, state, local and foreign statutes and regulations. The
process required by the FDA before new drug and biologic product candidates may be marketed in the United States
generally involves the following:
●
completion of preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s
good laboratory practice (“GLP”) regulations;
●
submission to the FDA of an IND which must take effect before clinical trials may begin;
●
approval by an independent institutional review board (“IRB”) representing each clinical site before clinical
testing may be initiated at the clinical site;
●
performance of adequate and well-controlled clinical trials in accordance with good clinical practice (“GCP”)
regulations to establish the safety and efficacy of the proposed drug product for each indication;
●
preparation and submission to the FDA of a New Drug Application (“NDA”) for a drug or a Biologics License
Application (“BLA”) for a biologic, after completion of all pivotal trials;
●
determination by the FDA within 60 days of its receipt of an NDA or BLA to file the application for review;
●
review of the NDA or BLA by an FDA advisory committee, if applicable;
●
satisfactory completion of one or more FDA inspections of the manufacturing facility or facilities at which the
drug or biologic or its components are produced to assess compliance with current good manufacturing practices
(“cGMP”) and regulations to assure that the facilities, methods and controls are adequate to preserve the product’s
identity, strength, quality and purity;
●
payment of user fees and securing FDA approval of the NDA or BLA; and
●
compliance with any post-approval requirements, including potential requirements for a risk evaluation and
mitigation strategy and post-approval studies required by the FDA.
Once a drug or biological product candidate is identified for development, it enters the preclinical or nonclinical
testing stage. Preclinical studies include laboratory evaluations of product chemistry, pharmacology, toxicity and
formulation. An IND sponsor must submit the results of the preclinical studies, together with manufacturing information
and analytical data, to the FDA as part of the IND. Some preclinical studies may continue even after the IND is submitted.
In addition to including the results of the preclinical studies, the IND will also include a protocol detailing, among other
things, the objectives of the clinical trial, the parameters to be used in monitoring safety and the effectiveness criteria to be
evaluated if the first phase lends itself to an efficacy determination. The IND automatically becomes effective 30 days after
receipt by the FDA, unless the FDA, within the 30-day time period, places the IND on clinical hold. In such a case, the
IND sponsor and the FDA must resolve any outstanding concerns before clinical trials can begin. A clinical hold may
occur at any time during the life of an IND, and may affect one or more specific clinical trials or all clinical trials
conducted under the IND.
All clinical trials must be conducted under the supervision of one or more qualified investigators in accordance
with current GCP regulations. They must be conducted under protocols detailing the objectives of the trial, dosing
procedures, research subject selection and exclusion criteria, and the safety and effectiveness criteria to be evaluated. Each
protocol must be submitted to the FDA as part of the IND, and progress reports detailing the status of the clinical trials
must be submitted to the FDA annually, as well as safety reporting. An IRB for each site participating in the clinical trial

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must review and approve the protocol before the clinical trial commences at that institution and must also approve the
information regarding the trial and the consent form that must be provided to each research subject or the subject’s legal
representative, monitor the study until completed and otherwise comply with IRB regulations.
Clinical trials are typically conducted in three sequential phases that may overlap or be combined:
●
Phase 1. The drug or biological product candidate is initially introduced into healthy human subjects and tested
for safety, dosage tolerance, absorption, metabolism, distribution and elimination. In the case of some products
for severe or life-threatening diseases, such as cancer, and especially when the product may be inherently too
toxic to ethically administer to healthy volunteers, the initial human testing is often conducted in patients who
already have the condition.
●
Phase 2. Clinical trials are performed on a limited patient population intended to identify possible adverse effects
and safety risks, to preliminarily evaluate the efficacy of the drug or biological product candidate for specific
targeted diseases and to determine dosage tolerance and optimal dosage.
●
Phase 3. If a drug or biological product candidate is found to be potentially effective and to have an acceptable
safety profile in Phase 2 clinical trials, the clinical trial program will be expanded to Phase 3 clinical trials to
further evaluate dosage, to provide substantial evidence of efficacy, or purity and potency, and to further test for
safety in an expanded patient population at geographically dispersed clinical trial sites. These trials are intended
to establish the overall risk-benefit ratio of the drug or biological product candidate and provide an adequate basis
for product approval and labeling claims.
Phase 4 clinical trials are conducted after approval to gain additional experience from the treatment of patients in
the intended therapeutic indication and to document a clinical benefit in the case of drugs or biologics approved under
accelerated approval regulations, or when otherwise requested by the FDA in the form of post-market requirements or
commitments. Failure to promptly conduct any required Phase 4 clinical trials could result in withdrawal of approval of an
NDA or BLA.
Clinical trials are inherently uncertain, and Phase 1, Phase 2 and Phase 3 testing may not be successfully
completed. The FDA or the sponsor may suspend a clinical trial at any time for a variety of reasons, including a finding
that the research subjects or patients are being exposed to an unacceptable health risk. Similarly, an IRB can suspend or
terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB’s
requirements or if the drug or biological product candidate has been associated with unexpected serious harm to patients. In
some cases, clinical trials are overseen by an independent group of qualified experts organized by the trial sponsor, which
is called the clinical monitoring board or data safety monitoring board. This group provides authorization for whether or
not a trial may move forward at designated check points. These decisions are based on the limited access to data from the
ongoing trial.
During the development of a new drug or biologic, sponsors are given opportunities to meet with the FDA at
certain points. These points may be prior to the submission of an IND, at the end of Phase 2 and before an NDA is
submitted. Meetings at other times may be requested. These meetings can provide an opportunity for the sponsor to share
information about the data gathered to date and for the FDA to provide advice on the next phase of development. Sponsors
typically use the meeting at the end of Phase 2 to discuss their Phase 2 clinical trial results and present their plans for the
pivotal Phase 3 clinical trial or trials that they believe will support the approval of the new drug or biologic.
Concurrent with clinical trials, sponsors usually complete additional animal safety studies and also develop
additional information about the chemistry and physical characteristics of the drug or biologic and finalize a process for
manufacturing commercial quantities of the product in accordance with cGMP requirements. The manufacturing process
must be capable of consistently producing quality batches of the drug or biologic and the manufacturer must develop
methods for testing the quality, purity and potency of the drug or biologic. Additionally, appropriate packaging must be
selected and tested, and stability studies must be conducted to demonstrate that the drug or biological product candidate
does not undergo unacceptable deterioration over its proposed shelf-life.
The results of product development, preclinical studies and clinical trials, along with descriptions of the
manufacturing process, analytical tests and other control mechanisms, proposed labeling and other relevant information are
submitted to the FDA as part of an NDA or BLA requesting approval to market the product. The submission of an NDA or
BLA is subject to the payment of user fees, but a waiver of such fees may be obtained under specified circumstances. The
FDA reviews all NDAs and BLAs submitted for a period of 60  days to ensure that they are sufficiently complete for
substantive review before it accepts them for filing. It may request additional information rather than accept

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an NDA or BLA for filing. In this event, the NDA or BLA must be resubmitted with the additional information. The
resubmitted application also is subject to review before the FDA accepts it for filing.
During the approval process, the FDA also will determine whether a risk evaluation and mitigation strategy
(“REMS”) is necessary to assure the safe use of the product. If the FDA concludes a REMS is needed, the sponsor of the
NDA or BLA must submit a proposed REMS, and the FDA will not approve the application without an approved REMS, if
required. A REMS can substantially increase the costs of obtaining approval. The FDA could also require a special
warning, known as a boxed warning, to be included in the product label in order to highlight a particular safety risk.
Once the submission is accepted for filing, the FDA begins an in-depth review. The FDA reviews an NDA to
determine, among other things, whether a product is safe and effective for its intended use, and a BLA to determine, among
other things, whether the product is safe, pure and potent for its intended use. As part of the NDA and BLA review, the
FDA also evaluates whether the manufacturing of the drug or biologic product candidate is cGMP-compliant to assure and
preserve the product’s identity, strength, quality, and purity. The FDA may refer the NDA or BLA to an advisory
committee for review and recommendation as to whether the application should be approved and under what conditions.
The FDA is not bound by the recommendation of an advisory committee, but it generally follows such recommendations.
NDAs and BLAs receive either standard or priority review. A drug or biological product candidate representing a
significant improvement in treatment, prevention or diagnosis of disease may receive priority review. A priority review
designation is intended to direct overall attention and resources to the evaluation of such applications, and to shorten the
FDA’s goal for taking action on the NDA or BLA from ten months to six months from filing of the NDA or BLA. After the
FDA evaluates the NDA or BLA and conducts inspections of manufacturing facilities where the drug or biological product
candidate and/or its active pharmaceutical ingredient will be produced, it may issue an approval letter or a Complete
Response Letter. An approval letter authorizes commercial marketing of the drug or biologic with specific prescribing
information for specific indications. A Complete Response Letter indicates that the review cycle of the application is
complete, and the application is not ready for approval. A Complete Response Letter may require additional clinical data
and/or an additional pivotal Phase 3 clinical trial(s), and/or other significant, expensive and time-consuming requirements
related to clinical trials, preclinical studies or manufacturing. Even if such data and information are submitted, the FDA
may ultimately decide that the NDA or BLA does not satisfy the criteria for approval.
Post-approval Requirements
Drugs and biologics manufactured or distributed pursuant to FDA approvals are subject to pervasive and
continuing regulation by the FDA and other governmental agencies, including, among other things, requirements relating
to recordkeeping, periodic reporting, product sampling and distribution, advertising and promotion, and reporting of
adverse experiences with the product. Once an approval is granted, the FDA may withdraw the approval if compliance with
regulatory requirements is not maintained or if problems occur after the product reaches the market. Later discovery of
previously unknown problems with a product may result in restrictions on the product or even complete withdrawal of the
product from the market. After approval, some types of changes to the approved product, such as adding new indications,
manufacturing changes and additional labeling claims, are subject to further FDA review and approval. There are also
continuing annual user fee requirements for products, as well as new application fees for certain supplemental applications.
In addition, the FDA may require testing and surveillance programs to monitor the effect of approved products that have
been commercialized, and the FDA has the power to prevent or limit further marketing of a product based on the results of
these post-marketing programs.
Drug and biologic manufacturers and other entities involved in the manufacture and distribution of approved
products are required to register their establishments with the FDA and certain state agencies and are subject to periodic
unannounced inspections by the FDA and some state agencies for compliance with GMP regulations and other laws. The
FDA has promulgated specific requirements for drug and biologic cGMPs. Changes to the manufacturing process are
strictly regulated and often require prior FDA approval before being implemented. FDA regulations also require
investigation and correction of any deviations from cGMP requirements and impose reporting and documentation
requirements upon the sponsor and any third-party manufacturers that the sponsor may decide to use. Accordingly,
manufacturers must continue to expend time, money, and effort in the area of production and quality control to maintain
cGMP compliance.

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Failure to comply with the applicable U.S. requirements at any time during the product development process or
approval process, or after approval, may subject us to administrative or judicial sanctions, any of which could have a
material adverse effect on us. These sanctions could include:
●
refusal to approve pending applications;
●
withdrawal of an approval;
●
imposition of a clinical hold;
●
warning letters;
●
product seizures or detention, or refusal to permit the import or export of products;
●
restrictions on the marketing or manufacturing of the product;
●
total or partial suspension of production or distribution or product recalls; or
●
injunctions, fines, disgorgement, or civil or criminal penalties.
The FDA strictly regulates the marketing, labeling, advertising and promotion of drug and biological products that
are placed on the market. Drugs and biologics may be promoted only for the approved indications and in accordance with
the provisions of the approved label. However, companies may share truthful and not misleading information that is
otherwise consistent with the product’s FDA approved labeling. The FDA and other agencies actively enforce the laws and
regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label
uses may be subject to significant liability. However, physicians may, in their independent medical judgment, prescribe
legally available products for off-label uses. The FDA does not regulate the behavior of physicians in their choice of
treatments, but the FDA does restrict sponsor communications on the subject of off-label use.
From time to time, legislation is drafted, introduced and passed in Congress that could significantly change the
statutory provisions governing the approval, manufacturing and marketing of products regulated by the FDA. In addition,
FDA regulations and guidance are often issued revised or reinterpreted by the agency in ways that may significantly affect
our business and our product candidates. It is impossible to predict whether legislative changes will be enacted, or whether
FDA regulations, guidance or interpretations will be issued or changed or what the impact of such changes, if any, may be.
Non-patent Exclusivity
The FDCA provides a five-year period of non-patent marketing exclusivity within the United States to the first
applicant to obtain approval of an NDA for a new chemical entity (“NCE”). A drug is an NCE if the FDA has not
previously approved any other new drug containing the same active moiety, which is the molecule or ion responsible for
the action of the drug substance. If market exclusivity is granted for an NCE, during the exclusivity period, the FDA may
not accept for review or approve an abbreviated new drug application (“ANDA”) or a 505(b)(2) NDA submitted by another
company for another version of such drug where the applicant does not own or have a legal right of reference to all the data
required for approval. However, an application may be submitted after four years if it contains a certification of patent
invalidity or non-infringement to one of the patents listed with the FDA by the innovator NDA holder.
The FDCA also provides three years of marketing exclusivity for an NDA, or supplement to an existing NDA if
new clinical investigations, other than bioavailability studies, that were conducted or sponsored by the applicant are
deemed by the FDA to be essential to the approval of the application, for example new indications, dosages, dosage forms
or strengths of an existing drug. This three-year exclusivity covers only the conditions associated with the new clinical
investigations and prohibits the FDA from approving an ANDA or a 505(b)(2) NDA submitted by another company with
overlapping conditions associated with the new clinical investigations for the three-year period. Clinical investigation
exclusivity does not prohibit the FDA from approving ANDAs for drugs containing the original active agent. Five-year and
three-year exclusivity will not delay the submission or approval of an NDA for the same drug. However, an applicant
submitting an NDA would be required to conduct or obtain a right of reference to all of the preclinical studies and adequate
and well-controlled clinical trials necessary to demonstrate safety and effectiveness.
Biosimilars and Exclusivity
The Biologics Price Competition and Innovation Act of 2009 (“BPCIA”) created an abbreviated approval pathway
in the PHSA for biological products that are biosimilar to or interchangeable with an FDA-licensed reference biological
product. Biosimilarity, which requires that there be no clinically meaningful differences between the biological

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product and the reference product in terms of safety, purity, and potency, can be shown through, as applicable, analytical
studies, animal studies, and a clinical study or studies. Interchangeability means that a product is biosimilar to the reference
product and can be expected to produce the same clinical results as the reference product in any given patient and, for
products that are administered multiple times to an individual, the biologic and the reference biologic may be alternated or
switched after one has been previously administered without increasing safety risks or risks of diminished efficacy relative
to exclusive use of the reference biologic.
Under the BPCIA, an application for a biosimilar product may not be submitted to the FDA until four years
following the date that the reference product was first licensed by the FDA. In addition, the approval of a biosimilar
product may not be made effective by the FDA until 12 years from the date on which the reference product was first
licensed. During this 12-year period of exclusivity, another company may still market a competing version of the reference
product if the FDA approves a full BLA for the competing product containing that applicant’s own preclinical data and
data from adequate and well-controlled clinical trials to demonstrate the safety, purity and potency of its product. The
BPCIA also established an exclusivity period for biosimilars approved as interchangeable products. Substitution at the
pharmacy level of biosimilar products deemed to be interchangeable is governed by state pharmacy law.
A biological product can also obtain pediatric market exclusivity in the United States. Pediatric exclusivity, if
granted, adds six months to existing exclusivity protection. This six-month exclusivity, which runs from the end of other
exclusivity protection, may be granted based on the voluntary completion of a pediatric study in accordance with an FDA-
issued “Written Request” for such a study.
Regulation Outside of the United States
Even if we obtain FDA approval for a drug or biological product candidate, we must obtain approval by the
comparable regulatory authorities of countries outside of the United States before we can commence clinical trials in such
countries, and our potential third-party partners must obtain approval of the regulators of such countries or economic areas,
such as the European Union, before they may market any of our product candidates in those countries or areas. The
approval process and requirements governing the conduct of clinical trials, product licensing and promotion, pricing and
reimbursement vary greatly by geographic region, and the time may be longer or shorter than that required for FDA
approval.
In the European Economic Area (“EEA”) which is composed of the Member States of the European Union plus
Norway, Iceland and Liechtenstein, medicinal products can only be commercialized after obtaining a Marketing
Authorization (“MA”).
There are two types of MAs:
●
The Community MA, which is issued by the European Commission through the Centralized Procedure, based on
the opinion of the Committee for Medicinal Products for Human Use (“CHMP”) of the European Medicines
Agency (“EMA”), and which is valid throughout the entire territory of the EEA. The Centralized Procedure is
mandatory for certain types of products, such as biotechnology medicinal products, orphan medicinal products,
and medicinal products indicated for the treatment of AIDS, cancer, neurodegenerative disorders, diabetes, auto-
immune and viral diseases. The Centralized Procedure is optional for products containing a new active substance
not yet authorized in the EEA, or for products that constitute a significant therapeutic, scientific or technical
innovation or which are in the interest of public health in the European Union. Under the Centralized Procedure,
the maximum timeframe for the evaluation of a marketing authorization application is 210 days (excluding clock
stops, when additional written or oral information is to be provided by the applicant in response to questions
asked by the CHMP). Accelerated evaluation might be granted by the CHMP in exceptional cases, when the
authorization of a medicinal product is of major interest from the point of view of public health and, in particular,
from the viewpoint of therapeutic innovation. Under the accelerated procedure, the standard 210 days review
period is reduced to 150 days.
●
National MAs, which are issued by the competent authorities of the Member States of the EEA and only cover
their respective territory, are available for products not falling within the mandatory scope of the Centralized
Procedure. Where a product has already been authorized for marketing in a Member State of the EEA, this
National MA can be recognized in another Member State through the Mutual Recognition Procedure. If the
product has not received a National MA in any Member State at the time of application, it can be approved
simultaneously in various Member States through the Decentralized Procedure.

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In the EEA, upon receiving marketing authorization, NCEs generally receive eight years of data exclusivity and
an additional two years of market exclusivity. If granted, data exclusivity prevents regulatory authorities in the EEA from
referencing the innovator’s data to assess a generic application. During the additional two-year period of market
exclusivity, a generic marketing authorization can be submitted, and the innovator’s data may be referenced, but no generic
product can be marketed until the expiration of the market exclusivity. However, there is no guarantee that a product will
be considered by the EEA’s regulatory authorities to be an NCE, and products may not qualify for data exclusivity.
Other Health Care Laws
Health care providers, physicians and third-party payors in the United States and elsewhere will play a primary
role in the recommendation and prescription of any of our product candidates for which marketing approval is obtained.
Our potential third-party partners’ arrangements with third-party payors, health care professionals and customers may
expose them to broadly applicable fraud and abuse and other health care laws and regulations, including, without
limitation, the federal Anti-Kickback Statute and the federal civil False Claims Act, that may constrain the business or
financial arrangements and relationships through which they sell, market and distribute any product candidates for which
marketing approval is obtained. In addition, we and our potential third-party partners may be subject to transparency laws
and patient privacy regulation by the federal government and by the U.S. states and foreign jurisdictions in which we or
they conduct business.
The federal Anti-Kickback Statute makes it illegal for any person or entity, including a prescription drug
manufacturer (or a party acting on its behalf) to knowingly and willfully, directly or indirectly, solicit, receive, offer, or pay
any remuneration that is intended to induce the referral of business, including the purchase, order, or lease of any good,
facility, item or service for which payment may be made under a federal health care program, such as Medicare or
Medicaid. The term “remuneration” has been broadly interpreted to include anything of value. The Anti-Kickback Statute
has been interpreted to apply to arrangements between pharmaceutical manufacturers on one hand and prescribers,
purchasers, formulary managers, and beneficiaries on the other. Although there are a number of statutory exceptions and
regulatory safe harbors protecting some common activities from prosecution, the exceptions and safe harbors are drawn
narrowly. Practices that involve remuneration that may be alleged to be intended to induce prescribing, purchases or
recommendations may be subject to scrutiny if they do not qualify for an exception or safe harbor. Failure to meet all of the
requirements of a particular applicable statutory exception or regulatory safe harbor does not make the conduct per se
illegal under the Anti-Kickback Statute. Instead, the legality of the arrangement will be evaluated on a case-by-case basis
based on a cumulative review of all its facts and circumstances. Several courts have interpreted the statute’s intent
requirement to mean that if any one purpose of an arrangement involving remuneration is to induce referrals of federal
health care covered business, the Anti-Kickback Statute has been violated. Violations of this law are punishable by up to
ten years in prison, and can also result in criminal fines, civil monetary penalties, administrative penalties and exclusion
from participation in federal health care programs.
Additionally, the intent standard under the Anti-Kickback Statute was amended by the Patient Protection and
Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively, the
“Affordable Care Act”), to a stricter standard such that a person or entity no longer needs to have actual knowledge of the
statute or specific intent to violate it in order to have committed a violation. In addition, the Affordable Care Act codified
case law that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes
a false or fraudulent claim for purposes of the federal civil False Claims Act.
Federal false claims and false statement laws, including the federal civil False Claims Act, prohibits, among other
things, any person or entity from knowingly presenting, or causing to be presented, for payment to, or approval by, federal
programs, including Medicare and Medicaid, claims for items or services, including drugs, that are false or fraudulent or
not provided as claimed. Entities can be held liable under these laws if they are deemed to “cause” the submission of false
or fraudulent claims by, for example, providing inaccurate billing or coding information to customers, promoting a product
off-label, or for providing medically unnecessary services or items. In addition, activities relating to the sale and marketing
of products are subject to scrutiny under this law. Penalties for federal civil False Claims Act violations may include up to
three times the actual damages sustained by the government, plus mandatory civil penalties for each separate false claim,
the potential for exclusion from participation in federal health care programs, and, although the federal civil False Claims
Act is a civil statute, False Claims Act violations may also implicate various federal criminal statutes.  

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The federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) prohibits among other
actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any health care benefit program,
including private third-party payors, knowingly and willfully embezzling or stealing from a health care benefit program,
willfully obstructing a criminal investigation of a health care offense, and knowingly and willfully falsifying, concealing or
covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery
of or payment for health care benefits, items or services. Like the Anti-Kickback Statute, the Affordable Care Act amended
the intent standard for the health care fraud statute under HIPAA such that a person or entity no longer needs to have actual
knowledge of the statute or specific intent to violate it in order to have committed a violation.
The civil monetary penalties statute imposes penalties against any person or entity that, among other things, is
determined to have presented or caused to be presented a claim to a federal health program that the person knows or should
know is for an item or service that was not provided as claimed or is false or fraudulent.
Also, many states have similar fraud and abuse statutes or regulations that may be broader in scope and may apply
regardless of payor, in addition to items and services reimbursed under Medicaid and other state programs. Additionally, to
the extent that a product is sold in a foreign country, the seller may be subject to similar foreign laws.
In addition, legislation imposing marketing restrictions and transparency requirements on pharmaceutical
manufacturers has been enacted at the state and federal levels. For example, the Affordable Care Act imposed, among other
things, annual reporting requirements to the Centers for Medicare & Medicaid Services (“CMS”) for covered
manufacturers for certain payments and other transfers of value provided to physicians (defined to include doctors, dentists,
optometrists, podiatrists and chiropractors), other health care professionals (such as physician assistants and nurse
practitioners) and teaching hospitals, as well as information regarding ownership and investment interests held by
physicians and their immediate family members. Failure to submit timely, accurately and completely the required
information for all payments, transfers of value and ownership or investment interests may result in civil monetary
penalties for “knowing failures.”  Certain states also mandate implementation of compliance programs, impose restrictions
on drug manufacturer marketing practices, require registration of certain employees engaged in marketing activities in the
location, and/or require the tracking and reporting of gifts, compensation and other remuneration to health care
professionals, including physicians.
We have developed a comprehensive compliance program that establishes internal controls to facilitate adherence
to the rules and program requirements to which we are subject. Although the development and implementation of
compliance programs designed to establish internal controls and facilitate compliance can mitigate the risk of investigation,
prosecution, and penalties assessed for violations of these laws, or any other laws that may apply to us, the risks cannot be
entirely eliminated. If our operations are found to be in violation of any such laws or any other governmental regulations,
we may be subject to significant penalties, including, without limitation, administrative, civil, and criminal penalties,
damages, fines, disgorgement, imprisonment, contractual damages, reputational harm, diminished profits and future
earnings, the curtailment or restructuring of our operations, exclusion from participation in federal and state health care
programs, 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 individual imprisonment, any of which
could adversely affect our ability to operate our business and our financial results.
We may also be subject to data privacy and security regulation by both the federal government and the states in
which we conduct our business. HIPAA, as amended by the Health Information Technology for Economic and Clinical
Health Act (“HITECH”) and their implementing regulations, including the final omnibus rule published on January 25,
2013, mandates, among other things, the adoption of uniform standards for the electronic exchange of information in
common health care transactions, as well as standards relating to the privacy and security of individually identifiable health
information, which require the adoption of administrative, physical and technical safeguards to protect such information.
Among other things, HITECH makes HIPAA’s security standards directly applicable to “business associates,” namely
independent contractors or agents of HIPAA covered entities that create, receive or obtain protected health information in
connection with providing a service for or on behalf of a covered entity and their subcontractors that use, disclose, access,
or otherwise process protected health information. HITECH also increased the civil and criminal penalties that may be
imposed against covered entities and business associates and gave state attorneys general new authority to file civil actions
for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorneys’ fees and costs
associated with pursuing federal civil actions. In addition, certain state laws govern the privacy and security of health
information in certain circumstances, some of which are more stringent than HIPAA and many of which differ from each

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other in significant ways and may not have the same effect, thus complicating compliance efforts. Failure to comply with
these laws, where applicable, can result in the imposition of significant civil and/or criminal penalties.
Health Care Reform
In the United States, there have been and continue to be a number of significant legislative initiatives to contain
health care costs. For example, in March 2010, the Affordable Care Act was passed, which has had, and is expected to
continue to have, a significant impact on the health care industry. The Affordable Care Act was designed to expand
coverage for the uninsured and at the same time contain overall health care costs.
There have been executive branch, judicial and Congressional challenges and amendments to certain aspects of
the Affordable Care Act. On August 16, 2022, the Inflation Reduction Act of 2022 (“IRA”) was signed into law, which
among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in Affordable Care
Act marketplaces through plan year 2025. The IRA also eliminates the “donut hole” under the Medicare Part D program
beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and through a newly established
manufacturer discount program. It is possible that the Affordable Care Act will be subject to additional challenges and
amendments in the future. It is unclear how such challenges and any additional health care reform measures of the second
Trump administration will impact the Affordable Care Act and our business.
In addition, other legislative changes have been proposed and adopted since the Affordable Care Act was enacted.
For example, in August 2011, President Obama signed into law the Budget Control Act of 2011, which, among other
things, created the Joint Select Committee on Deficit Reduction to recommend to Congress proposals in spending
reductions. The Joint Select Committee on Deficit Reduction did not achieve a targeted deficit reduction of at least $1.2
trillion for fiscal years 2012 through 2021, triggering the legislation’s automatic reduction to several government programs.
This includes aggregate reductions in Medicare payments to providers of 2% per fiscal year, which went into effect
beginning on April 1, 2013 and, due to subsequent legislative amendments to the statute, will stay in effect through 2032
unless additional Congressional action is taken.
Legislative and regulatory proposals have been made to expand post-approval requirements and restrict sales and
promotional activities for drug and biologic products. For example, the IRA, among other things, (1) directs the
Department of Health and Human Services (“HHS”) to negotiate the price of certain single-source drugs and biologics that
have been on the market for at least 7 years covered under Medicare (the “Medicare Drug Price Negotiation Program”) and
(2) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation. These
provisions took effect progressively starting in fiscal year 2023, although the Medicare Drug Price Negotiation Program is
currently subject to legal challenges. On August 15, 2024, HHS announced the agreed-upon prices of the first ten drugs
that were subject to price negotiations, which take effect in January 2026. HHS will select up to fifteen additional products
covered under Part D for negotiation in 2025. Each year thereafter more Part B and Part D products will become subject to
the Medicare Drug Price Negotiation Program. On December 7, 2023, the Biden administration announced an initiative to
control the price of prescription drugs through the use of march-in rights under the Bayh-Dole Act. On December 8, 2023,
the National Institute of Standards and Technology published for comment a Draft Interagency Guidance Framework for
Considering the Exercise of March-In Rights which for the first time includes the price of a product as one factor an
agency can use when deciding to exercise march-in rights. While march-in rights have not previously been exercised, it is
uncertain if that will continue under the new framework. The effect of reducing prices and reimbursement for certain of our
product candidates, if approved, could significantly impact our business and consolidated results of operations. In addition,
the IRA may meaningfully influence our pharmaceutical industry business strategies. In particular, it may reduce the
attractiveness of investment in small molecule and biologic innovation.
At the state level, legislatures have become increasingly active in passing legislation and implementing
regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement
constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and,
in some cases, designed to encourage importation from other countries and bulk purchasing. For example, on January 5,
2024, the FDA approved Florida’s proposal to import certain drugs from Canada for specific state healthcare programs. It
is unclear if and how this program will be implemented and whether it will be subject challenges in the United States or
Canada. Other states have also submitted proposals that are pending review by the FDA. Any such approved importation
plans, if implemented, may result in lower drug prices for products covered by those programs.

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The Affordable Care Act, the IRA, as well as other federal and state health care reform measures that have been
and may be adopted in the future, could harm our future revenue. Additional legislative actions may be taken in the future
which may change current regulations, guidance and interpretations. The impact of such actions on our business, if any,
cannot presently be determined.
The Hatch Waxman Amendments to the FDCA
Orange Book Listing
In seeking approval for a drug through an NDA, applicants are required to list with the FDA each patent whose
claims cover the applicant’s product or a method of using the product. Upon approval of a drug, each of the patents listed in
the application for the drug is then published in the FDA’s Approved Drug Products with Therapeutic Equivalence
Evaluations, commonly known as the Orange Book. Drugs listed in the Orange Book can, in turn, be cited by potential
competitors in support of approval of an ANDA or an application covered by Section 505(b)(2) of the FDCA. An ANDA
provides for marketing of a drug product that has the same active ingredients, generally in the same strengths and dosage
form, as the listed drug and has been shown through PK testing to be bioequivalent to the listed drug. Drugs approved in
this way are commonly referred to as “generic equivalents” to the listed drug and can often be substituted by pharmacists
under prescriptions written for the original listed drug. Other than the requirement for bioequivalence testing, ANDA
applicants are generally not required to conduct, or submit results of, preclinical studies or clinical tests to prove the safety
or effectiveness of their drug product. Section 505(b)(2) applications provide for marketing of a drug product that may
have the same active ingredients as the listed drug and contains full safety and effectiveness data as an NDA, but at least
some of this information comes from studies not conducted by or for the applicant. This alternate regulatory pathway
enables the applicant to rely, in part, on the FDA’s findings of safety and efficacy for an existing product, or published
literature, in support of its application. The FDA may then approve the new product candidate for all or some of the labeled
indications for which the referenced product has been approved, as well as for any new indication sought by the 505(b)(2)
applicant.
The ANDA or Section 505(b)(2) applicant is required to certify to the FDA concerning any patents listed for the
approved product in the FDA’s Orange Book. Specifically, the applicant must certify that: (i) the required patent
information has not been filed; (ii) the listed patent has expired; (iii) the listed patent has not expired, but will expire on a
particular date and approval is sought after patent expiration; or (iv) the listed patent is invalid or will not be infringed by
the new product. The ANDA or Section 505(b)(2) applicant may also elect to submit a statement certifying that its
proposed ANDA label does not contain, or carves out, any language regarding a patented method of use rather than certify
to such listed method of use patent. If the applicant does not challenge the listed patents by filing a certification that the
listed patent is invalid or will not be infringed by the new product, the ANDA or Section 505(b)(2) application will not be
approved until all the listed patents claiming the referenced product have expired.
A certification that the new product will not infringe the already approved product’s listed patents, or that such
patents are invalid, is called a Paragraph IV certification. If the ANDA or Section 505(b)(2) applicant has provided a
Paragraph IV certification to the FDA, the applicant must also send notice of the Paragraph IV certification to the NDA
and patent holders once the ANDA or Section 505(b)(2) application has been accepted for filing by the FDA. The NDA
and patent holders may then initiate a patent infringement lawsuit in response to the notice of the Paragraph  IV
certification. The filing of a patent infringement lawsuit within 45  days of the receipt of a Paragraph  IV certification
automatically prevents the FDA from approving the ANDA or Section 505(b)(2) application until the earliest of 30 months,
expiration of the patent, settlement of the lawsuit, and a decision in the infringement case that is favorable to the ANDA or
Section 505(b)(2) applicant. This prohibition is generally referred to as the 30-month stay. Thus, approval of an ANDA or
505(b)(2) NDA could be delayed for a significant period of time depending on the patent certification the applicant makes
and the reference drug sponsor’s decision to initiate patent litigation.
The ANDA or Section 505(b)(2) application also will not be approved until any applicable non-patent exclusivity
listed in the Orange Book for the referenced product has expired.
Patent Term Extension
In the United States, after NDA approval or BLA licensure, owners of relevant drug patents may apply for up to a
five-year patent extension, which provides patent term restoration as compensation for the patent term lost during the FDA
regulatory review process for the first permitted commercial marketing of a drug product. The Drug Price Competition and
Patent Term Restoration Act of 1984 (the “Hatch-Waxman Act”), permits a patent term extension of up

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to five years beyond the expiration of the patent. The allowable patent term extension is calculated as half of the drug’s
testing phase, which is the time between the IND submission becoming effective and the NDA or BLA submission, and all
of the review phase, which is the time between NDA or BLA submission and approval, up to a maximum extension of five
years. The time can be shortened if the FDA determines that the applicant did not pursue approval with due diligence.
Patent extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval
and only one patent applicable to an approved drug may be extended.
Similar provisions are available in the European Union and other foreign jurisdictions to extend the term of a
patent that covers an approved drug. For example, in Japan, it may be possible to extend the patent term for up to five years
and in the European Union, it may be possible to obtain a supplementary patent certificate that would effectively extend
patent protection for up to five years.
Coverage and Reimbursement
We believe the success of our product candidates, if approved, will depend on obtaining and maintaining coverage
and adequate reimbursement as a prescription treatment or in the absence of coverage and adequate reimbursement, on the
extent to which patients will be willing to pay out of pocket for our prescription drug products.
Third-party payors determine which prescription drug products they will cover and establish reimbursement
levels. Reimbursement by a third-party payor may depend upon a number of factors, including: the third-party payor’s
determination that a product is safe, effective, and medically necessary; appropriate for the specific patient; cost-effective;
supported by peer-reviewed medical journals or current clinical practice guidelines; and whether there are competitive
products, either branded or generic, and the pricing of those products.  Many private third-party payors, such as managed
care plans, manage access to drug products’ coverage partly to control costs for their plans, and may use drug formularies
and medical policies to limit their exposure. Obtaining and maintaining favorable reimbursement can be a time-consuming
and expensive process, and our potential third-party partners may not be able to negotiate or continue to negotiate
reimbursement or pricing terms for our product candidates, if approved, with third-party payors at levels that are profitable
to us, or at all. Further coverage policies and third-party reimbursement rates may change at any time. Even if favorable
coverage and reimbursement status is attained for one or more products which receive regulatory approval, less favorable
coverage policies and reimbursement rates may be implemented in the future.
In addition to uncertainties surrounding coverage policies, there are periodic changes to reimbursement. Third-
party payors regularly update reimbursement amounts and also from time to time revise the methodologies used to
determine reimbursement amounts. Accordingly, these updates could impact the demand for our product candidates, if
approved. Our product candidates, if approved, may not be considered cost effective, and government and third-party
private health insurance coverage and reimbursement may not be available to patients or sufficient to allow our potential
third-party partners to sell our product candidates, if approved, on a competitive and profitable basis. For example, the
IRA, among other things, (1) directs HHS to negotiate the price of certain single-source drugs and biologics that have been
on the market for at least 7 years covered under Medicare, and (2) imposes rebates under Medicare Part B and Medicare
Part D to penalize price increases that outpace inflation. Our results of operations could be adversely affected by the
Affordable Care Act, the IRA and by other health care reforms that may be enacted or adopted in the future, particularly in
light of the recent U.S. Presidential and Congressional elections. In addition, increasing emphasis on managed care in the
United States will continue to put pressure on the pricing of pharmaceutical products. Cost control initiatives could
decrease the price that our potential third-party partners could receive for any of our product candidates, if approved, and
could adversely affect our profitability. We cannot predict how pending and future health care legislation will impact our
business, and any changes in coverage and reimbursement that further restricts coverage of our product candidates could
harm our business.
Foreign governments also have their own health care reimbursement systems, which vary significantly by country
and region, and we cannot be sure that coverage and adequate reimbursement will be made available with respect to our
product candidates, if approved, under any foreign reimbursement system. In some foreign countries, including major
markets in the European Union and Japan, the pricing of prescription pharmaceuticals is subject to governmental control.
In these countries, pricing negotiations with governmental authorities can take up to 12 months or longer after the receipt
of regulatory marketing approval for a product. To obtain reimbursement or pricing approval in some countries, we may be
required to conduct a pharmacoeconomic study that compares the cost-effectiveness of our product to other available
therapies. Such pharmacoeconomic studies can be costly and the results uncertain. Our business could be harmed if
reimbursement of our product candidates, if approved, is unavailable or limited in scope or amount or if pricing is set at
unsatisfactory levels.

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Employees and Human Capital Resources
As of December 31, 2024, we had 64 total employees, of which 61 were full-time employees. All of our
employees are located in the United States. None of our employees are represented by a labor union or covered by a
collective bargaining agreement. We consider our relationship with our employees to be good.
Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and
integrating our existing and new employees, advisors and consultants. The principal purposes of our equity incentive plans
are to attract, retain and reward personnel through the granting of stock-based compensation awards in order to increase
stockholder value and the success of our company by motivating such individuals to perform to the best of their abilities
and achieve our objectives.
Corporate Information
We were incorporated under the laws of the State of Delaware in July 2012. Our principal executive offices are
located at 701 Lee Road, Suite 103, Wayne, PA 19087. Our telephone number is (484) 324-7933. Our common stock is
listed on the Nasdaq Global Select Market under the symbol “ACRS.”
Available Information
Our internet website address is www.aclaristx.com. In addition to the information contained in this Annual Report,
information about us can be found on our website. Our website and information included in or linked to our website are not
part of this Annual Report.
Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments
to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are available free of charge
through our website as soon as reasonably practicable after they are electronically filed with or furnished to the Securities
and Exchange Commission (“SEC”).  The SEC also maintains a website that contains our reports, proxy and information
statements and other information. The address of the SEC’s website is www.sec.gov.

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Item 1A. Risk Factors
Our business is subject to numerous risks. You should carefully consider the following risks and all other
information contained in this Annual Report, as well as general economic and business risks, together with any other
documents we file with the SEC. If any of the following events actually occur or risks actually materialize, it could have a
material adverse effect on our business, operating results and financial condition and cause the trading price of our
common stock to decline.
Summary of Risk Factors
 
●
We have incurred significant losses since our inception. We expect to incur losses over the next several years
and may never achieve or maintain profitability.
●
We will need substantial additional funding to meet our financial obligations and to pursue our business
objectives. If we are unable to raise capital when needed, we could be forced to curtail our planned
operations.
●
We have a limited history as a clinical-stage biopharmaceutical company developing and partnering our
product candidates, which may make it difficult to evaluate the success of our business to date and to assess
our future viability.
●
If we are unable to successfully develop our product candidates and to pursue strategic alternatives, including
identifying and consummating transactions with third-party partners, to further develop, obtain marketing
approval for and/or commercialize our product candidates, or experience significant delays in doing so, our
business will be harmed.
●
Our future success depends on our ability to retain key executives and to attract, retain and motivate qualified
personnel.
●
We rely heavily on third parties for clinical trials, manufacturing, and development support. Their
performance impacts our timelines and success.
●
If we are unable to obtain and maintain patent protection for our product candidates, or if the scope of the
patent protection obtained is not sufficiently broad, our competitors could develop and commercialize
technology and drugs similar or identical to ours, and our ability to successfully pursue strategic alternatives,
including identifying and consummating transactions with potential third-party partners, to commercialize
our technology and product candidates may be impaired.
●
We face substantial competition, which may result in others discovering, developing or commercializing
drugs before or more successfully than we do.
Risks Related to Our Business, Our Financial Position and Capital Needs
We have incurred significant losses since our inception. We expect to incur losses over the next several years
and may never achieve or maintain profitability.
Since inception, we have incurred significant net losses. We incurred net losses of $132.1 million and $88.5
million for the years ended December 31, 2024 and 2023, respectively. As of December 31, 2024, we had an accumulated
deficit of $902.9 million. We have financed our operations over the last several years primarily from sales of equity
securities and incurring indebtedness in the form of loans from commercial lenders.
We have devoted substantially all of our financial resources and efforts to the development of our product
candidates, including preclinical studies and clinical trials. Our net losses may fluctuate significantly from quarter to
quarter and year to year. We expect to continue to incur significant expenses and operating losses in the near term as we:
●
pursue strategic alternatives, including identifying and seeking to consummate transactions with third-party
partners, to further develop, obtain marketing approval for and/or commercialize our product candidates;
●
continue to develop our product candidates;
●
continue to discover and develop additional product candidates;
●
maintain, expand and protect our intellectual property portfolio; and
●
incur legal, accounting, investor relations and other administrative expenses in operating as a public
company.

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To become and remain profitable, we must succeed in a range of challenging activities, including completing
preclinical testing and clinical trials of our product candidates and pursuing strategic alternatives, including identifying and
consummating transactions with third-party partners, for the further development and/or commercialization of our product
candidates, as well as discovering and developing additional product candidates. We are in the early stages of most of these
activities. We may never succeed in these activities and, even if we do, may never earn revenue from our product
candidates that is significant enough to achieve profitability.
For any of our product candidates, our revenue will be dependent, in part, upon our ability to identify and
consummate transactions with third-party partners to further develop, obtain marketing approval for and/or commercialize
those product candidates. Further, we will be dependent on our potential third-party partners’ ability to obtain marketing
approval and successfully commercialize the product, upon the size of the markets in the territories where marketing
approval is obtained, the accepted price for the product, and the ability to obtain coverage and reimbursement, if any. If we
fail to identify and enter into partnerships with third parties to further develop, obtain marketing approval for and/or
commercialize our product candidates, any partnerships we enter into do not result in the successful development,
marketing approval for and commercialization of our product candidates, the number of addressable patients is not as
significant as estimated by our potential third-party partners, the indication approved by regulatory authorities is narrower
than expected, or the treatment population is narrowed by competition, physician choice or treatment guidelines, we may
not earn significant revenue from agreements with potential third-party partners for such product candidates, even if the
product candidates are approved for marketing. 
Because of the numerous risks and uncertainties associated with drug development, we are unable to accurately
predict the timing or amount of expenses or when, or if, we will be able to achieve profitability. If we are required by
regulatory authorities to perform studies in addition to those expected, or if there are any delays in the initiation and
completion of our clinical trials, the development of any of our product candidates or the identification and consummation
of transactions with third-party partners to further develop, obtain marketing approval for and/or commercialize our
product candidates, our expenses could increase.
Even if we achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual
basis. Our failure to become and remain profitable would depress the value of our company and could impair our ability to
raise capital, expand our business, maintain our development efforts or continue our operations. A decline in the value of
our company could also cause you to lose all or part of your investment.
We will need substantial additional funding to meet our financial obligations and to pursue our business
objectives. If we are unable to raise capital when needed, we could be forced to curtail our planned operations. 
Identifying potential product candidates and conducting preclinical testing and clinical trials is a time-consuming,
expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results
required to identify and consummate transactions with third-party partners to further develop, obtain marketing approval
for and/or commercialize our product candidates. We expect to incur significant expenses and operating losses for the
foreseeable future as we advance our product candidates from discovery through preclinical and clinical development. In
addition, we may not be able to identify and consummate transactions with third-party partners to further develop, obtain
marketing approval for and/or commercialize our product candidates, and our product candidates, if approved, may not
achieve commercial success. Furthermore, we incur and expect to continue to incur significant costs associated with
operating as a public company, including legal, accounting, investor relations and other expenses.
As of December 31, 2024, we had cash, cash equivalents and marketable securities of $203.9 million. We believe
that our existing cash, cash equivalents and marketable securities as of the date of this Annual Report will enable us to fund
our operating expenses and capital expenditure requirements for a period greater than 12 months from the date of this
report based on our current operating assumptions. These assumptions may prove to be wrong, and we could use our
available capital resources sooner than we expect. Changes may occur beyond our control that would cause us to consume
our available capital before that time, including changes in and progress of our development activities, acquisitions of
products or product candidates, and changes in regulation. Our future capital requirements will depend on many factors,
including:
●
the number and development requirements of the product candidates that we may pursue;
●
the scope, progress, results and costs of preclinical development, laboratory testing and conducting
preclinical and clinical trials for our product candidates;

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●
the costs, timing and outcome of regulatory review of our product candidates;
●
the extent to which we in-license or acquire product candidates and technologies;
●
the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our
intellectual property rights and defending any intellectual property-related claims;
●
our ability to identify and consummate transactions with third-party partners to further develop, obtain
marketing approval for and/or commercialize our product candidates; and
●
our ability to earn revenue from licenses to, or partnerships or other arrangements with, third parties.
We will require additional capital to develop our product candidates and to support our discovery efforts.
Additional funds may not be available on a timely basis, on commercially acceptable terms, or at all, and such funds, if
raised, may not be sufficient to enable us to continue to implement our long-term business strategy. Our ability to raise
additional capital may be adversely impacted by potential worsening global economic conditions caused by a variety of
factors including geopolitical tensions and inflationary pressures. If we are unable to raise sufficient additional capital or
generate revenue from transactions with potential third-party partners for the development and/or commercialization of our
product candidates, we could be forced to curtail our planned operations.
Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to
relinquish rights to our technologies, intellectual property, potential future revenue streams or product candidates.
Until such time, if ever, as we can earn substantial revenue, we expect to finance our cash needs through a
combination of equity offerings, debt financings and license and partnership agreements. To the extent that we raise
additional capital through the sale of equity securities or convertible debt securities, our stockholders’ ownership interest
will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights
of holders of our common stock. Debt financing and preferred equity financing, if available, may involve agreements that
include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making
capital expenditures or declaring dividends.
If we raise additional funds through partnerships, strategic alliances or marketing, distribution or licensing
arrangements with potential third-party partners, we may be required to relinquish valuable rights to our technologies,
intellectual property, potential future revenue streams, or product candidates or grant licenses on terms that may not be
favorable to us. If we are unable to raise additional funds through equity or debt financings or other arrangements with
third parties when needed, we may be required to delay, limit, reduce or terminate our drug development efforts or grant
rights to third parties to develop technologies, intellectual property, or product candidates that we would otherwise prefer to
develop ourselves.
We have a limited history as a clinical-stage biopharmaceutical company developing and partnering our
product candidates, which may make it difficult to evaluate the success of our business to date and to assess our future
viability.
Our operations over the last several years have been largely focused on undertaking preclinical studies and
conducting clinical trials, drug discovery, acquiring new product candidates and related intellectual property, and raising
capital. We have had limited time to demonstrate our ability to successfully develop, manufacture and identify and
consummate transactions with third-party partners to further develop, obtain marketing approval for and/or commercialize
our product candidates. Consequently, any predictions you make about our future success or viability may not be as
accurate as they could be if we had a longer history of being a clinical-stage biopharmaceutical company focused on
developing and partnering product candidates. We may also encounter unforeseen expenses, difficulties, complications,
delays and other known or unknown factors in achieving our business objectives.
Certain estimates of market opportunity and forecasts may prove to be smaller than we believe.
The estimates of market opportunity and forecasts of market growth included in documents that we file with the
SEC may prove to be smaller than we believe, and even if the markets in which we compete achieve the forecasted growth,
our business may not grow at similar rates, or at all. Our projections of addressable patient populations within the
indications we pursue are based on our estimates and independent market research, industry and general publications
obtained from third parties. Market opportunity estimates and growth forecasts included in this Annual Report and the
other documents that we file with the SEC are subject to significant uncertainty and are based on assumptions and
estimates. These estimates, which have been derived from a variety of sources, including scientific literature and market

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research, may prove to be incorrect. Further, new studies may change the estimated incidence or prevalence of these
indications. Additionally, the potentially addressable patient population may not ultimately be amenable to treatment with
our product candidates. Our market opportunity may also be limited by current and future products of our competitors that
are already available in the market or may enter the market for such patients. If any of our estimates prove to be inaccurate,
the market opportunity for our product candidates could be significantly diminished and have an adverse material impact
on our business.
Risks Related to the Development and Potential Commercialization of Our Product Candidates
Biologics carry unique risks and uncertainties, which could have a negative impact on future results of
operations.
The successful discovery, development, manufacturing and sale of biologics is a long, expensive and uncertain
process. There are unique risks and uncertainties with biologics. For example, access to and supply of necessary biological
materials, such as cell lines, may be limited and governmental regulations restrict access to and regulate the transport and
use of such materials. In addition, the development, manufacturing and sale of biologics is subject to regulations that are
often more complex and extensive than the regulations applicable to other pharmaceutical products. Manufacturing
biologics, especially in large quantities, is often complex and may require the use of innovative technologies. The types of
analytical development data necessary for verifying structural biocomparability when changing manufacturing sites is also
more difficult and complex to generate for biologics than for other pharmaceutical products. Such manufacturing also
requires facilities specifically designed and validated for this purpose and sophisticated quality assurance and quality
control procedures. Biologics are also frequently costly to manufacture because production inputs are derived from living
animal or plant material, and some biologics cannot be made synthetically. In addition, the regulatory scrutiny of and
landscape for the chemistry, manufacturing and analytical controls information is also considered to be more complex for
biologics  than other pharmaceutical products. Failure to successfully discover, develop and manufacture our biological
product candidates would adversely impact our business and future results of operations.
We may not be successful in our efforts to identify and develop additional product candidates, including through
leveraging our KINect drug discovery platform.  
A key element of our approach is to identify and develop additional novel product candidates, including through
leveraging our KINect drug discovery engine. Our platform is powered by a unique combination of our proprietary
chemical library of kinase inhibitors, our novel approaches to inhibitor modalities, our expertise in SBDD, and our custom
kinase assays. Our ability to identify and develop additional product candidates is subject to numerous risks, including that:
●
our drug discovery methods and our KINect platform may not be successful in identifying additional product
candidates;
●
our discovery programs may initially show promise in identifying potential product candidates, yet fail to yield
product candidates for clinical development; and
●
potential product candidates may, on further study, be shown to have harmful side effects or other characteristics
that indicate that they are unlikely to be product candidates that will receive marketing approval and achieve
market acceptance.
In addition, discovery programs require substantial technical, financial and human resources. We may not be able
to maintain sufficient resources and expertise to discover additional product candidates. It could take years to identify a
viable product candidate, and there is a risk that we may never do so. If we are unable to identify successful product
candidates for preclinical and clinical development and regulatory approval in a timely matter or at all, we could
experience significant delays or an inability to successfully pursue strategic alternatives, including identifying and
consummating transactions with third-party partners, to further develop, obtain marketing approval for and/or
commercialize our product candidates, which could harm our business.

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If we are unable to successfully develop our product candidates and to pursue strategic alternatives, including
identifying and consummating transactions with third-party partners, to further develop, obtain marketing approval for
and/or commercialize our product candidates, or experience significant delays in doing so, our business will be harmed.
We have invested significant efforts and financial resources in the development of our product candidates and the
identification of potential product candidates. Our ability to earn substantial revenue from our product candidates will
depend heavily on our ability to successfully develop and pursue strategic alternatives, including identifying and
consummating transactions with third-party partners, to further develop, obtain marketing approval for and/or
commercialize these product candidates. The success of any product candidates that we develop will depend on several
factors, including:
●
successful completion of preclinical studies and our clinical trials;
●
successful development of manufacturing processes;
●
receipt of timely approvals from applicable regulatory authorities;
●
the identification and consummation of transactions with third-party partners to further develop, obtain
marketing approval for and/or commercialize our product candidates;
●
the commercial launch of our product candidates, if approved, by a potential third-party partner;
●
our potential third-party partners’ ability to achieve acceptance of our product candidates, if approved, by
patients, the medical community and third-party payors, and willingness of patients to pay out of pocket for
our product candidates when third-party payor coverage and reimbursement is limited or unavailable;
●
our potential third-party partners’ ability to achieve success in educating physicians and patients about the
benefits, administration and use of our product candidates, if approved;
●
the prevalence and severity of adverse events experienced with our product candidates;
●
the availability, perceived advantages, cost, safety and efficacy of alternative treatments for the proposed
indications of our product candidates;
●
obtaining and maintaining patent, trademark and trade secret protection and regulatory exclusivity for our
product candidates and otherwise protecting the intellectual property portfolio;
●
maintaining compliance with regulatory requirements, including cGMPs;
●
our potential third-party partners’ ability to compete effectively with other treatment procedures; and
●
our potential third-party partners’ ability to maintain a continued acceptable safety, tolerability and efficacy
profile of our product candidates following marketing approval.
Whether marketing approval will be granted is unpredictable and depends upon numerous factors, including the
substantial discretion of the regulatory authorities. Our product candidates’ success in clinical trials will not guarantee
marketing approval. Following submission, the NDA or BLA for any product candidate may not be accepted for
substantive review, or even if it is accepted for substantive review the FDA or other comparable foreign regulatory
authorities may require additional studies or clinical trials, additional data, or additional manufacturing steps, or require
other conditions before they will reconsider or approve the application, which could increase costs and cause delays in the
marketing approval process and which may require the expenditure of additional resources. These delays would also
impact our ability to identify and consummate transactions with third-party partners to further develop, obtain marketing
approval for and/or commercialize our product candidates. In addition, the FDA or other comparable foreign regulatory
authorities may not consider sufficient any additional required studies, clinical trials, data or information that we perform
and complete or generate, or we may decide to abandon the program.
It is possible that our product candidates currently in development will never obtain marketing approval. If we do
not achieve one or more of these factors in a timely manner or at all, we could experience significant delays or an inability
to successfully pursue strategic alternatives, including identifying and consummating transactions with third-party partners,
to further develop, obtain marketing approval for and/or commercialize our product candidates, which would harm our
business.

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Clinical drug development involves a lengthy and expensive process, with an uncertain outcome. We may incur
additional costs or experience delays in completing, or ultimately be unable to complete, the development of our product
candidates or pursuing strategic alternatives, including identifying and consummating transactions with third-party
partners, to further develop, obtain marketing approval for and/or commercialize our product candidates.
The risk of failure for our product candidates is high. It is impossible to predict when or if any of our product
candidates will prove effective or safe in humans or will receive marketing approval. Before obtaining regulatory approval
for the sale of any product candidate, we must complete preclinical development and then conduct extensive clinical trials
to demonstrate the safety and efficacy of our product candidates in humans for use in the target indication. Clinical testing
is expensive, difficult to design and implement, can take many years to complete and is inherently uncertain as to outcome.
A failure of one or more clinical trials can occur at any stage of testing. For example, in 2023 we announced that
zunsemetinib failed to meet the endpoints in Phase 2 trials in rheumatoid arthritis and hidradenitis suppurativa, following
which we discontinued further development of our MK2 inhibitor programs in immuno-inflammatory diseases. The
outcome of preclinical testing and early clinical trials may not be predictive of the success of later clinical trials, and
interim results of a clinical trial do not necessarily predict final results. Moreover, preclinical and clinical data are often
susceptible to varying interpretations and analyses, and many companies that have believed their product candidates
performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketing approval of
their drugs.
Additionally, we may utilize an “open-label” clinical trial design. For example, our current Phase 2a trial of ATI-
2138 is an “open-label” trial. An “open-label” clinical trial is one where both the patient and investigator know whether the
patient is receiving the investigational product candidate or either an existing approved drug or placebo. Most open-label
clinical trials test only the investigational product candidate and sometimes may do so at different dose levels. Open-label
clinical trials are subject to various limitations that may exaggerate any therapeutic effect as patients in open-label clinical
trials are aware when they are receiving treatment. Open-label clinical trials may be subject to a “patient bias” where
patients perceive their symptoms to have improved merely due to their awareness of receiving an experimental treatment.
In addition, open-label clinical trials may be subject to an “investigator bias” where those assessing and reviewing the
physiological outcomes of the clinical trials are aware of which patients have received treatment and may interpret the
information of the treated group more favorably given this knowledge. The results from an open-label trial may not be
predictive of future clinical trial results of a product candidate when studied in a controlled environment with a placebo or
active control.
We may experience numerous unforeseen events during or as a result of clinical trials that could delay or prevent
our ability to pursue strategic alternatives, including identifying and consummating transactions with third-party partners,
to further develop, obtain marketing approval for and/or commercialize our product candidates, including:
●
regulators or IRBs may not authorize us or our investigators to commence a clinical trial or conduct a clinical
trial at a prospective trial site;
●
we may experience delays in reaching, or fail to reach, agreement on acceptable clinical trial contracts or
clinical trial protocols with prospective trial sites or prospective contract research organizations (“CROs”),
the terms of which can be subject to extensive negotiation and may vary significantly among different CROs
and trial sites;
●
clinical trials of our product candidates may produce negative or inconclusive results, including failure to
demonstrate statistical significance, and we may decide, or regulators may require us, to conduct additional
clinical trials or abandon drug development programs;
●
the number of patients required for clinical trials of our product candidates may be larger than we anticipate,
enrollment in these clinical trials may be slower than we anticipate, or participants may drop out of these
clinical trials or fail to return for post-treatment follow-up at a higher rate than we anticipate;
●
patients or clinical trial investigators may not comply with or may deviate from the clinical trial protocol,
including failing to follow specified testing procedures, schedules, or other protocol requirements, which
could impact the integrity of clinical trial data and potentially jeopardize the trial;
●
while a product candidate may show evidence of clinical activity, we may experience a high placebo effect
which will make it difficult to show a statistically significant effect of the product candidate as compared to
the control arm;

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●
our product candidates may have undesirable side effects or other unexpected characteristics, causing us or
our investigators, regulators or IRBs to suspend or terminate the trials;
●
our third-party contractors may fail to comply with regulatory requirements or meet their contractual
obligations to us in a timely manner, or at all;
●
regulators or IRBs may require that we or our investigators suspend or terminate clinical development for
various reasons, including noncompliance with regulatory requirements or a finding that the participants are
being exposed to unacceptable health risks;
●
the cost of clinical trials of our product candidates may be greater than we anticipate; and
●
the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our
product candidates may be insufficient or inadequate.
We could also encounter delays if a clinical trial is suspended or terminated by us, by the IRBs of the institutions
in which such trials are being conducted, by a data safety monitoring board for such trial or by the FDA or other regulatory
authorities. Such authorities may impose such a suspension or termination due to a number of factors, including failure to
conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial
operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen
safety issues or adverse side effects, failure to demonstrate a benefit from using a drug, changes in governmental
regulations or administrative actions or lack of adequate funding to continue the clinical trial.  
If we experience delays in the completion of, or termination of, any clinical trial of our product candidates, our
costs will increase, our product candidate development process will be slowed, the commercial prospects of our product
candidates will be harmed, and our ability to pursue strategic alternatives, including identifying and consummating
transactions with third-party partners, to further develop, obtain marketing approval for and/or commercialize our product
candidates will be delayed. Any of these occurrences may harm our business, financial condition and prospects
significantly. In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of clinical
trials may also ultimately lead to the denial of marketing approval of our product candidates. If we are required to conduct
additional clinical trials or other testing of our product candidates beyond those that we currently contemplate, if we are
unable to successfully complete clinical trials of our product candidates or other testing, if the results of these trials or tests
are not favorable or if there are safety concerns, we may not be able to pursue strategic alternatives, including identifying
and consummating transactions with third-party partners, to further develop, obtain marketing approval for and/or
commercialize our product candidates, and our potential third-party partners may:
●
be delayed in obtaining marketing approval for our product candidates;
●
not obtain marketing approval at all;
●
obtain marketing approval for indications or patient populations that are not as broad as intended or desired;
●
obtain marketing approval with labeling that includes significant use or distribution restrictions or safety
warnings;
●
be subject to additional post-marketing testing requirements; or
●
have the drug removed from the market after obtaining marketing approval.
Our drug development costs will also increase if we experience delays in testing. We do not know whether any of
our preclinical studies or clinical trials will begin as planned, will need to be restructured or will be completed on schedule,
or at all. Significant preclinical study or clinical trial delays also could shorten any periods during which our potential
third-party partners may have the exclusive right to commercialize our product candidates or allow competitors to bring
drugs to market before such third-party partners do, which would impact our ability to successfully identify and
consummate transactions with third-party partners to further develop, obtain marketing approval for and/or commercialize
our product candidates.
If we experience delays or difficulties in the enrollment of subjects in clinical trials, our ability to pursue
strategic alternatives, including identifying and consummating transactions with third-party partners, to further
develop, obtain marketing approval for and/or commercialize our product candidates could be delayed or prevented.
Successful and timely completion of clinical trials will require that we enroll a sufficient number of subjects.
Subject enrollment, a significant factor in the timing of clinical trials, is affected by many factors including the size and
nature of the patient population. Trials may be subject to delays as a result of subject enrollment taking longer than
anticipated or subject withdrawal, including as a result of factors beyond our control. We may not be able to initiate or

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continue clinical trials for our product candidates if we are unable to locate and enroll a sufficient number of eligible
patients to participate in these trials as required by the FDA or similar regulatory authorities outside the United States. We
cannot predict how successful we will be at enrolling subjects in future clinical trials. Subject enrollment is affected by
other factors including:
●
the eligibility criteria for the trial in question;
●
the perceived risks and benefits of the product candidate in the trial;
●
the availability of drugs approved to treat the disease in the trial;
●
the efforts to facilitate timely enrollment in clinical trials;
●
the patient referral practices of physicians;
●
the ability to monitor subjects adequately during and after treatment; and
●
the proximity and availability of clinical trial sites for prospective subjects.
Our inability to enroll a sufficient number of subjects for clinical trials would result in significant delays and could
require us or them to abandon one or more clinical trials altogether. Enrollment delays in these clinical trials may result in
increased development costs for our product candidates, which would cause the value of our company to decline and limit
our ability to obtain additional financing. Furthermore, we rely on and expect to continue to rely on CROs and clinical trial
sites to ensure the proper and timely conduct of our clinical trials and we will have limited influence over their
performance. Any delays in completing clinical trials would delay or prevent our ability to pursue strategic alternatives,
including identifying and consummating transactions with third-party partners, to further develop, obtain marketing
approval for and/or commercialize our product candidates.
Our clinical trials may fail to demonstrate the safety and efficacy of our product candidates, or serious adverse
or unacceptable side effects may be identified during the development of our product candidates, which could increase
our costs or necessitate the abandonment or limitation of the development of our product candidates or prevent or delay
our ability to pursue strategic alternatives, including identifying and consummating transactions with third-party
partners, to further develop, obtain marketing approval for and/or commercialize our product candidates.
If our product candidates are associated with side effects in clinical trials or have characteristics that are
unexpected, our costs could increase or we may need to abandon their development or limit development to more narrow
uses in which the side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit
perspective. The FDA or an IRB may also require that we suspend, discontinue, or limit our clinical trials based on safety
information. Such findings could further result in regulatory authorities failing to provide marketing authorization for our
product candidates. Many product candidates that initially showed promise in early-stage testing have later been found to
cause side effects that prevented further development of the product candidate.
Before any potential third-party partners can obtain marketing approvals for the commercial sale of our product
candidates, we must demonstrate through lengthy, complex and expensive preclinical testing and clinical trials that our
product candidates are both safe and effective for use in each target indication, and failures can occur at any stage of
testing. Clinical trials often fail to demonstrate safety and efficacy of the product candidate studied for the target indication.
Additionally, if we or others identify undesirable side effects caused by our product candidates, a number of
potentially significant negative consequences could result, including:
●
we may need to abandon the development or limit the further development of our product candidates,
including in various populations and for certain indications;  
●
regulatory authorities may withdraw approval to market such product;
●
regulatory authorities may require additional warnings on the labels;
●
a medication guide outlining the risks of such side effects for distribution to patients may be required;
●
we could be sued and held liable for harm caused to patients;
●
our reputation and physician or patient acceptance of our product candidates, if approved, may suffer; and
●
our ability to pursue strategic alternatives, including identifying and consummating transactions with third-
party partners, to further develop, obtain marketing approval for and/or commercialize our product
candidates would be harmed.

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Any of these events could prevent us from pursuing strategic alternatives, including identifying and
consummating transactions with third-party partners, to further develop, obtain marketing approval for and/or
commercialize the particular product candidate and could significantly harm our business, results of operations and
prospects.
Interim, topline and preliminary data from our clinical trials that we announce or publish from time to time
may change as more subject data become available and are subject to audit and verification procedures that could result
in material changes in the final data.
From time to time, we may publicly disclose interim, topline or preliminary data from our clinical trials, which are
based on a preliminary analysis of then-available data, and the results and related findings and conclusions are subject to
change following a full analysis of all data related to the particular trial. We also make assumptions, estimations,
calculations and conclusions as part of our analyses of data, and we may not have received or had the opportunity to fully
and carefully evaluate all data. In addition, we may report preliminary analyses of only certain endpoints rather than all
endpoints. As a result, the interim, topline or preliminary results that we report may differ from future results of the same
trials, or different conclusions or considerations may qualify such results, once additional data have been received and fully
evaluated. Topline data also remain subject to audit and verification procedures that may result in the final data being
materially different from the preliminary data we previously published. As a result, interim, topline and preliminary data
should be viewed with caution until the final data are available. We may also disclose interim data from our clinical trials.
Interim data from clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may
materially change as subject enrollment continues and more subject data become available. Adverse differences between
interim, topline or preliminary data and final data could significantly harm our reputation and business prospects. Further,
disclosure of interim, topline or preliminary data by us or by our competitors could result in volatility in the price of our
common stock.
Further, others, including regulatory agencies, may not accept or agree with our assumptions, estimates,
calculations, conclusions or analyses or may interpret or weigh the importance of data differently, which could impact the
potential of the particular program, the likelihood of marketing approval or commercialization of the particular product
candidate, any approved product, and our company in general. In addition, the information we choose to publicly disclose
regarding a particular study or clinical trial is derived from information that is typically extensive, and you or others may
not agree with what we determine is material or otherwise appropriate information to include in our disclosure, and any
information we determine not to disclose may ultimately be deemed significant with respect to future decisions,
conclusions, views, activities or otherwise regarding a particular program, product candidate or our business.
If the interim, topline or preliminary data that we report differ from actual results, or if others, including
regulatory authorities, disagree with the conclusions reached, our ability to pursue strategic alternatives, including
identifying and consummating transactions with third-party partners, to further develop, obtain marketing approval for
and/or commercialize our product candidates may be harmed, which could harm our business, operating results, prospects
or financial condition.
Changes in methods of product candidate manufacturing or formulation may result in additional costs or
delay.
As product candidates are developed through preclinical studies to late-stage clinical trials towards approval and
commercialization, it is common that various aspects of the development program, such as manufacturing methods and
formulation, are altered along the way in an effort to optimize processes and results. Such changes carry the risk that they
will not achieve these intended objectives, and may also require additional testing, FDA notification or FDA approval. Any
of these changes could cause our product candidates to perform differently and affect the results of planned clinical trials or
other future clinical trials conducted with the altered materials. This could delay completion of clinical trials, require the
conduct of bridging clinical trials or the repetition of one or more clinical trials, increase clinical trial costs, delay approval
of our product candidates and jeopardize our ability to pursue strategic alternatives, including identifying and
consummating transactions with third-party partners, to further develop, obtain marketing approval for and/or
commercialize our product candidates.

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We have conducted and may in the future conduct clinical trials for our product candidates outside the United
States. The FDA, EMA or comparable foreign regulatory authorities may not accept data from such trials.
We have conducted and may in the future conduct clinical trials for our product candidates outside the United
States. In addition, our partners may conduct clinical trials for our product candidates outside of the United States that we
or our potential third-party partners may try to leverage to seek marketing approval in the United States. The acceptance of
trial data from clinical trials conducted outside the United States or another jurisdiction by the FDA or comparable foreign
regulatory authorities may be subject to certain conditions or may not be accepted at all. In cases where data from foreign
clinical trials are intended to serve as the basis for marketing approval in the United States, the FDA will generally not
approve the application on the basis of foreign data alone unless the data are applicable to the U.S. population and U.S.
medical practice, the trials were performed by clinical investigators of recognized competence and pursuant to GCP
regulations, and the FDA can validate the data through on-site inspections or other appropriate means. Additionally, the
FDA’s clinical trial requirements, including sufficient size of patient populations and statistical powering, must be met.
Such foreign trials would be subject to the applicable local laws of the foreign jurisdictions where the trials are conducted.
There can be no assurance that the FDA, EMA or any comparable foreign regulatory authority will accept data from trials
conducted outside of the United States or the applicable jurisdiction. If the FDA, EMA or any comparable regulatory
authority does not accept such data, it would result in the need for additional trials, which would be costly and time-
consuming and delay aspects of our business plan, and which may result in our product candidates not receiving approval
or clearance for commercialization in the applicable jurisdiction.
In addition, any escalation of political tensions, economic instability, military activity or civil hostilities outside
the United States could disrupt our ability to conduct trials outside of the United States, or delay or adversely affect the
timeliness of such trials. This could result in the need for alternative trial sites, which could be costly and time-consuming
and delay the clinical development of our product candidates.
We may not be successful in our efforts to increase our pipeline of product candidates, including by in-
licensing or acquiring additional product candidates.
A key element of our strategy is to build and expand our pipeline of product candidates. To build our pipeline, we
may seek to in-license or acquire additional product candidates, in addition to our in-house capabilities. We may not be
able to identify or develop product candidates that are safe, tolerable and effective. Even if we are successful in continuing
to build our pipeline, the potential product candidates that we develop, in-license or acquire may not be suitable for clinical
development, including as a result of being shown to have harmful side effects or other characteristics that indicate that
they are unlikely to receive marketing approval and achieve market acceptance.
We may expend our limited resources to pursue a particular product candidate or indication and fail to
capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of
success.
Because we have limited financial and management resources, we focus on development programs and product
candidates that we identify for specific indications or therapeutic areas. As a result, we may forego or delay pursuit of
opportunities with other product candidates or for other indications or therapeutic areas that later prove to have greater
commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or
profitable market opportunities. Our spending on current and future development programs and product candidates for
specific indications or therapeutics areas may not yield any commercially viable products. If we do not accurately evaluate
the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that
product candidate through partnerships, licensing or other arrangements in cases in which it would have been more
advantageous for us to retain sole development and commercialization rights to such product candidate.
For any of our product candidates that receive marketing approval, our potential third-party partners may fail
to achieve the degree of market acceptance by physicians, patients, third-party payors and others in the medical
community necessary for commercial success.
For any of our product candidates that receive marketing approval, our potential third-party partners may fail to
gain sufficient market acceptance by physicians, patients, third-party payors and others in the medical community. If such
third-party partners fail to obtain an adequate level of acceptance for our product candidates, we may not earn significant

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revenue and we may not become profitable. The degree of market acceptance of any product candidate, if approved, will
depend on a number of factors, including:
●
the efficacy, safety and potential advantages compared to alternative treatments;
●
our potential third-party partners’ ability to offer the products for sale at competitive prices;
●
the convenience and ease of administration compared to alternative treatments;
●
the willingness of the target patient population to try new treatments and of physicians to prescribe these
treatments;
●
the ability of our potential third-party partners to retain a sales force;
●
the strength of our potential third-party partners’ marketing and distribution support;
●
the availability of third-party payor coverage and adequate reimbursement or the willingness of patients to
pay for these products;
●
the prevalence and severity of any side effects; and
●
any restrictions on the use of our products together with other medications.
We face substantial competition, which may result in others discovering, developing or commercializing drugs
before or more successfully than we do.
The development and commercialization of new drugs is highly competitive. We will face competition with
respect to any product candidates that we may seek to develop or through our potential third-party partners, commercialize,
in the future, from many different sources, including major pharmaceutical, biotechnology and specialty pharmaceutical
companies, academic institutions and governmental agencies and public and private research institutions.
For our product candidate bosakitug targeting TSLP, we face direct competition from companies developing
TSLP-targeted therapies, including Amgen and AstraZeneca (tezepelumab), KeyMed Biosciences (CM-326), Uniquity Bio
(solrikitug), Windward Bio (WIN378), Tavotek Biotherapeutics (TAVO101), GSK (GSK5784283), and UpStream Bio
(verekutig). As a potential treatment of atopic dermatitis with bosakitug, we compete with companies marketing or
developing biologics, JAK inhibitors and other therapeutic classes, including AbbVie (upadacitinib), Incyte (ruxolitinib),
LEO Pharma A/S (delgocitinib), Pfizer (crisaborole; abrocitinib), Eli Lilly (lebrikizumab), Dermavant Sciences (tapinarof),
and Regeneron Pharmaceuticals and Sanofi (dupilumab). We also compete with these and other companies with respect to
other indications of interest for bosakitug, including asthma, CRSwNP and COPD.
For ATI-2138, our dual ITK/JAK inhibitor product candidate, we face competition from companies developing
selective ITK inhibitors such as Corvus Pharmaceuticals (soquelitinib), as well as companies marketing or developing JAK
inhibitors including Pfizer (tofacitinib, abrocitinib, and ritlecitinib), Eli Lilly/Incyte (baricitinib), and AbbVie
(upadacitinib). We also compete with these and other companies marketing or developing other therapeutic classes with
respect to indications of interest for ATI-2138, including atopic dermatitis, alopecia areata and vitiligo.
The commercial opportunity for our product candidates, if approved, could be reduced or eliminated if our
competitors develop and commercialize drugs that are safer, more effective, have fewer or less severe side effects, are more
convenient or are less expensive than a product that we may develop. Our competitors also may obtain FDA or other
regulatory approval for their drugs more rapidly than our potential third-party partners may obtain approval for our product
candidates, which could result in our competitors establishing a strong market position before our product candidates are
able to enter the market.
Many of the companies against which we are competing, or against which we may compete in the future, have
significantly greater financial resources and expertise in research and development, manufacturing, and preclinical and
clinical development than we do. Mergers and acquisitions in the pharmaceutical and biotechnology industries may result
in even more resources being concentrated among a smaller number of our competitors. Smaller or early-stage companies
may also prove to be significant competitors, particularly through collaborative arrangements with large and established
companies. These competitors also compete with us in recruiting and retaining qualified scientific and management
personnel and establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies
complementary to, or that may be necessary for, our development programs.

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The success of our product candidates, if approved, will depend significantly on coverage and adequate
reimbursement or the willingness of patients to pay for these products.
We believe the success of our product candidates, if approved, will depend on obtaining and maintaining coverage
and adequate reimbursement as a prescription treatment or, in the absence of coverage and adequate reimbursement, on the
extent to which patients will be willing to pay out of pocket for these prescription drug products.
Third-party payors determine which prescription drug products they will cover and establish reimbursement
levels. Reimbursement by a third-party payor may depend upon a number of factors, including: the third-party payor’s
determination that a product is safe, effective, and medically necessary; appropriate for the specific patient; cost-effective;
supported by peer-reviewed medical journals or current clinical practice guidelines; and whether there are competitive
products, either branded or generic, and the pricing of those products.  Many private third-party payors, such as managed
care plans, manage access to drug products’ coverage partly to control costs for their plans, and may use drug formularies
and medical policies to limit their exposure. Obtaining and maintaining favorable reimbursement can be a time-consuming
and expensive process, and our potential third-party partners may not be able to negotiate or continue to negotiate
reimbursement or pricing terms for our products with third-party payors at levels that are profitable to us, or at all. Further,
coverage policies and third-party reimbursement rates may change at any time. Even if favorable coverage and
reimbursement status is attained for one or more products which receive regulatory approval, less favorable coverage
policies and reimbursement rates may be implemented in the future.
In addition to uncertainties surrounding coverage policies, there are periodic changes to reimbursement. Third-
party payors regularly update reimbursement amounts and also from time to time revise the methodologies used to
determine reimbursement amounts. Accordingly, these updates could impact the demand for our product candidates, if
approved. Our product candidates, if approved, may not be considered cost effective, and government and third-party
private health insurance coverage and reimbursement may not be available to patients or sufficient to allow our potential
third-party partners to sell our product candidates, if approved, on a competitive and profitable basis. For example, the IRA
among other things, (1) directs HHS to negotiate the price of certain single-source drugs and biologics that have been on
the market for at least 7 years covered under Medicare, and (2) imposes rebates under Medicare Part B and Medicare Part
D to penalize price increases that outpace inflation. Our results of operations could be adversely affected by the Affordable
Care Act, the IRA, and by other health care legislative reforms that may be enacted or adopted in the future, particularly in
light of the recent U.S. Presidential and Congressional elections. In addition, increasing emphasis on managed care in the
United States will continue to put pressure on the pricing of pharmaceutical products. Cost control initiatives could
decrease the price that our potential third-party partners could receive for any of our product candidates, if approved, and
could adversely affect our profitability. We cannot predict how pending and future health care legislation will impact our
business, and any changes in coverage and reimbursement that further restricts coverage of our product candidates could
harm our business.
Foreign governments also have their own healthcare reimbursement systems, which vary significantly by country
and region, and we cannot be sure that coverage and adequate reimbursement will be made available with respect to our
product candidates, if approved, under any foreign reimbursement system. In some foreign countries, including major
markets in the European Union and Japan, the pricing of prescription pharmaceuticals is subject to governmental control.
In these countries, pricing negotiations with governmental authorities can take up to 12 months or longer after the receipt
of regulatory marketing approval for a product.  To obtain reimbursement or pricing approval in some countries, we may be
required to conduct a pharmacoeconomic study that compares the cost-effectiveness of our product candidate to other
available therapies. Such pharmacoeconomic studies can be costly and the results uncertain. Our business could be harmed
if reimbursement of our product candidates, if approved, is unavailable or limited in scope or amount or if pricing is set at
unsatisfactory levels.
Product liability lawsuits against us could cause us to incur substantial liabilities and to limit
commercialization of any of our product candidates that we may develop and are commercialized by our potential third-
party partners or impact any commercial products that we have previously sold or are being sold by third-party partners.
We face an inherent risk of product liability exposure related to the testing of our product candidates in human
clinical trials and relating to any of our commercial products that we have previously sold or are being sold by third-party
partners. If we cannot successfully defend ourselves against claims that our commercial products that we have previously

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sold or are being sold by third-party partners, or product candidates, caused injuries, we will incur substantial liabilities.
Regardless of merit or eventual outcome, product liability claims may result in:
●
decreased demand for any product candidates that we may develop and, if approved, are commercialized by
our potential third-party partners;
●
injury to our reputation and significant negative media attention;
●
withdrawal of clinical trial participants;
●
significant costs to defend the related litigation;
●
substantial monetary awards paid to trial participants or patients;
●
loss of revenue;
●
reduced resources of our management to pursue our business strategy; and
●
our inability to pursue strategic alternatives, including identifying and consummating transactions with third-
party partners, to further develop, obtain marketing approval for and/or commercialize our product
candidates.
We currently hold $10 million in product liability insurance coverage in the aggregate, with a per incident limit of
$10 million, which may not be adequate to cover all liabilities that we may incur. Insurance coverage is increasingly
expensive. We may need to increase our insurance coverage and we may not be able to maintain insurance coverage at a
reasonable cost or in an amount adequate to satisfy any liability that may arise.
Risks Related to Our Dependence on Third Parties
We rely on third parties to conduct clinical trials for our product candidates, and those third parties may not
perform satisfactorily, including failing to meet deadlines for the completion of such trials.
We engage CROs to conduct clinical trials of our product candidates. We expect to continue to rely on third
parties, such as clinical data management organizations, medical institutions and clinical investigators, to conduct those
clinical trials. If any of our relationships with these third parties terminate, we may not be able to timely enter into
arrangements with alternative third parties or to do so on commercially reasonable terms, if at all. In addition, any third
parties conducting our clinical trials will not be our employees, and except for remedies available to us under our
agreements with such third parties, we cannot control whether or not they devote sufficient time and resources to our
clinical programs. If these third parties do not successfully carry out their contractual duties or obligations or meet
expected deadlines, if they need to be replaced or if the quality or accuracy of the clinical data they obtain is compromised
due to the failure to adhere to our clinical protocols, regulatory requirements or for other reasons, our clinical trials may be
extended, delayed or terminated and we may not be able to identify and consummate transactions with third-party partners
to further develop, obtain marketing approval for and/or commercialize our product candidates. Consequently, our results
of operations and the commercial prospects for our product candidates would be harmed, our costs could increase
substantially and our ability to earn revenue from those partnerships could be delayed significantly.
Switching or adding CROs involves substantial cost and requires management time and focus. In addition, there is
a natural transition period when a new CRO commences work. As a result, delays occur, which can materially impact our
ability to meet our desired clinical development timelines. Though we intend to carefully manage our relationships with
our CROs, there can be no assurance that we will not encounter challenges or delays in the future or that these delays or
challenges will not have a material adverse impact on our business, financial condition and prospects.
We rely on these parties for execution of our preclinical studies and clinical trials, and generally do not control
their activities. Our reliance on these third parties for research and development activities will reduce our control over these
activities but will not relieve us of our responsibilities. For example, we will remain responsible for ensuring that each of
our clinical trials is conducted in accordance with the general investigational plan and protocols for the trial. Moreover, the
FDA requires us to comply with standards, commonly referred to as GCPs, for conducting, recording and reporting the
results of clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity and
confidentiality of trial participants are protected. We also are required to register ongoing clinical trials and post the results
of completed clinical trials on a government-sponsored database, ClinicalTrials.gov, within specified timeframes. Failure to
do so can result in fines, adverse publicity and civil and criminal sanctions. If we or any of our CROs fail to comply with
applicable GCPs, the clinical data generated in our clinical trials may be deemed unreliable and the FDA or comparable
foreign regulatory authorities may require us to perform additional clinical trials before approving

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marketing applications. We cannot assure you that upon inspection by a given regulatory authority, such regulatory
authority will determine that any of our clinical trials complies with GCP regulations. In addition, our clinical trials must
be conducted with drug product produced under cGMP regulations. Our failure to comply with these regulations may
require us to repeat clinical trials, which would delay the marketing approval process for our potential third-party partners.
We also rely on other third parties to store and distribute drug supplies for our clinical trials. Any performance
failure on the part of our distributors could delay clinical development or marketing approval of our product candidates or
commercialization of our product candidates, if approved, producing additional losses and depriving us of potential
revenue.
We contract with third parties for the manufacture and supply of our product candidates for preclinical and
clinical testing. This reliance on third parties increases the risk that we will not have sufficient quantities of our product
candidates or such quantities at an acceptable cost, which could delay, prevent or impair our development efforts.
We do not have any manufacturing facilities. We have not developed the ability to manufacture drug product
ourselves, nor have we developed the capabilities to manufacture biologics. We currently rely, and expect to continue to
rely, on third parties for the manufacture and supply of our product candidates for preclinical and clinical testing. This
reliance on third parties increases the risk that we will not have sufficient quantities of our product candidates at an
acceptable cost and/or quality, which could delay, prevent or impair our ability to timely conduct our clinical trials or our
other development efforts.
We currently use manufacturers in China to manufacture certain product candidates for use in our clinical trials.
For example, we currently rely on WuXi Biologics (Hong Kong) Limited (“WuXi”) for the production of product
necessary to complete our upcoming clinical trial for bosakitug. There have been Congressional legislative proposals, such
as the bill titled the BIOSECURE Act, which would, among other things, prohibit U.S. federal funding in connection with
biotechnology equipment or services produced or provided by certain named Chinese “biotechnology companies of
concern” (which includes WuXi) and loans and grants to, and federal contracts with, any entity that uses biotechnology
equipment or services from one of these entities in performance of the government contract, grant, or loan. The legislation
would also give the federal government the authority to name additional “biotechnology companies of concern” that are
engaged in research activities with the Chinese government and that pose a risk of U.S. national security. We continue to
monitor the status of the BIOSECURE Act, the implementation of which could materially impact our agreement with
WuXi or other Chinese companies. If this or similar legislation is adopted, or additional manufacturers are added to the list
of companies of concern, we may need to find replacement manufacturers, which we may not be able to do on a timely
basis, the result of which could delay, prevent or impair our ability to timely conduct our clinical trials or our other
development efforts and adversely affect our business.
The facilities used by our contract manufacturers to manufacture our product candidates must be approved by the
FDA or comparable foreign regulatory authorities pursuant to inspections that will be conducted after the NDA, BLA or
comparable marketing application is submitted to the FDA or other regulatory authority. We do not have control over a
supplier’s or manufacturer’s compliance with laws, regulations and applicable cGMP standards and other laws and
regulations, such as those related to environmental health and safety matters. If our contract manufacturers cannot
successfully manufacture material that conforms to our specifications and the strict regulatory requirements of the FDA or
others, they will not be able to secure and maintain regulatory approval for their manufacturing facilities. In addition, we
have no control over the ability of our contract manufacturers to maintain adequate quality control, quality assurance and
qualified personnel. If the FDA or a comparable foreign regulatory authority does not approve these facilities for the
manufacture of our product candidates or if it withdraws any such approval in the future, we may need to find alternative
manufacturing facilities, which could significantly impact our ability to develop, and identify and consummate transactions
with third-party partners to further develop, obtain marketing approval for and/or commercialize, our product candidates.
We may be unable to establish any agreements with future third-party manufacturers or do so on acceptable terms.
Even if we are able to establish agreements with third-party manufacturers, reliance on third-party manufacturers entails
additional risks, including:
●
reliance on the third party for regulatory compliance and quality assurance;
●
the possible breach of the manufacturing agreement by the third party;
●
the possible misappropriation of our proprietary information, including our trade secrets and know-how;
●
the possible increase in costs by our third-party suppliers for the active pharmaceutical ingredients for our

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product candidates; and
●
the possible termination or nonrenewal of the agreement by the third party at a time that is costly or
inconvenient for us.
Third-party manufacturers may not be able to comply with cGMP regulations or similar regulatory requirements
outside the United States. Our failure, or the failure of our third-party manufacturers, to comply with applicable regulations
could result in sanctions being imposed on us, including clinical holds, fines, injunctions, civil penalties, delays, suspension
or withdrawal of approvals, license revocation, seizures or recalls of products, operating restrictions and criminal
prosecutions, any of which could significantly and adversely affect supplies of our product candidates. 
Our product candidates may compete with other products and product candidates for access to manufacturing
facilities. There are a limited number of manufacturers that operate under cGMP regulations and that might be capable of
manufacturing for us. Any performance failure on the part of our existing or future manufacturers could delay clinical
development or marketing approval of our product candidates. Additionally, the loss of or damage to our cell banks
maintained at these third-party manufacturers could significantly delay our development efforts, as establishing and
qualifying new cell banks would require substantial time and resources.
If our current contract manufacturers cannot perform as agreed, we may be required to replace such
manufacturers. We may incur added costs and delays in identifying and qualifying any such replacement. We do not
currently have arrangements in place for redundant supply or a second source for the active pharmaceutical ingredients
and/or drug product for our product candidates.
We expect to continue to depend on third-party contract manufacturers for the foreseeable future. Our current and
anticipated future dependence upon others for the manufacture of our product candidates may adversely affect our future
profit margins and our ability to pursue strategic alternatives, including identifying and consummating transactions with
third-party partners, to further develop, obtain marketing approval for and/or commercialize our product candidates on a
timely and competitive basis.
We intend to pursue strategic alternatives, including identifying and consummating transactions with third-
party partners, to further develop, obtain marketing approval for and/or commercialize our product candidates. If those
arrangements are not successful, we may not be able to capitalize on the market potential of these product candidates.
We intend to pursue strategic alternatives, including identifying and consummating transactions with third-party
partners, to further develop, obtain marketing approval for and/or commercialize our product candidates. Our likely
partners for any such arrangements include large and mid-size pharmaceutical companies, regional and national
pharmaceutical companies and biotechnology companies. If we do enter into any such arrangements with any third parties,
we will likely have limited control over the amount and timing of resources that our partners dedicate to the development
or commercialization of our product candidates. Our ability to earn revenue from these arrangements will depend on our
partners’ abilities to successfully perform the functions assigned to them in these arrangements.
Partnerships involving our product candidates would pose the following risks to us:
●
partners have significant discretion in determining the efforts and resources that they will apply to these
arrangements;
●
partners may not perform their obligations as expected;
●
partners may not pursue development, marketing approval or commercialization of any product candidates
that achieve marketing approval or may elect not to continue or renew development or commercialization
programs based on clinical trial results, changes in the partners’ strategic focus or available funding, or
external factors, such as an acquisition, that divert resources or create competing priorities;
●
partners may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial
or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a
product candidate for clinical testing;
●
partners could independently develop, or develop with third parties, products that compete directly or
indirectly with our product candidates if the partners believe that competitive products are more likely to be
successfully developed or can be commercialized under terms that are more economically attractive than
ours;

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●
product candidates discovered in collaboration with us may be viewed by our collaborators as competitive
with their own products or product candidates, which may cause our partners to cease to devote resources to
the development and/or commercialization of our product candidates, if approved;
●
a partner with marketing and distribution rights to one or more of our product candidates that achieve
marketing approval may not commit sufficient resources to the marketing and distribution of such product
candidates;
●
disagreements with partners, including disagreements over proprietary rights, contract interpretation or the
preferred course of development or commercialization, might cause delays or termination of the research,
development or commercialization of product candidates, might lead to additional responsibilities for us with
respect to product candidates, or might result in litigation or arbitration, any of which would be time-
consuming and expensive;
●
partners may not properly maintain or defend our or their intellectual property rights or may use our or their
proprietary information in such a way as to invite litigation that could jeopardize or invalidate such
intellectual property or proprietary information or expose us to potential litigation;
●
partners may infringe the intellectual property rights of third parties, which may expose us to litigation and
potential liability; and
●
partnerships may be terminated for the convenience of the partner and, if terminated, we could be required to
raise additional capital to pursue further development and/or commercialization of the applicable product
candidates.
Partnership agreements may not lead to development, marketing approval or commercialization of product
candidates in the most efficient manner or at all. If a present or future partner of ours were to be involved in a business
combination, the continued pursuit and emphasis on our drug development or commercialization program could be
delayed, diminished or terminated. 
If we are not able to establish partnerships, we may have to alter our development and commercialization
plans.
Our development programs for our product candidates will require substantial additional capital. We intend to
partner with pharmaceutical and biotechnology companies for the further development and/or commercialization of our
product candidates.
We face significant competition in seeking appropriate partners. Whether we reach a definitive agreement for a
partnership will depend, among other things, upon our assessment of the partner’s resources and expertise, the terms and
conditions of the proposed arrangement and the proposed partner’s evaluation of a number of factors. Those factors may
include the design or results of clinical trials, the likelihood of approval by the FDA or similar regulatory authorities
outside the United States, the potential market for the subject product candidate, the costs and complexities of
manufacturing and delivering such product candidate to patients, the potential of competing products, the existence of
uncertainty with respect to our ownership of technology, which can exist if there is a challenge to such ownership without
regard to the merits of the challenge, and industry and market conditions generally. The partner may also consider
alternative product candidates or technologies for similar indications that may be available to partner on and whether such
a partnership could be more attractive than the one with us for our product candidate. Partnerships are complex and time-
consuming to negotiate and document. In addition, there have been a significant number of recent business combinations
among large pharmaceutical companies that have resulted in a reduced number of potential future partners.
We may not be able to negotiate partnerships on a timely basis, on acceptable terms, or at all. If we are unable to
do so, we may have to curtail the development of such product candidate, reduce or delay its development program or one
or more of our other development programs or increase our expenditures and undertake development or commercialization
activities at our own expense. If we elect to increase our expenditures to fund development or commercialization activities
on our own, we may need to obtain additional capital, which may not be available to us on acceptable terms or at all. If we
do not have sufficient funds, we may not be able to further develop our product candidates or bring them to market and
generate revenue.

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We may not have access to all information regarding our product candidates that are subject to partnership
agreements. Consequently, our ability to inform our stockholders about the status of our product candidates that are
subject to these agreements, and our ability to make business and operational decisions, may be limited.
We may not have access to all information regarding our product candidates that are or may in the future become
subject to agreements with partners, including potentially material information about clinical trial design, execution and
timing, safety and efficacy, clinical trial results, regulatory affairs, manufacturing, marketing, sales and other areas known
by our partners or potential partners. In addition, we have and may in the future have confidentiality obligations under our
agreements with such partners. Therefore, our ability to keep our stockholders informed about the status of our product
candidates will be limited by the degree to which our partners keep us informed and by the degree to which our partners
allow us to disclose information to the public or provide such information to the public themselves. For example, we are
relying on CTTQ, our partner in China, to share information about its Phase 2 trials of bosakitug in respiratory diseases. If
our partners do not timely inform us about the status of our product candidates that are the subject of the partnership, we
may make operational and investment decisions that we would not have made had we been fully informed, which may
have an adverse impact on our business, prospects, financial condition and results of operations.
We are dependent on third parties accurately generating and reporting data related to our product candidates,
and their conduct could adversely affect our business.
We have and may in the future acquire or in-license our product candidates at various stages of development. For
example, we in-licensed bosakitug and ATI-052 from Biosion. Our assumptions about the potential of such product
candidates are partially based on data generated from preclinical studies and clinical trials conducted by Biosion. We are
dependent on Biosion having conducted its research and development in accordance with the applicable protocols,
informed consent, legal and regulatory requirements, and scientific standards, having accurately reported the results of all
studies conducted, and having correctly collected the data from these studies. If these activities were not compliant,
accurate or correct, the clinical development, regulatory approval or commercialization of such product candidates will be
adversely affected.
Additionally, in cases where third parties conduct clinical trials using our product candidates through partnership
or licensing agreements, we face additional risks related to the conduct and outcome of those trials that are outside of our
direct control. For example, issues such as poor data integrity, safety concerns, protocol violations, or failure to meet
endpoints in these third-party trials could adversely impact the development timeline and regulatory approval process for
those product candidates in other indications or territories, require additional studies, create negative market perception
affecting future commercial potential, impact our ability to pursue strategic alternatives for such product candidates, or
result in increased regulatory scrutiny across our programs.
Risks Related to Our Intellectual Property
If we are unable to obtain and maintain patent protection for our product candidates, or if the scope of the
patent protection obtained is not sufficiently broad, our competitors could develop and commercialize technology and
drugs similar or identical to ours, and ability to successfully identify a potential third-party partner to commercialize our
technology and product candidates may be impaired.
Our success depends in large part on our ability to obtain and maintain patent protection in the United States and
other countries with respect to our product candidates. We seek to protect our proprietary position by filing patent
applications in the United States and abroad related to our product candidates. 
The patent prosecution process is expensive and time-consuming, however, and we may not be able to file and
prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. It is also possible that we
will fail to identify patentable aspects of our development output before it is too late to obtain patent protection. We may
not have the right to control the preparation, filing and prosecution of patent applications, or to maintain the rights to
patents licensed to third parties. Therefore, these patents and applications may not be prosecuted and enforced in a manner
consistent with the best interests of our business.
The patent position of biotechnology and pharmaceutical companies generally is highly uncertain, involves
complex legal and factual questions and has in recent years been the subject of much litigation. In addition, the laws of
foreign countries may not protect our rights to the same extent as the laws of the United States or vice versa. For example,

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European patent law restricts the patentability of methods of treatment of the human body more than U.S. law does.
Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the
United States and other jurisdictions are typically not published until 18 months after filing, or in some cases not at all.
Therefore, we cannot know with certainty whether we or our licensors were the first to make the inventions claimed in our
patents or pending patent applications, or that we or our licensors were the first to file for patent protection of such
inventions. As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights are highly
uncertain. Our pending and future patent applications may not result in patents being issued that protect our technology or
product candidates, in whole or in part, or which effectively prevent others from commercializing competitive technologies
and product candidates. Changes in either the patent laws or interpretation of the patent laws in the United States and other
countries may diminish the value of our patents or narrow the scope of our patent protection.
Moreover, we may be subject to a third-party preissuance submission of prior art to the USPTO or other foreign
patent office, or become involved in opposition, central revocation, derivation, reexamination, inter partes review, post-
grant review or interference proceedings challenging our patent rights or the patent rights of others. An adverse
determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate, our patent rights,
allow third parties to commercialize our technology or product candidates and compete directly with us, without payment
to us, or result in the inability of our potential third-party partners to manufacture or commercialize our product candidates
without infringing third-party patent rights. In addition, if the breadth or strength of protection provided by our patents and
patent applications that we own or license is threatened, it could dissuade companies from partnering with us to license,
develop and/or commercialize our product candidates. 
Even if our patent applications issue as patents, they may not issue in a form that will provide us with any
meaningful protection, prevent competitors from competing with us or our potential third-party partners or otherwise
provide us or our potential third-party partners with any competitive advantage. Competitors may be able to circumvent our
patents by developing similar or alternative technologies or drugs in a non-infringing manner.
In addition, the issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and
our patents may be challenged in the courts or patent offices in the United States and abroad. Such challenges may result in
loss of exclusivity or freedom to operate or in patent claims being narrowed, invalidated or held unenforceable, in whole or
in part, which could limit the ability to stop others from using or commercializing similar or identical technology and
product candidates, or limit the duration of the patent protection of our technology and product candidates. Our pending
U.S. application covering bosakitug, if issued, would expire in 2040 and our pending PCT application covering ATI-052, if
issued, would expire in 2043. Our issued U.S. patent directed to ATI-2138 expires in 2039.   Our issued U.S. patent
covering lepzacitinib expires in 2038. Our issued U.S. patents covering zunsemetinib expire in 2034.  We are pursuing
additional patent protection for our product candidates, such as methods of use, polymorphs and methods of manufacture,
that may extend the term of patent protection in select countries. Given the amount of time required for the development,
testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly
after such candidates are commercialized. As a result, our patent portfolio may not provide us or our potential third-party
partners with sufficient rights to exclude others from commercializing drugs similar or identical to ours.
We may become involved in lawsuits to protect or enforce our patents or other intellectual property, which
could be expensive, time-consuming and unsuccessful. Further, our issued patents could be found invalid or
unenforceable if challenged in court.
Competitors may infringe our issued patents or other intellectual property. Our pending applications cannot be
enforced against third parties practicing the technology claimed in such applications unless and until a patent issues from
such applications. To counter infringement or unauthorized use, we may be required to file infringement claims, which can
be expensive and time-consuming. Any claims we assert against perceived infringers could provoke these parties to assert
counterclaims against us alleging that we infringe their patents or that our patents are invalid or unenforceable. Grounds for
a validity challenge could be an alleged failure to meet any of several statutory requirements, including lack of novelty,
obviousness, non-enablement or insufficient written description, or similar requirements outside of the United States.
Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent
withheld relevant information from the USPTO or made a misleading statement during prosecution. Third parties may also
raise similar claims before the USPTO, in post-grant proceedings such as ex parte reexaminations, inter partes review, or
post-grant review, or oppositions or similar administrative proceedings outside the United States, in parallel with litigation
or, even outside the context of litigation. The outcome following legal assertions of invalidity and unenforceability is
unpredictable. With respect to the validity question, for example, we cannot be certain that there is no

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invalidating prior art of which we and the patent examiner were unaware during prosecution. If a defendant were to prevail
on a legal assertion of invalidity or unenforceability, we would lose at least part, and perhaps all, of the patent protection on
our product candidates. Such a loss of patent protection would harm our business. 
In such a proceeding, a court or administrative board may decide that a patent of ours is invalid or unenforceable,
in whole or in part, construe the patent’s claims narrowly or refuse to stop the other party from using the technology at
issue on the grounds that our patents do not cover the technology. An adverse result in any such proceeding could put one
or more of our patents at risk of being invalidated or interpreted narrowly. We may find it impractical or undesirable to
enforce our intellectual property against some third parties. 
Interference or derivation proceedings provoked by third parties or brought by us or declared by the USPTO may
be necessary to determine the priority of inventions with respect to our patents or patent applications. An unfavorable
outcome could require us to cease using the related technology or to attempt to license rights to it from the prevailing party.
Our business could be harmed if the prevailing party does not offer us a license on commercially reasonable terms. 
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.
We may not be able to protect our intellectual property rights throughout the world.
Filing, prosecuting and defending patents on our product candidates in all countries throughout the world would
be prohibitively expensive, and our intellectual property rights in some countries outside the United States can be less
extensive than those in the United States. For example, we only have pending applications in the United States, Europe,
Japan and South Korea for our TSLP monoclonal antibodies. We have issued U.S. patents directed to ATI-2138, and
pending applications in foreign markets directed to ATI-2138. We currently have a pending PCT application directed to
ATI-052 and other TSLP and IL4R bispecific antibodies. While we have issued U.S. and Chinese patents directed to
lepzacitinib, we do not currently have any patents in other foreign markets; rather, we have pending applications in other
foreign markets directed to lepzacitinib. Zunsemetinib is currently covered by patents and applications in the United States,
European Union and other foreign markets.  
Many companies have encountered significant problems in protecting and defending intellectual property rights in
foreign jurisdictions. The legal systems of some countries do not favor the enforcement of patents and other intellectual
property protection, which could make it difficult for us to stop the infringement of our patents generally. Proceedings to
enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from
other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent
applications at risk of not issuing and could provoke third parties to assert claims against us. We may not prevail in any
lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be commercially meaningful. 
Many countries, including European Union countries, India, Japan and China, have compulsory licensing laws
under which a patent owner may be compelled under specified circumstances to grant licenses to third parties. In those
countries, we may have limited remedies if patents are infringed or if we are compelled to grant a license to a third party,
which could materially diminish the value of those patents. This could limit our ability to pursue strategic alternatives,
including identifying and consummating transactions with potential third-party partners, to further develop, obtain
marketing approval for and/or commercialize our product candidates, and consequently our potential revenue
opportunities. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to
obtain a significant commercial advantage from the intellectual property that we develop or license.
We may need to license intellectual property from third parties, and such licenses may not be available or may
not be available on commercially reasonable terms.
A third party may hold intellectual property, including patent rights, that are important or necessary to the
development and/or commercialization of our product candidates. It may be necessary for us or our potential third-party
partners to use the patented or proprietary technology of third parties to further develop and/or commercialize our product
candidates. If we or our potential third-party partners are not able to obtain a license from these third parties on
commercially reasonable terms, our business could be harmed, possibly materially, and even if we or they are able to, it
may result in the reduction of revenue we earn from such partner as a result of payment obligations to the licensor. 

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Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights,
the outcome of which would be uncertain and could have a material adverse effect on the success of our business.
Our success depends upon our ability to pursue strategic alternatives, including identifying and consummating
transactions with potential third-party partners, to develop, obtain marketing approval for and/or commercialize our
product candidates and earn revenue from those partnerships, and for our proprietary technologies to be used without
infringing the proprietary rights of third parties. There is considerable intellectual property litigation in the biotechnology
and pharmaceutical industries. We may become party to, or threatened with, future adversarial proceedings or litigation
regarding intellectual property rights with respect to our product candidates and technologies, including interference or
derivation proceedings before the USPTO. Numerous U.S. and foreign issued patents and pending patent applications
owned by third parties exist in the fields in which we are developing our product candidates. Third parties may assert
infringement claims against us based on existing patents or patents that may be granted in the future.
If we or our potential third-party partners are found to infringe a third party’s intellectual property rights, we or
such partners could be required to obtain a license from such third party to continue developing or commercializing our
product candidates and technology. However, we or our potential third-party partners may not be able to obtain any
required license on commercially reasonable terms or at all. Even if we or our potential third-party partner were able to
obtain a license, it could be non-exclusive, thereby giving competitors access to the same technologies licensed to us or our
partner. Consequently, we or our potential third-party partner could be forced, including by court order, to cease developing
or commercializing the infringing technology or product candidate. In addition, we or our potential third-party partner
could be found liable for monetary damages, including treble damages and attorneys’ fees if we or such partner are found
to have willfully infringed a patent. A finding of infringement could prevent our potential third-party partners from
commercializing our product candidates, if approved, or force such partners to cease some of their business operations. In
the event of a successful claim of infringement against us or our potential third-party partners, we or our potential third-
party partners may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement,
pay royalties, redesign our infringing product candidate or obtain one or more licenses from third parties, which may be
impossible or require substantial time and monetary expenditure. Claims that we have misappropriated the confidential
information or trade secrets of third parties could have a similar negative impact on our business.
We may be subject to claims by third parties asserting that we, our employees or our licensors have
misappropriated their intellectual property, or claiming ownership of what we regard as our own intellectual property.
Many of our employees and our licensors’ employees were previously employed at other biotechnology or
pharmaceutical companies. Although we and our licensors try to ensure that our employees and our licensors’ employees
do not use the proprietary information or know-how of others in their work for us, we or our licensors may be subject to
claims that these employees, our licensors or we have used or disclosed intellectual property, including trade secrets or
other proprietary information, of any such employee’s former employer. Litigation may be necessary to defend against
these claims. 
In addition, while it is our policy to require our employees and contractors who may be involved in the
development of intellectual property to execute agreements assigning such intellectual property to us, we may be
unsuccessful in executing such an agreement with each party who in fact develops intellectual property that we regard as
our own. Our and their assignment agreements may not be self-executing or may be breached, and we may be forced to
bring claims against third parties, or defend claims they may bring against us, to determine the ownership of what we
regard as our intellectual property.
If we or our licensors fail in prosecuting or defending any such claims, in addition to paying monetary damages,
we may lose valuable intellectual property rights or personnel. Even if we and our licensors are successful in prosecuting or
defending against such claims, litigation could result in substantial costs and be a distraction to management. 
Intellectual property litigation could cause us to spend substantial resources and distract our personnel from
their normal responsibilities.
Even if resolved in our favor, litigation or other legal proceedings relating to intellectual property claims may
cause us to incur significant expenses and could distract our technical and management personnel from their normal
responsibilities. In addition, there could be public announcements of the results of hearings, motions or other interim

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proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have a
substantial adverse effect on the price of our common stock. Such litigation or proceedings could substantially increase our
operating losses and reduce the resources available for development activities. We may not have sufficient financial or
other resources to conduct such litigation or proceedings adequately. Some of our competitors may be able to sustain the
costs of such litigation or proceedings more effectively than we can because of their greater financial resources. Some of
our competitors are larger than we are and have substantially greater resources. They are, therefore, likely to be able to
sustain the costs of complex patent litigation longer than we could. Accordingly, despite our efforts, we may not be able to
prevent third parties from infringing upon or misappropriating our intellectual property. Litigation could result in
substantial costs and diversion of management resources, which could harm our business. In addition, the uncertainties
associated with litigation could compromise our ability to compete in the marketplace, including compromising our ability
to raise the funds necessary to continue our clinical trials, continue our internal research programs, or pursue strategic
alternatives, including identifying and consummating transactions with third-party partners, to further develop, obtain
marketing approval for and/or commercialize our product candidates.
If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would
be harmed.
In addition to seeking and maintaining patents for our product candidates, we also rely on trade secrets, including
unpatented know-how, technology and other proprietary information, to maintain our competitive position. We seek to
protect our trade secrets, in part, by entering into non-disclosure and confidentiality agreements with parties who have
access to them, such as our employees, corporate collaborators, outside scientific collaborators, contract manufacturers,
consultants, advisors and other third parties. We also enter into confidentiality and invention or patent assignment
agreements with our employees and consultants. Despite these efforts, any of these parties may breach the agreements and
disclose our proprietary information, including our trade secrets, and we may not be able to obtain adequate remedies for
such breaches. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and
time-consuming, and the outcome is unpredictable. In addition, some courts inside and outside the United States are less
willing or unwilling to protect trade secrets. If any of our trade secrets were to be lawfully obtained or independently
developed by a competitor, we would have no right to prevent them, or those to whom they communicate it, from using
that technology or information to compete with us. If any of our trade secrets were to be disclosed to or independently
developed by a competitor, our competitive position would be harmed. 
The validity, scope and enforceability of any of our patents that cover any of our product candidates can be
challenged by competitors.
If any of our product candidates advance through development or are approved by the FDA or foreign regulatory
authority, one or more third parties may challenge the current patents, or patents that may issue in the future, within our
portfolio covering these product candidates. The challenge may come in the form of a patent office proceeding, such as
an inter partes review challenging the validity of the patents, or a district court proceeding such as a paragraph IV litigation
arising out of the filing of an ANDA or a patent infringement suit arising out of the filing of an abbreviated biologics
license application (“aBLA”). Litigation or other proceedings to enforce or defend intellectual property rights are often
very complex in nature, may be expensive and time-consuming, may divert our management's attention from our core
business, and may result in unfavorable results that could limit our ability to prevent third parties from competing with our
product candidates, if approved. Any such challenge could result in the invalidation of, or render unenforceable, some or
all of the relevant patent claims or a finding of non-infringement, which would harm our ability to pursue strategic
alternatives, including identifying and consummating transactions with third-party partners, to further develop, obtain
marketing approval for and/or commercialize our product candidates, and earn revenue from such arrangements. In
addition, any such challenge on any divested product could harm our ability to earn revenue from the arrangements for
such product. 
If we do not obtain protection under the Hatch-Waxman Act by extending the patent term and obtaining data
exclusivity for our product candidates, our business may be materially harmed.
Our success will largely depend on our ability to obtain and maintain patent and other intellectual property in the
United States and other countries with respect to our proprietary technology, product candidates and our target
indications.  Our pending U.S. application covering bosakitug, if issued, would expire in 2040. Our issued U.S. patent
directed to ATI-2138 expires in 2039. Our pending PCT application covering ATI-052, if issued, would expire in 2043. Our
issued U.S. patent covering lepzacitinib expires in 2038. Our issued U.S. patents covering zunsemetinib expire in

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2034. Given the amount of time required for the development, testing and regulatory review of new product candidates,
patents protecting our product candidates might expire before or shortly after such candidates begin to be commercialized.
We expect to seek extensions of patent terms in the United States and, if available, in other countries where we are
prosecuting patents.
Depending upon the timing, duration and specifics of FDA marketing approval of our product candidates, one or
more of our U.S. patents may be eligible for limited patent term extension under the Hatch-Waxman Act for a product
candidate. The Hatch-Waxman Act permits a patent extension term of up to five years beyond the normal expiration of the
patent as compensation for patent term lost during development and the FDA regulatory review process, which is limited to
the approved indication (or any additional indications approved during the period of extension). However, the total patent
term including the period of extension cannot exceed 14 years from the product’s approval date. Furthermore, this
extension is limited to only one patent per regulatory review period that covers the approved product. However, the
applicable authorities, including the FDA and the USPTO in the United States, and any equivalent regulatory authority in
other countries, may not agree with our assessment of whether such extensions are available, and may refuse to grant
extensions to our patents, or may grant more limited extensions than we request. We may not be granted an extension
because of, for example, failing to apply within applicable deadlines, failing to apply prior to expiration of relevant patents
or otherwise failing to satisfy applicable requirements. Moreover, the applicable time period or the scope of patent
protection afforded could be less than we request. Similar provisions are available in certain foreign countries, such as the
European Union and Japan.
If we are unable to extend the expiration date of our existing patents or obtain new patents with longer expiry
dates, our competitors may be able to take advantage of our investment in development and clinical trials by referencing
our clinical and preclinical data to obtain approval of competing products following our patent expiration and launch their
product earlier than might otherwise be the case.
Any trademarks we have obtained or may obtain may be infringed or successfully challenged, resulting in
harm to our business.
We expect to rely on trademarks as one means to distinguish our products, services or technologies from those of
our competitors. Once we select new trademarks and apply to register them, our trademark applications may not be
approved. Third parties may oppose or attempt to cancel our trademark applications or trademarks, or otherwise challenge
our use of the trademarks. In such an event, we may need to negotiate a settlement agreement with such third party over the
use of our trademarks, which we may not be able to do on commercially reasonable terms, if at all. In the event that our
trademarks are successfully challenged, our products, services or technologies may need to be rebranded, which could
result in loss of brand recognition and could require us to devote resources to advertising and marketing new brands. Our
competitors may infringe our trademarks and we may not have adequate resources to enforce our trademarks.
Outside of the United States we cannot be certain that any country’s patent or trademark office will not
implement new rules that could seriously affect how we draft, file, prosecute and maintain patents, trademarks and
patent and trademark applications.
We cannot be certain that the patent or trademark offices of countries outside the United States will not implement
new rules that increase costs for drafting, filing, prosecuting and maintaining patents, trademarks and patent and trademark
applications or that any such new rules will not restrict our ability to file for patent or trademark protection. For example,
we may elect not to seek patent protection in some jurisdictions or for some product candidates in order to save costs. We
may be forced to abandon or return the rights to specific patents due to a lack of financial resources.
For example, following the result of a referendum in 2016, the United Kingdom left the European Union on
January 31, 2020, commonly referred to as Brexit. The impact of the withdrawal of the United Kingdom from the
European Union will not be known for some time, which could lead to a period of uncertainty relating to our ability to
obtain and maintain patents and trademarks in the United Kingdom. In 2012, the European Patent Package (“EU Patent
Package”) regulations were passed with the goal of providing for a single pan-European Unitary Patent, and a new
European Unified Patent Court (“UPC”) for litigation of European patents, which was implemented in 2023. All European
patents, including those issued prior to ratification, would by default automatically fall under the jurisdiction of the UPC
and allow for the possibility of obtaining pan-European injunctions, unless the patent holder “opts out” of the UPC on a
patent-by-patent basis during an initial seven-year period. Owners of traditional European patent applications who receive
notice of grant after the EU Patent Package ratification can either accept a Unitary Patent or validate the patent nationally
and file an opt-

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out demand. The EU Patent Package may increase the uncertainties and costs surrounding the enforcement or defense of
our issued European patents and pending applications. The full impact on future European patent filing strategy and the
enforcement or defense of our issued European patents in member states and/or the UPC is not known.
Intellectual property rights do not necessarily address all potential threats to our competitive advantage.
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. The following examples are illustrative:
●
we, our licensors or any potential third-party partners might not have been the first to make the inventions
covered by the issued patents or pending patent applications that we own;
●
we, our licensors or any potential third-party partners might not have been the first to file patent applications
covering certain of our inventions;
●
others may independently develop similar or alternative technologies or duplicate any of our technologies
without infringing our intellectual property rights;
●
it is possible that our pending patent applications will not lead to issued patents;
●
issued patents that we own or exclusively license may not provide us with any competitive advantages, or
may be held invalid or unenforceable as a result of legal challenges;
●
our competitors might conduct research and development activities in the United States and other countries
that provide a safe harbor from patent infringement claims for certain research and development activities, as
well as in countries where we do not have patent rights, and then use the information learned from such
activities to develop competitive products for sale in major commercial markets; and
●
we may develop additional proprietary technologies that are not patentable.
Risks Related to Regulatory Approval of Our Product Candidates and Other Legal Compliance Matters
If our potential third-party partners are not able to obtain, or if there are delays in obtaining, required
regulatory approvals, our product candidates will not be able to be commercialized, and our ability to earn revenue from
arrangements with such third-party partners will be materially impaired.
Our product candidates and the activities associated with their development and commercialization, including
their design, testing, manufacture, safety, efficacy, recordkeeping, labeling, storage, approval, advertising, promotion, sale
and distribution, are subject to comprehensive regulation by the FDA, other regulatory agencies in the United States and
similar regulatory authorities outside the United States. Failure to obtain marketing approval for a product candidate will
prevent our potential third-party partners from commercializing the product candidate. We have only limited experience in
filing and supporting the applications necessary to gain marketing approvals. Securing marketing approval requires the
submission of extensive preclinical and clinical data and supporting information to regulatory authorities for each
therapeutic indication to establish the product candidate’s safety and efficacy. Securing marketing approval also requires
the submission of information about the drug manufacturing process to, and inspection of manufacturing facilities by, the
regulatory authorities. Our product candidates may not be effective, may be only moderately effective or may prove to have
undesirable or unintended side effects, toxicities or other characteristics that may preclude our potential third-party partners
from obtaining marketing approval or prevent or limit commercial use. If any of our product candidates receive marketing
approval, the accompanying label may limit the approved use of our product in this way, which could limit sales of the
product. 
The process of obtaining marketing approvals, both in the United States and abroad, is expensive and may take
many years if additional clinical trials are required, if approval is obtained at all, and can vary substantially based upon a
variety of factors, including the type, complexity and novelty of the product candidates involved. Changes in marketing
approval policies during the development period, changes in or the enactment of additional statutes or regulations, or
changes in regulatory review for each submitted drug application, may cause delays in the approval or rejection of an
application. Regulatory authorities have substantial discretion in the approval process and may refuse to accept any
application or may decide that our data is insufficient for approval and require additional preclinical, clinical or other
studies. In addition, varying interpretations of the data obtained from preclinical and clinical testing could delay, limit or
prevent marketing approval of a product candidate. Any marketing approval our potential third-party partners ultimately

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obtain may be limited or subject to restrictions or post-approval commitments that render the approved drug not
commercially viable.
If our potential third-party partners experience delays in obtaining approval or if they fail to obtain approval of our
product candidates, the commercial prospects for our product candidates may be harmed and our ability to earn revenue
from arrangements with such third-party partners will be materially impaired.
Failure to obtain marketing approval in international jurisdictions would prevent our product candidates from
being marketed abroad.
In order to market and sell our product candidates in the European Union and any other jurisdictions outside the
United States, our potential third-party partners must obtain separate marketing approvals and comply with numerous and
varying regulatory requirements. The approval procedure varies among countries and can involve additional testing. The
time required to obtain approval may differ substantially from that required to obtain FDA approval. The regulatory
approval process outside the United States generally includes all of the risks associated with obtaining FDA approval. In
addition, in many countries outside the United States, it is required that the drug be approved for reimbursement before the
drug can be approved for sale in that country. Our potential third-party partners may not obtain approvals from regulatory
authorities outside the United States on a timely basis, if at all. Approval by the FDA does not ensure approval by
regulatory authorities in other countries or jurisdictions, and approval by one regulatory authority outside the United States
does not ensure approval by regulatory authorities in other countries or jurisdictions or by the FDA. However, failure to
obtain approval in one jurisdiction may impact our potential third-party partners’ ability to obtain approval elsewhere. Our
potential third-party partners may not be able to file for marketing approvals and may not receive necessary approvals to
commercialize our product candidates in any market.
A variety of risks associated with marketing our product candidates by our potential third-party partners
internationally could harm our business.
If our product candidates, if approved, are marketed internationally by our potential third-party partners, our
potential third-party partners would be subject to additional risks related to operating in foreign countries, including:
●
differing regulatory requirements in foreign countries;
●
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 a foreign market (with low or lower prices) rather than buying
them locally;
●
unexpected changes in tariffs, trade barriers, price and exchange controls and other regulatory requirements;
●
economic weakness, including inflation, or political instability in particular foreign economies and markets;
●
foreign reimbursement, pricing and insurance regimes;
●
compliance with tax, employment, immigration and labor laws for employees living or traveling abroad;
●
foreign taxes, including withholding of payroll taxes;
●
foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and
other obligations incident to doing business in another country;
●
difficulties staffing and managing foreign operations;
●
workforce uncertainty in countries where labor unrest is more common than in the United States;
●
potential liability under the U.S. Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”), or
comparable foreign regulations;
●
challenges enforcing contractual and intellectual property rights, especially in those foreign countries that do
not respect and protect intellectual property rights to the same extent as the United States;
●
production shortages resulting from any events affecting raw material supply or manufacturing capabilities
abroad;
●
logistical challenges resulting from distributing our product candidates to foreign countries; and
●
business interruptions resulting from geo-political actions, including war and terrorism.
These and other risks associated with international operations may compromise our ability to earn revenue from
arrangements with potential third-party partners for our product candidates.

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Any product candidate for which our potential third-party partners obtain marketing approval could be subject
to post-marketing restrictions or recall or withdrawal from the market, and our potential third-party partners may be
subject to penalties if they fail to comply with regulatory requirements or if they experience unanticipated problems with
our product candidates, when and if any of them are approved.
Any product candidate for which our potential third-party partners obtain marketing approval, along with the
manufacturing processes, post-approval clinical data, labeling, advertising and promotional activities for such product
candidate, will be subject to continual requirements of and review by the FDA and other regulatory authorities. These
requirements include submissions of safety and other post-marketing information and reports, registration and listing
requirements, cGMP requirements relating to manufacturing, quality control, quality assurance and corresponding
maintenance of records and documents, requirements regarding the distribution of samples to physicians and
recordkeeping. Even if marketing approval of a product candidate is granted, the approval may be subject to limitations on
the indicated uses for which the product candidate may be marketed or to the conditions of approval, including the
requirement to implement a risk evaluation and mitigation strategy. If any of our product candidates receives marketing
approval, the accompanying label may limit the approved use of our drug, which could limit sales of the drug by our
potential third-party partners.
The FDA may also impose requirements for costly post-marketing studies or clinical trials and surveillance to
monitor the safety or efficacy of the drug. The FDA closely regulates the post-approval marketing and promotion of drugs
to ensure drugs are marketed only for the approved indications and in accordance with the provisions of the approved
labeling. The FDA imposes stringent restrictions on manufacturers’ communications regarding off-label use and if our
potential third-party partners do not market our drugs for their approved indications, they may be subject to enforcement
action for off-label marketing. Physicians, on the other hand, may prescribe products for off-label uses. Although the FDA
and other regulatory agencies do not regulate a physician’s choice of drug treatment made in the physician’s independent
medical judgment, they do restrict promotional communications from companies or their sales force with respect to off-
label uses of products for which marketing clearance has not been issued. However, companies may share truthful and not
misleading information that is otherwise consistent with the product’s FDA approved labeling. Violations of the FDCA
relating to the promotion of prescription drugs may lead to investigations alleging violations of federal and state health care
fraud and abuse laws, as well as state consumer protection laws.
In addition, later discovery of previously unknown adverse events or other problems with our product candidates,
manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may have negative
consequences, including:
●
restrictions on such product candidates, manufacturers or manufacturing processes;
●
restrictions on the labeling or marketing of a product;
●
restrictions on drug distribution or use;
●
requirements to conduct post-marketing studies or clinical trials;
●
warning letters;
●
recall or withdrawal of the products from the market;
●
refusal to approve pending applications or supplements to approved applications;
●
clinical holds;
●
fines, restitution or disgorgement of profits or revenue;
●
suspension or withdrawal of marketing approvals;
●
refusal to permit the import or export of our products;
●
drug seizure; or
●
injunctions or the imposition of civil or criminal penalties.
Non-compliance with the European Union’s requirements regarding safety monitoring or pharmacovigilance, and
with requirements related to the development of products for the pediatric population, can also result in significant
financial penalties. Similarly, failure to comply with the European Union’s requirements regarding the protection of
personal information can also lead to significant penalties and sanctions. These and other risks associated with the failure
by our potential third-party partners to comply with regulatory requirements may compromise our ability to earn revenue
from arrangements with such third-party partners for our product candidates.

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Our potential third-party partners’ relationships with third-party payors, health care professionals and
customers in the United States and elsewhere may be subject, directly or indirectly, to applicable anti-kickback, fraud
and abuse, false claims, physician payment transparency, health information privacy and security and other health care
laws and regulations, and any failure to comply with such laws and regulations could have a material adverse effect on
our ability to earn revenue from arrangements with such third-party partners for our product candidates.
Health care providers, physicians and third-party payors in the United States and elsewhere will play a primary
role in the recommendation and prescription of any of our product candidates for which marketing approval is obtained.
Our potential third-party partners’ arrangements with third-party payors, health care professionals and customers may
expose them to broadly applicable fraud and abuse and other health care laws and regulations, including, without
limitation, the federal Anti-Kickback Statute and the federal civil False Claims Act, that may constrain the business or
financial arrangements and relationships through which they sell, market and distribute any product candidates for which
marketing approval is obtained. In addition, we and our potential third-party partners may be subject to transparency laws
and patient privacy regulation by the federal government and by the U.S. states and foreign jurisdictions in which we or
they conduct business. The applicable federal, state and foreign health care laws and regulations that may affect our or our
potential third-party partners’ ability to operate include the following:
●
the federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly
and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in
kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or
recommendation of, any good or service, for which payment may be made under federal and state health care
programs such as Medicare and Medicaid. Further, several courts have interpreted the statute’s intent
requirement to mean that if any one purpose of an arrangement involving remuneration is to induce referrals
of federal health care covered business, the Anti-Kickback Statute has been violated. The intent standard was
further amended by the Affordable Care Act, to a stricter standard such that a person or entity no longer
needs to have actual knowledge of the statute or specific intent to violate it in order to have committed a
violation.  Moreover, the government may assert that a claim including items or services resulting from a
violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False
Claims Act;
●
federal civil and criminal false claims laws, including, without limitation, the federal civil False Claims Act
(that can be enforced through civil whistleblower or qui tam actions), and the civil monetary penalties law,
which impose criminal and civil penalties, against individuals or entities for knowingly presenting, or
causing to be presented, to the federal government, including the Medicare and Medicaid programs, claims
for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an
obligation to pay money to the federal government;
●
federal HIPAA, which imposes criminal and civil liability for, among other things, executing a scheme to
defraud any health care benefit program or making false statements relating to health care matters. Similar to
the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or
specific intent to violate it to have committed a violation;
●
HIPAA, as amended by HITECH, and their respective implementing regulations, which impose obligations
on covered health care providers, health plans, and health care clearinghouses, as well as their business
associates that create, receive, maintain or transmit individually identifiable health information for or on
behalf of a covered entity and their subcontractors that use, disclose, access, or otherwise process protected
health information, with respect to safeguarding the privacy, security and transmission of individually
identifiable health information;
●
the federal Open Payments program, created under Section 6002 of the Affordable Care Act (commonly
known as the Physician Payments Sunshine Act) and its implementing regulations, which requires specified
manufacturers of drugs, devices, biologics or medical supplies for which payment is available under
Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to report annually
to CMS information related to “payments or other transfers of value” made to physicians, which is defined to
include doctors, dentists, optometrists, podiatrists and chiropractors, other health care professionals (such as
physician assistants and nurse practitioners), and teaching hospitals, and for applicable manufacturers to
report annually to CMS information regarding ownership and investment interests held by physicians and
their immediate family members; and
●
analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which
may apply to sales or marketing arrangements and claims involving health care items or services reimbursed
by non-governmental third-party payors, including private insurers; state and foreign laws that require

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pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines
and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments
that may be made to health care providers; state, local and foreign laws that require drug manufacturers to
report information related to payments and other transfers of value to physicians and other health care
providers or marketing expenditures; state laws that require drug manufacturers to report pricing information
regarding certain drugs; and/or that require registration of certain employees engaged in marketing activities
in the location; and state and foreign laws governing the privacy and security of health information in certain
circumstances, many of which differ from each other in significant ways and often are not preempted by
HIPAA, thus complicating compliance efforts.
Efforts to ensure that our or our potential third-party partners’ business arrangements with third parties will
comply with applicable health care laws and regulations may involve substantial costs. It is possible that governmental
authorities will conclude that our or our potential third-party partners’ business practices, including relationships with
physicians and other health care providers, some of whom may recommend, purchase and/or prescribe our product
candidates, if approved, may not comply with current or future statutes, regulations or case law involving applicable fraud
and abuse or other health care laws and regulations. By way of example, some of our consulting arrangements with
physicians may not meet all of the criteria of the personal services safe harbor under the federal Anti-Kickback Statute.
Accordingly, they may not qualify for safe harbor protection from government prosecution. A business arrangement that
does not substantially comply with a safe harbor, however, is not necessarily illegal under the Anti-Kickback Statute, but
may be subject to additional scrutiny by the government.
If our or our potential third-party partners’ operations are found to be in violation of any of these laws or any other
governmental regulations that may apply to us or them, we or our potential third-party partners may be subject to
significant civil, criminal and administrative penalties, including, without limitation, damages, fines, disgorgement,
imprisonment, exclusion from participation in government health care programs, such as Medicare and Medicaid,
additional reporting requirements and oversight if we or they become subject to a corporate integrity agreement or similar
agreement to resolve allegations of non-compliance with these laws and the curtailment or restructuring of our or their
operations, which could have a material adverse effect on our ability to earn revenue from arrangements with such third-
party partners for our product candidates. If any physician or other health care provider or entity with whom we or our
potential third-party partners expect to do business is found not to be in compliance with applicable laws, it may be subject
to significant criminal, civil or administrative sanctions, including exclusions from participation in government health care
programs, which could also materially affect our ability to earn revenue from arrangements with such third-party partners
for our product candidates.
Recently enacted and future legislation may increase the difficulty and cost for our potential third-party
partners to obtain marketing approval of our product candidates and commercialize our product candidates, if
approved, and affect the prices our potential third-party partners may obtain.
In the United States, and some foreign jurisdictions, there have been a number of legislative and regulatory
changes and proposed changes regarding the health care system that could prevent or delay marketing approval of our
product candidates, restrict or regulate post-approval activities and affect our potential third-party partners’ ability to
profitably sell any of our product candidates for which our potential third-party partners obtain marketing approval, and
consequently affect our ability to earn revenue from arrangements with such third-party partners for our product
candidates.
Among policy makers and payors in the United States and elsewhere, there is significant interest in promoting
changes in health care systems with the stated goals of containing health care costs, improving quality and/or expanding
access. In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been
significantly affected by major legislative initiatives. The Affordable Care Act, which was signed into law in 2010, is a
sweeping law intended to broaden access to health insurance, reduce or constrain the growth of health care spending,
enhance remedies against fraud and abuse, add new transparency requirements for the health care and health insurance
industries, impose new taxes and fees on the health industry and impose additional health policy reforms.
There have been executive branch, judicial and Congressional challenges and amendments to certain aspects of
the Affordable Care Act. For example, on August 16, 2022, President Biden signed the IRA into law, which among other
things, extends enhanced subsidies for individuals purchasing health insurance coverage in Affordable Care Act
marketplaces through plan year 2025. The IRA also eliminates the “donut hole” under the Medicare Part D program

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beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and through a newly established
manufacturer discount program. It is possible that the Affordable Care Act will be subject to additional challenges and
amendments in the future. It is unclear how such challenges and any additional health care reform measures of the second
Trump administration will impact the Affordable Care Act and our business.
In addition, other legislative changes have been proposed and adopted since the Affordable Care Act was enacted.
These changes included aggregate reductions to Medicare payments to providers of 2% per fiscal year that became
effective on April 1, 2013 and, due to subsequent legislative amendments to the statute, including the BBA and the
Infrastructure Investment and Jobs Act, will stay in effect through 2032 unless additional Congressional action is taken.
Any similar new laws may result in additional reductions in Medicare and other health care funding, which could have a
material adverse effect on our ability to earn revenue from arrangements with our potential third-party partners for our
product candidates.
We expect that the Affordable Care Act, as well as other health care reform measures that may be adopted in the
future, may result in more rigorous coverage criteria and in additional downward pressure on the price that our potential
third-party partners receive for any approved product candidate. Any reduction in reimbursement from Medicare or other
government programs may result in a similar reduction in payments from private payors. The implementation of cost
containment measures or other health care reforms may prevent our potential third-party partners from being able to
generate revenue, attain profitability, or commercialize our product candidates, if approved, which in turn may impact our
ability to earn revenue from arrangements with such third-party partners for our product candidates.
Legislative and regulatory proposals have been made to expand post-approval requirements and restrict sales and
promotional activities for drug and biologic products. For example, the IRA, among other things, (1) directs HHS to
negotiate the price of certain single-source drugs and biologics that have been on the market for at least 7 years covered
under Medicare and (2) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that
outpace inflation. These provisions took effect progressively starting in fiscal year 2023, although the Medicare Drug Price
Negotiation Program is currently subject to legal challenges. On August 15, 2024, HHS announced the agreed-upon prices
of the first ten drugs that were subject to price negotiations, which take effect in January 2026. HHS will select up to
fifteen additional products covered under Part D for negotiation in 2025. Each year thereafter more Part B and Part D
products will become subject to the Medicare Drug Price Negotiation Program. On December 7, 2023, the Biden
administration announced an initiative to control the price of prescription drugs through the use of march-in rights under
the Bayh-Dole Act. On December 8, 2023, the National Institute of Standards and Technology published for comment a
Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights which for the first time includes
the price of a product as one factor an agency can use when deciding to exercise march-in rights. While march-in rights
have not previously been exercised, it is uncertain if that will continue under the new framework. It is unclear whether
these or similar policy initiatives will be implemented in the future. The effect of reducing prices and reimbursement for
certain of our product candidates, if approved, could significantly impact our business and consolidated results of
operations. In addition, the IRA may meaningfully influence our and pharmaceutical industry business strategies. In
particular, it may reduce the attractiveness of investment in small molecule and biologic innovation. Further, we expect
additional health reform measures may be implemented in the future, particularly in light of the recent U.S. Presidential
and Congressional elections.
At the state level, legislatures have become increasingly active in passing legislation and implementing
regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement
constraints, discounts, restrictions on certain drug access and marketing cost disclosure and transparency measures, and, in
some cases, designed to encourage importation from other countries and bulk purchasing. For example, on January 5, 2024,
the FDA approved Florida’s proposal to import certain drugs from Canada for specific state healthcare programs. It is
unclear if and how this program will be implemented and whether it will be subject challenges in the United States or
Canada. Other states have also submitted proposals that are pending review by the FDA. Any such approved importation
plans, if implemented, may result in lower drug prices for products covered by those programs. We cannot be sure whether
additional legislative changes will be enacted, or whether the FDA regulations, guidance or interpretations will be changed,
or what the impact of such changes on obtaining marketing approvals for our product candidates, if any, may be. In
addition, increased scrutiny by the U.S. Congress of the FDA’s approval process may significantly delay or prevent
marketing approval, as well as subject our potential third-party partners to more stringent drug labeling and post-marketing
testing and other requirements. These risks may compromise our ability to earn revenue from arrangements with such
third-party partners for our product candidates.

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Our biological product candidates may face competition sooner than anticipated.
The BPCIA created an abbreviated approval pathway for biological products that are biosimilar to or
interchangeable with an FDA-licensed reference biological product. Under the BPCIA, an application for a biosimilar
product may not be submitted to the FDA until four years following the date that the reference product was first licensed
by the FDA. In addition, the approval of a biosimilar product may not be made effective by the FDA until 12 years from
the date on which the reference product was first licensed. During this 12-year period of exclusivity, another company may
still market a competing version of the reference product if the FDA approves a full BLA for the competing product
containing the applicant’s own preclinical data and data from adequate and well-controlled clinical trials to demonstrate the
safety, purity and potency of its product.
Bosakitug and ATI-052, if approved, may not qualify for the 12-year period of exclusivity, which allows the FDA
to approve a biosimilar product any time after the reference product was first licensed by the FDA. Even if the reference
product exclusivity is awarded upon licensure by FDA, there is a risk that this exclusivity could be shortened due to
Congressional action or otherwise, or that the FDA will not consider bosakitug or ATI-052 to be reference products for
competing products, potentially creating the opportunity for competition sooner than anticipated. Moreover, the extent to
which a biosimilar, once approved, could be substituted for any one of our reference products in a way that is similar to
traditional generic substitution for non-biological products will depend on a number of marketplace and regulatory factors
that are still developing. If we cannot obtain exclusivity for bosakitug and ATI-052 under the BPCIA, we could face
competition sooner than anticipated, which could harm our business.
Governments outside the United States tend to impose strict price controls, which may adversely affect our
revenue.
In some countries, particularly the countries of the European Union, the pricing of prescription pharmaceuticals is
subject to governmental control. In these countries, pricing negotiations with governmental authorities can take
considerable time after the receipt of marketing approval for a drug. To obtain coverage and reimbursement or pricing
approval in some countries, our potential third-party partners may be required to conduct a clinical trial that compares the
cost-effectiveness of our product candidate to other available procedures. If reimbursement of our product candidates is
unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, our potential third-party partners may
not able to generate revenue, which in turn may adversely affect our ability to earn revenue from arrangements with such
third-party partners for our product candidates. 
If we fail to comply with environmental, health and safety laws and regulations, we could become subject to
fines or penalties or incur costs that could harm our business.
We are subject to numerous environmental, health and safety laws and regulations, including those governing
laboratory procedures and the handling, use, storage, treatment and disposal of hazardous materials and wastes. Our
operations involve the use of hazardous and flammable materials, including chemicals and biological materials. Our
operations also produce hazardous waste products. We generally contract with third parties for the disposal of these
materials and wastes. We cannot eliminate the risk of contamination or injury from these materials. In the event of
contamination or injury resulting from our use of hazardous materials, we could be held liable for any resulting damages,
and any liability could exceed our resources. We also could incur significant costs associated with civil or criminal fines
and penalties for failure to comply with such laws and regulations. 
Although we maintain workers’ compensation insurance to cover us for costs and expenses we may incur due to
injuries to our employees resulting from the use of hazardous materials, this insurance may not provide adequate coverage
against potential liabilities. We do not maintain insurance for environmental liability or toxic tort claims that may be
asserted against us in connection with our storage or disposal of biological, hazardous or radioactive materials.
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 development or manufacturing
efforts. Our failure to comply with these laws and regulations also may result in substantial fines, penalties or other
sanctions.

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We and the third parties with whom we work are subject to stringent and evolving U.S. and foreign laws,
regulations, and rules, contractual obligations, industry standards, policies and other obligations related to data privacy
and security.  Our actual or perceived failure (or that of the third parties with whom we work) to comply with such
obligations could lead to regulatory investigations or actions; litigation (including class claims) and mass arbitration
demands; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; and
other adverse business consequences.
In the ordinary course of business, we collect, receive, store, process, generate, use, transfer, disclose, make
accessible, protect, secure, dispose of, transmit, and share (collectively, “process”) personal data and other sensitive
information, including proprietary and confidential business data, trade secrets, intellectual property, personnel data, data
from participants in our clinical trials, and other sensitive third-party data (collectively, “sensitive data”). Our data
processing activities subject us to numerous data privacy and security obligations, such as various laws, regulations,
guidance, industry standards, external and internal privacy and security policies, contractual requirements, and other
obligations relating to data privacy and security.
In the United States, federal, state, and local governments have enacted numerous data privacy and security laws,
including data breach notification laws, personal data privacy laws, consumer protection laws (e.g., Section 5 of the
Federal Trade Commission Act), and other similar laws (e.g., wiretapping laws). Numerous U.S. states have enacted
comprehensive privacy laws that impose certain obligations on covered businesses, including providing specific
disclosures in privacy notices and affording residents with certain rights concerning their personal data. As applicable, such
rights may include the right to access, correct, or delete certain personal data, and to opt-out of certain data processing
activities, such as targeted advertising, profiling, and automated decision-making. The exercise of these rights may impact
our business operations. Certain states also impose stricter requirements for processing certain personal data, including
sensitive information, such as conducting data privacy impact assessments. These state laws allow for statutory fines for
noncompliance. For example, the California Consumer Privacy Act of 2018 (“CCPA”), applies to personal data of
consumers, business representatives, and employees who are California residents, and requires businesses to provide
specific disclosures in privacy notices and honor requests of such individuals to exercise certain privacy rights. The CCPA
provides for fines and allows private litigants affected by certain data breaches to recover significant statutory damages.
Although the CCPA exempts some data processed in the context of clinical trials, the CCPA increases compliance costs and
potential liability with respect to other personal data we maintain about California residents. Similar laws are being
considered in several other states, as well as at the federal and local levels, and we expect more states to pass similar laws
in the future. While these laws in other states, like the CCPA, exempt some data processed in the context of clinical trials,
these developments may further complicate compliance efforts, and increase legal risk and compliance costs for us and the
third parties upon whom we rely.
In addition to “comprehensive” state privacy laws like CCPA, we are currently and may become in the future
subject to new state laws governing the privacy of consumer health data. For example, Washington’s My Health My Data
Act broadly defines consumer health data, places restrictions on processing consumer health data (including imposing
stringent requirements for consents), provides consumers certain rights with respect to their health data, and creates a
private right of action to allow individuals to sue for violations of the law. Other states are considering and may adopt
similar laws.  
Outside the United States, an increasing number of laws, regulations, and industry standards may govern data
privacy and security.   For example, the European Union’s General Data Protection Regulation (“EU GDPR”) and the
United Kingdom’s GDPR (“UK GDPR”) impose strict requirements for processing personal data. For example, under
GDPR, companies may face temporary or definitive bans on data processing and other corrective actions; fines of up to 20
million Euros under the EU GDPR, 17.5 million pounds sterling under the UK GDPR or, in each case, 4% of annual global
revenue, whichever is greater; or private litigation related to processing of personal data brought by classes of data subjects
or consumer protection organizations authorized at law to represent their interests.
In addition, we may be unable to transfer personal data from Europe and other jurisdictions to the United States or
other countries due to data localization requirements or limitations on cross-border data flows.   Europe and other
jurisdictions have enacted laws requiring data to be localized or limiting the transfer of personal data to other countries.  In
particular, the EEA and the United Kingdom (“UK”) have significantly restricted the transfer of personal data to the United
States and other countries whose privacy laws it generally believes are inadequate.  Other jurisdictions may adopt or have
already adopted similarly stringent data localization and cross-border data transfer laws. Although there are currently
various mechanisms that may be used to transfer personal data from the EEA and UK to the United States in

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compliance with law, such as the EEA’s standard contractual clauses, the UK’s International Data Transfer Agreement /
Addendum, and the EU-U.S. Data Privacy Framework and the UK extension thereto (which allows for transfers to relevant
U.S.-based organizations who self-certify compliance and participate in the Framework), these mechanisms are subject to
legal challenges, and there is no assurance that we can satisfy or rely on these measures to lawfully transfer personal data to
the United States.  If there is no lawful manner for us to transfer personal data from the EEA, the UK, or other jurisdictions
to the United States, or if the requirements for a legally-compliant transfer are too onerous, we could face significant
adverse consequences, including the interruption or degradation of our operations, the need to relocate part of or all of our
data processing activities to other jurisdictions (such as Europe) at significant expense, increased exposure to regulatory
actions, substantial fines and penalties, the inability to transfer data and work with partners, vendors and other third parties,
and injunctions against our processing or transferring of personal data necessary to operate our business. Additionally,
companies that transfer personal data out of the EEA and UK to other jurisdictions, particularly to the United States, are
subject to increased scrutiny from regulators, individual litigants, and activities groups. Some European regulators have
ordered certain companies to suspend or permanently cease certain transfers of personal data out of Europe for allegedly
violating the GDPR’s cross-border data transfer limitations. Regulators in the United States such as the Department of
Justice are also increasingly scrutinizing certain personal data transfers and have proposed and may enact certain data
localization requirements, for example, the Biden Administration’s executive order Preventing Access to Americans’ Bulk
Sensitive Personal Data and United States Government-Related Data by Countries of Concern.  
In addition to data privacy and security laws, we are contractually subject to industry standards adopted by
industry groups and may in the future become subject to additional obligations.  We are also bound by other contractual
obligations related to data privacy and security, and our efforts to comply with such obligations may not be successful.
 
We publish privacy policies and make other statements concerning data privacy and security.  Regulators in the
United States are increasingly scrutinizing these statements, and if these policies or statements are found to be deficient,
lacking in transparency, deceptive, unfair, misleading, or misrepresentative of our practices, we may be subject to
investigation, enforcement actions by regulators, or other adverse consequences.
Obligations related to data privacy and security (and consumers’ data privacy expectations) are quickly changing,
becoming increasingly stringent, and creating uncertainty.  Additionally, these obligations may be subject to differing
applications and interpretations, which may be inconsistent or conflict among jurisdictions.  Preparing for and complying
with these obligations requires us to devote significant resources and may necessitate changes to our services, information
technologies, systems, and practices and to those of any third parties that process personal data on our behalf.
We may at times fail (or be perceived to have failed) in our efforts to comply with our data privacy and security
obligations.  Moreover, despite our efforts, our personnel or third parties on whom we rely may fail to comply with such
obligations, which could negatively impact our business operations.  If we or the third parties on which we rely fail, or are
perceived to have failed, to address or comply with applicable data privacy and security obligations, we could face
significant consequences, including but not limited to: government enforcement actions (e.g., investigations, fines,
penalties, audits, inspections, and similar); litigation (including class-action claims) and mass arbitration demands;
additional reporting requirements and/or oversight; bans on processing personal data; and orders to destroy or not use
personal data.  In particular, plaintiffs have become increasingly more active in bringing privacy-related claims against
companies, including class claims and mass arbitration demands.  Some of these claims allow for the recovery of statutory
damages on a per violation basis, and, if viable, carry the potential for significant statutory damages, depending on the
volume of data and the number of violations.  Any of these events could have a material adverse effect on our reputation,
business, or financial condition, including but not limited to: loss of customers; or stoppages in our business operations
(including clinical trials); inability to process personal data or to operate in certain jurisdictions; limited ability to develop
our product candidates; expenditure of time and resources to defend any claim or inquiry; adverse publicity; or substantial
changes to our business model or operations.  
We are subject to governmental economic sanctions laws and export and import controls that could impair our
potential third-party partners’ ability to compete in international markets or subject us or our potential third-party
partners to liability if we or they are not in compliance with applicable laws.
As a U.S. company, we are subject to U.S. import and export controls and economic sanctions laws and
regulations, and we are required to import and export our product candidates, technology and services in compliance with
those laws and regulations, including the U.S. Export Administration Regulations, U.S. Customs regulations, the

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International Traffic in Arms Regulations, and economic embargo and trade sanction programs administered by the U.S.
Treasury Department’s Office of Foreign Assets Control.  
U.S. economic sanctions and export control laws and regulations prohibit the shipment of certain products and
services to countries, governments and persons targeted by U.S. sanctions. While we are currently taking precautions to
prevent doing any business, directly or indirectly, with countries, governments and persons targeted by U.S. sanctions and
to ensure that our product candidates are not exported or used by countries, governments and persons targeted by U.S.
sanctions, such measures may be circumvented.
Furthermore, if we or our potential third-party partners export our product candidates, the exports may require
authorizations, including a license, a license exception or other appropriate government authorization. Complying with
export control and sanctions regulations may be time-consuming and may result in the delay or loss of sales opportunities.
Failure to comply with export control and sanctions regulations may expose us or our potential third-party partners to
government investigations and penalties.
If we are found to be in violation of U.S. sanctions or import or export control laws, it could result in civil and
criminal, monetary and non-monetary penalties, including possible incarceration for those individuals responsible for the
violations, the loss of export or import privileges and reputational harm.
We and our potential third-party partners are subject to anti-corruption and anti-money laundering laws with
respect to our and their operations and non-compliance with such laws can subject us to criminal and/or civil liability
and harm our business.
We and our potential third-party partners are subject to the FCPA, the U.S. domestic bribery statute contained in
18 U.S.C. § 201, the U.S. Travel Act, the USA PATRIOT Act and possibly other anti-bribery and anti-money laundering
laws in countries in which we conduct activities. Anti-corruption laws are interpreted broadly and prohibit companies and
their employees and third-party intermediaries from authorizing, offering or providing, directly or indirectly, improper
payments or benefits to recipients in the public or private sector. We or our potential third-party partners may engage third-
party intermediaries in connection with the development or commercialization of our product candidates, if approved, and
to obtain necessary permits, licenses and other regulatory approvals. We, our potential third-party partners or the third-
party intermediaries may have direct or indirect interactions with officials and employees of government agencies or state-
owned or affiliated entities. We can be held liable for the corrupt or other illegal activities of these third-party
intermediaries, our employees, representatives, contractors, partners and agents, even if we do not explicitly authorize such
activities. 
Noncompliance with anti-corruption and anti-money laundering laws could subject us to whistleblower
complaints, investigations, sanctions, settlements, prosecution, other enforcement actions, disgorgement of profits,
significant fines, damages, other civil and criminal penalties or injunctions, suspension and/or debarment from contracting
with certain persons, the loss of export privileges, reputational harm, adverse media coverage and other collateral
consequences. Responding to any action will likely result in a materially significant diversion of management’s attention
and resources and significant defense costs and other professional fees.
Risks Related to Employee Matters and Managing Our Growth
Our future success depends on our ability to retain key executives and to attract, retain and motivate qualified
personnel.
We are highly dependent on the management, development, clinical, financial, and business development
expertise of Dr. Neal Walker, our Chief Executive Officer, Hugh Davis, Ph.D, our Chief Operating Officer and President,
Kevin Balthaser, our Chief Financial Officer, Dr. Joseph Monahan, our Chief Scientific Officer, and James Loerop, our
Chief Business Officer, as well as the other members of our scientific and clinical teams. Although we have entered into
employment agreements with our executive officers, each of them may currently terminate their employment with us or
resign at any time. We do not maintain “key person” insurance for any of our key executives. 
Recruiting and retaining qualified scientific, manufacturing and clinical personnel will also be critical to our
success. The loss of the services of our executive officers or other key employees could impede the achievement of our
development objectives and seriously harm our ability to successfully implement our business strategy. Furthermore,

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replacing executive officers and key employees may be difficult and may take an extended period of time because of the
limited number of individuals in our industry with the breadth of skills and experience required to successfully develop and
partner product candidates. Competition to hire from this limited pool is intense, and we may be unable to hire, train, retain
or motivate these key personnel on acceptable terms given the competition among numerous pharmaceutical and
biotechnology companies for similar personnel. We also experience competition for the hiring of scientific and clinical
personnel from universities and research institutions. In addition, we rely on consultants and advisors, including scientific
and clinical advisors, to assist us in formulating our development strategy. Our consultants and advisors may have
commitments under employment, consulting or advisory contracts with other entities that may limit their availability to us.
If we are unable to continue to attract and retain high quality personnel, our ability to pursue our growth strategy will be
limited. 
Our employees, independent contractors, consultants, third-party partners, principal investigators, CROs and
vendors may engage in misconduct or other improper activities, including non-compliance with regulatory standards
and requirements.
We are exposed to the risk that our employees, independent contractors, consultants, third-party partners, principal
investigators, CROs and vendors may engage in fraudulent conduct or other illegal activity. Misconduct by these parties
could include intentional, reckless and/or negligent conduct or disclosure of unauthorized activities to us that violates FDA
regulations, including those laws requiring the reporting of true, complete and accurate information to the FDA,
manufacturing standards, federal and state health care laws and regulations, and laws that require the true, complete and
accurate reporting of financial information or data. In particular, sales, marketing and business arrangements by our
potential third-party partners in the health care industry are subject to extensive laws and regulations intended to prevent
fraud, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range
of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business
arrangements. Misconduct by these parties could also involve the improper use of individually identifiable information,
including, without limitation, information obtained in the course of clinical trials, which could result in regulatory
sanctions and serious harm to our reputation. We have adopted a code of business conduct and ethics, but it is not always
possible to identify and deter misconduct, and the precautions we take to detect and prevent this activity may not be
effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or
other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. 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, including the imposition of significant civil, criminal and administrative penalties,
including, without limitation, damages, fines, disgorgement, imprisonment, exclusion from participation in government
health care programs, such as Medicare and Medicaid, additional reporting obligations and oversight if we are subject to a
corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws, and the
curtailment or restructuring of our operations.
In addition, we have a hybrid work model of remote and in-person operations for our employees that enables us to
continue to develop our product candidates and provide contract research services to our clients. The effects of our hybrid
work model may negatively impact productivity, disrupt our business and delay our preclinical drug development and
clinical trials and timelines. These and similar, and perhaps more severe, disruptions in our operations could negatively
impact our business, operating results and financial condition.
Risks Related to Ownership of Our Common Stock
The trading price of the shares of our common stock has been and is likely to continue to be volatile.
Our stock price has been and is likely to continue to be volatile. The stock market in general and the market for
biotechnology companies in particular have experienced extreme volatility that has often been unrelated to the operating
performance of particular companies. As a result of this volatility, investors may not be able to sell their common stock at
or above the price paid for the shares. The market price for our common stock may be influenced by many factors,
including:
●
the commencement, enrollment and/or results of any preclinical studies and clinical trials we may conduct, or
changes in the development status of our product candidates;
●
any delay in our regulatory filings for any of our product candidates and any adverse development or
perceived adverse development with respect to the applicable regulatory authority’s review of such filings,

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including without limitation the FDA’s issuance of a “refusal to file” letter or a request for additional
information;
●
adverse results from, delays in or termination of clinical trials;
●
adverse regulatory decisions, including failure of any of our product candidates to receive marketing
approval;
●
unanticipated serious safety concerns related to the use of any product candidate or previously sold
commercial product;
●
changes in financial estimates by us or by any securities analysts who might cover our stock;
●
conditions or trends in our industry;
●
changes in the structure of health care payment systems;
●
changes in the market valuations of similar companies;
●
stock market price and volume fluctuations of comparable companies and, in particular, those that operate in
the biotechnology industry;
●
publication of research reports about us or our industry or positive or negative recommendations or
withdrawal of research coverage by securities analysts;
●
announcements by us or our competitors of significant acquisitions, strategic partnerships or divestitures;
●
announcements of investigations or regulatory scrutiny of our operations or lawsuits filed against us;
●
investors’ general perception of our company and our business;
●
recruitment or departure of key personnel;
●
overall performance of the equity markets;
●
trading volume of our common stock;
●
disputes or other developments relating to proprietary rights, including patents, litigation matters and our
ability to obtain patent protection for our technologies;
●
significant lawsuits, including patent or stockholder litigation;
●
general political and economic conditions; and
●
other events or factors, many of which are beyond our control.
In the past, stockholders have initiated class action lawsuits against us and other pharmaceutical companies
following periods of volatility in the market prices of these companies’ stock. We have entered into indemnification
agreements with our executive officers and directors which provide, among other things, that we will indemnify such
officer or director, under the circumstances and to the extent provided for therein, for expenses, damages, judgments, fines
and settlements he or she may be required to pay in actions or proceedings which he or she is or may be made a party by
reason of his or her position as our director, officer or other agent, and otherwise to the fullest extent permitted under
Delaware law and our bylaws. Such additional litigation, if instituted against us, could cause us to incur substantial costs
and divert management’s attention and resources from our business.
If we fail to maintain compliance with the listing requirements of the Nasdaq Global Select Market, we may
be delisted and the price of our common stock and our ability to access the capital markets could be negatively
impacted.
 
Our common stock is currently listed on the Nasdaq Global Select Market. To maintain the listing of our
common stock on the Nasdaq Global Select Market, we are required to meet certain listing requirements, including,
among others, either: (i) a minimum closing bid price of $1.00 per share, a market value of publicly held shares
(excluding shares held by our executive officers, directors and 10% or more stockholders) of at least $5 million and
stockholders’ equity of at least $10 million; or (ii) a minimum closing bid price of $1.00 per share, a market value of
publicly held shares (excluding shares held by our executive officers, directors, affiliates and 10% or more stockholders)
of at least $15 million and a total market value of listed securities of at least $50.0 million.
 
We may fail to satisfy one or more of the Nasdaq Global Select Market’s requirements for continued listing of our
common stock in the future. There can be no assurance that we will be successful in maintaining the listing of our common
stock on the Nasdaq Global Select Market, or, if transferred, on the Nasdaq Capital Market. This could impair the liquidity
and market price of our common stock. In addition, the delisting of our common stock from a national exchange could
have a material adverse effect on our access to capital markets, and any limitation on market liquidity or reduction in the
price of our common stock as a result of that delisting could adversely affect our ability to raise capital on terms acceptable
to us, or at all.

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Sales of a substantial number of shares of our common stock into the market could cause the market price of
our common stock to drop significantly, even if our business is doing well.
Sales of a substantial number of shares of our common stock in the public market could occur at any time. If our
stockholders sell, or the market perceives that our stockholders intend to sell, substantial amounts of our common stock in
the public market, the market price of our common stock could decline significantly.
In addition, we have filed registration statements on Form S-8 under the Securities Act registering the issuance of
shares of common stock subject to options or other equity awards issued or reserved for future issuance under our equity
incentive plans. Shares registered under these registration statements are available for sale in the public market subject to
vesting arrangements and exercise of options.
Further, we have in the past and may in the future issue equity securities in connection with financings,
acquisitions or other strategic investments. Any such issuances of additional capital stock may cause stockholders to
experience significant dilution of their ownership interests and the per share value of our common stock to decline.
Provisions in our corporate charter documents and under Delaware law may prevent or frustrate attempts by
our stockholders to change our management and hinder efforts to acquire a controlling interest in us, and the market
price of our common stock may be lower as a result.
There are provisions in our certificate of incorporation and bylaws that may make it difficult for a third party to
acquire, or attempt to acquire, control of our company, even if a change of control was considered favorable by some or all
of our stockholders. For example, our board of directors has the authority to issue up to 10,000,000 shares of preferred
stock. The board of directors can fix the price, rights, preferences, privileges, and restrictions of the preferred stock without
any further vote or action by our stockholders. The issuance of shares of preferred stock may delay or prevent a change of
control transaction. As a result, the market price of our common stock and the voting and other rights of our stockholders
may be adversely affected. An issuance of shares of preferred stock may result in the loss of voting control to other
stockholders.
Our charter documents also contain other provisions that could have an anti-takeover effect, including:
●
only one of our three classes of directors is elected each year;
●
stockholders are not entitled to remove directors other than by a 66 2/3% vote and only for cause;
●
stockholders are not permitted to take actions by written consent;
●
stockholders cannot call a special meeting of stockholders; and
●
stockholders must give advance notice to nominate directors or submit proposals for consideration at
stockholder meetings.
In addition, we are subject to the anti-takeover provisions of Section 203 of the Delaware General Corporation
Law, which regulates corporate acquisitions by prohibiting Delaware corporations from engaging in specified business
combinations with particular stockholders of those companies. These provisions could discourage potential acquisition
proposals and could delay or prevent a change of control transaction. They could also have the effect of discouraging
others from making tender offers for our common stock, including transactions that may be in your best interests. These
provisions may also prevent changes in our management or limit the price that investors are willing to pay for our stock.
If we fail to maintain proper and effective internal controls, our ability to produce accurate financial
statements on a timely basis could be impaired.
We are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act and the rules  and
regulations of the stock market on which our common stock is listed. The Sarbanes-Oxley Act requires, among other
things, that we maintain effective disclosure controls and procedures and internal control over financial reporting and
perform system and process evaluation and testing of our internal control over financial reporting to allow management to
report on the effectiveness of our internal control over financial reporting. This requires that we incur substantial additional
professional fees and internal costs to expand our accounting and finance functions and that we expend significant
management efforts.

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We may identify weaknesses in our system of internal financial and accounting controls and procedures that could
result in a material misstatement of our consolidated financial statements. Our internal control over financial reporting will
not prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only
reasonable, not absolute, assurance that the control system’s objectives will be met. Because of the inherent limitations in
all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will
not occur or that all control issues and instances of fraud will be detected.
If we are unable to maintain proper and effective internal controls, we may not be able to produce timely and
accurate financial statements, and we may conclude that our internal control over financial reporting is not effective. If that
were to happen, the market price of our stock could decline, and we could be subject to sanctions or investigations by the
stock exchange on which our common stock is listed, the SEC, or other regulatory authorities.
We might not be able to utilize a significant portion of our net operating loss carryforwards and research and
development tax credit carryforwards.
As of December 31, 2024, we had federal and state net operating loss carryforwards (NOLs) of $469.4 million and
$401.1 million, respectively, which will begin to expire in 2032. Under federal law, federal NOL carryforwards generated
in tax years beginning after December 31, 2017 may be carried forward indefinitely but may only be used to offset 80% of
our taxable income annually. It is uncertain if and to what extent various states will conform to the federal tax law. As of
December 31, 2024, we also had federal research and development tax credit carryforwards of $21.9 million which will
begin to expire in 2032, and state research and development tax credit carryforwards of $0.1 million which will begin to
expire in 2030. These NOL and tax credit carryforwards could expire unused or due to limitation on use be unavailable to
offset future income tax liabilities. In addition, under Section 382 of the Internal Revenue Code of 1986, as amended, and
corresponding provisions of state law, if a corporation undergoes an “ownership change,” which is generally defined as a
greater than 50% change, by value, in its equity ownership over a three-year period, the corporation’s ability to use its pre-
change net operating loss carryforwards and other pre-change tax attributes to offset its post-change income may be
limited. Although we have experienced Section 382 ownership changes between 2012 and 2024, we have concluded that
we should have sufficient ability to utilize NOLs accumulated during the periods tested. In addition, we may have
experienced ownership changes since 2024 and may experience ownership changes in the future as a result of subsequent
shifts in our stock ownership, some of which may be outside of our control. If we determine that an ownership change has
occurred and our ability to use our historical NOL and tax credit carryforwards is materially limited, it might harm our
future operating results by effectively increasing our future tax obligations.
We do not anticipate paying any cash dividends on our common stock in the foreseeable future and our stock
may not appreciate in value.
We have not declared or paid cash dividends on our common stock to date. We currently intend to retain our
future earnings, if any, to fund the development and growth of our business. There is no guarantee that shares of our
common stock will appreciate in value or that the price at which our stockholders have purchased their shares will be able
to be maintained.
Exclusive forum provisions in our amended and restated certificate of incorporation and amended and restated
bylaws could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors,
officers or other employees.
Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of
Delaware is the exclusive forum for the following types of actions or proceedings under Delaware statutory or common
law: (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim for breach of a fiduciary
duty owed by any of our directors, officers or other employees to us or our stockholders, (iii) any action asserting a claim
arising pursuant to any provision of the Delaware General Corporation Law, our amended and restated certificate of
incorporation or our amended and restated bylaws or (iv) any action asserting a claim governed by the internal affairs
doctrine. This provision would not apply to suits brought to enforce a duty or liability created by the Exchange Act.
Furthermore, Section  22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all such
Securities Act actions. Accordingly, both state and federal courts have jurisdiction to entertain such claims. To prevent
having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts,
among other considerations, our amended and restated bylaws provide the federal district courts of the United States of
America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities

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Act. While the Delaware courts have determined that such choice of forum provisions are facially valid, a stockholder may
nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum provisions. In such
instance, we would expect to vigorously assert the validity and enforceability of the exclusive forum provisions of our
amended and restated certificate of incorporation and our amended and restated bylaws. This may require significant
additional costs associated with resolving such action in other jurisdictions and there can be no assurance that the
provisions will be enforced by a court in those other jurisdictions.
Our amended and restated certificate of incorporation and amended and restated bylaws further provide any
person or entity purchasing or otherwise acquiring any interest in shares of our common stock is deemed to have notice of
and consented to the foregoing provisions. These exclusive forum provisions may limit a stockholder’s ability to bring a
claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which
may discourage lawsuits against us and our directors, officers and other employees. If a court were to find either exclusive-
forum provision to be inapplicable or unenforceable in an action, we may incur further significant additional costs
associated with resolving the dispute in other jurisdictions, all of which could seriously harm our business.
Our holders of 5% or more of our capital stock collectively own a significant percentage of our outstanding
common stock and have the ability to exert significant control over matters subject to stockholder approval.
Our holders of 5% or more of our capital stock collectively own a significant percentage of our outstanding
common stock. As a result, these holders, if acting together, have significant influence over the outcome of corporate
actions requiring stockholder approval, including the election of directors, amendment of our organizational documents,
any merger, consolidation or sale of all or substantially all of our assets and any other significant corporate transaction. The
significant concentration of stock ownership may adversely affect the trading price of our common stock due to investors’
perception that conflicts of interest may exist or arise.
We are a “smaller reporting company” and, as a result of the reduced disclosure and governance requirements
applicable to smaller reporting companies, our common stock may be less attractive to investors.
We are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K, and we intend to take
advantage of some of the exemptions from reporting requirements that are applicable to other public companies that are not
smaller reporting companies, including:
●
not being required to comply with the auditor attestation requirements in the assessment of our internal
control over financial reporting; and
●
reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements
and registration statements.
We may take advantage of these reporting exemptions until we are no longer a smaller reporting company. We
will remain a smaller reporting company until the last day of any fiscal year for so long as either (1) the market value of
our shares of common stock held by non-affiliates does not equal or exceed $250.0 million as of June 30th of the prior year,
or (2) our annual revenues did not equal or exceed $100.0 million during such completed fiscal year and the market value
of our shares of common stock held by non-affiliates did not equal or exceed $700.0 million as of June 30th of the prior
year.
We cannot predict if investors will find our common stock less attractive because we will rely on these
exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market
for our common stock and our stock price may be more volatile.
General Risk Factors
If our information technology systems, those of third parties upon which we rely, or our data are or were
compromised, we could experience adverse consequences resulting from such compromise, including but not limited to
regulatory investigations or actions; litigation; fines and penalties; disruptions of our business operations; reputational
harm; loss of revenue or profits; and other adverse consequences.
In the ordinary course of our business, we and the third parties upon which we rely process sensitive data, and, as
a result, we and the third parties upon which we rely face a variety of evolving threats that could cause security incidents.

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Cyber-attacks, malicious internet-based activity, online and offline fraud, and other similar activities threaten the
confidentiality, integrity, and availability of our sensitive data and information technology systems, and those of the third
parties upon which we rely.  Such threats are prevalent and continue to rise, are increasingly difficult to detect, and come
from a variety of sources, including traditional computer “hackers,” threat actors, “hacktivists,” organized criminal threat
actors, personnel (such as through theft or misuse), sophisticated nation states, and nation-state-supported actors.  
Some actors now engage and are expected to continue to engage in cyber-attacks, including without limitation
nation-state actors for geopolitical reasons and in conjunction with military conflicts and defense activities.  During times
of war and other major conflicts, we and the third parties upon which we rely may be vulnerable to a heightened risk of
these attacks, including retaliatory cyber-attacks, that could materially disrupt our systems and operations, supply chain,
and ability to develop our product candidates and provide our services.  
We and the third parties upon which we rely are subject to a variety of evolving threats, including but not limited
to social-engineering attacks (including through deep fakes, which may be increasingly more difficult to identify as fake,
and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent
threat intrusions), denial-of-service attacks, credential stuffing, credential harvesting, personnel misconduct or error,
ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or
other information technology assets, adware, attacks enhanced or facilitated by AI, telecommunications failures,
earthquakes, fires, floods, and other similar threats.
In particular, severe ransomware attacks are becoming increasingly prevalent and can lead to significant
interruptions in our operations, ability to develop our product candidates or provide our services, loss of sensitive data and
income, reputational harm, and diversion of funds.  Extortion payments may alleviate the negative impact of a ransomware
attack, but we may be unwilling or unable to make such payments due to, for example, applicable laws or regulations
prohibiting such payments.  
Remote work has increased risks to our information technology systems and data, as more of our employees
utilize network connections, computers, and devices outside our premises or network, including working at home, while in
transit and in public locations.  Additionally, future or past business transactions (such as acquisitions or integrations) could
expose us to additional cybersecurity risks and vulnerabilities, as our systems could be negatively affected by
vulnerabilities present in acquired or integrated entities’ systems and technologies.  Furthermore, we may discover security
issues that were not found during due diligence of such acquired or integrated entities, and it may be difficult to integrate
companies into our information technology environment and security program.
In addition, our reliance on third-party service providers could introduce new cybersecurity risks and
vulnerabilities, including supply-chain attacks and other threats to our business operations.  We rely on third-party service
providers and technologies to operate critical business systems to process sensitive data in a variety of contexts, including,
without limitation, cloud-based infrastructure, data center facilities, SaaS platforms, encryption and authentication
technology, employee email and other functions. We also rely on third-party service providers to provide other products
and services, or otherwise to operate our business. Our ability to monitor these third parties’ information security practices
is limited, and these third parties may not have adequate information security measures in place. If our third-party service
providers experience a security incident or other interruption, we could experience adverse consequences. While we may
be entitled to damages if our third-party service providers fail to satisfy their privacy or security-related obligations to us,
any award may be insufficient to cover our damages, or we may be unable to recover such award. In addition, supply-chain
attacks have increased in frequency and severity, and we cannot guarantee that third parties’ infrastructure in our supply
chain or our third-party partners’ supply chains have not been compromised.
While we have implemented security measures designed to protect against security incidents, there can be no
assurance that these measures will be effective.  We take steps designed to detect, mitigate, and remediate vulnerabilities in
our information systems (such as our hardware and/or software). We may not, however, detect and remediate all such
vulnerabilities including on a timely basis. It may be difficult and/or costly to detect, investigate, mitigate, contain, and
remediate a security incident, and our efforts to do so may not be successful. Further, we may experience delays in
developing and deploying remedial measures and patches designed to address identified vulnerabilities. Vulnerabilities
could be exploited and result in a security incident. Actions taken by us or the third parties with whom we work to detect,
investigate, mitigate, contain, and remediate a security incident could result in outages, data losses, and disruptions of our
business. Threat actors may also gain access to other networks and systems after a compromise of our networks and

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systems. For example, we have been the target of unsuccessful phishing attempts in the past, and expect such attempts will
continue in the future.
Any of the previously identified or similar threats has caused and, in the future, could cause a security incident or
other interruption that could result in unauthorized, unlawful, or accidental acquisition, modification, destruction, loss,
alteration, encryption, disclosure of, or access to our sensitive data or our information technology systems, or those of the
third parties upon whom we rely.  A security incident or other interruption could disrupt our ability (and that of third parties
upon whom we rely) to operate our business.
We may expend significant resources or modify our business activities to try to protect against security incidents.
 Additionally, certain data privacy and security obligations has required and may in the future require us to implement and
maintain specific security measures or industry-standard or reasonable security measures to protect our information
technology systems and sensitive data.
Applicable data privacy and security obligations may require us to notify relevant stakeholders, including affected
individuals, customers, regulators, and investors, of security incidents.  Such disclosures are costly, and the disclosure or
the failure to comply with such requirements could lead to adverse consequences.
If we (or a third party upon whom we rely) experience a security incident or are perceived to have experienced a
security incident, we may experience adverse consequences, such as government enforcement actions (for example,
investigations, fines, penalties, audits, and inspections); additional reporting requirements and/or oversight; restrictions on
processing sensitive data (including personal data); litigation (including class claims); indemnification obligations;
negative publicity; reputational harm; monetary fund diversions; diversion of management attention; interruptions in our
operations (including availability of data); financial loss; and other similar harms.   Security incidents and attendant
consequences may prevent or cause customers to stop using our services, deter new customers from using our services, and
negatively impact our ability to grow and operate our business.
Our contracts may not contain limitations of liability, and even where they do, there can be no assurance that
limitations of liability in our contracts are sufficient to protect us from liabilities, damages, or claims related to our data
privacy and security obligations.  We cannot be sure that our insurance coverage will be adequate or sufficient to protect us
from or to mitigate liabilities arising out of our privacy and security practices, that such coverage will continue to be
available on commercially reasonable terms or at all, or that such coverage will pay future claims.
In addition to experiencing a security incident, third parties may gather, collect, or infer sensitive data about us
from public sources, data brokers, or other means that reveals competitively sensitive details about our organization and
could be used to undermine our competitive advantage or market position.
An active trading market for our common stock may not be sustained.
Although our common stock is listed on The Nasdaq Global Select Market, we cannot assure you that an active
trading market for our shares will be sustained. If an active market for our common stock is not sustained, it may be
difficult for investors in our common stock to sell shares without depressing the market price for the shares or to sell the
shares at all. 
If equity research analysts do not publish research or reports, or publish unfavorable research or reports,
about us, our business or our market, our stock price and trading volume could decline.
The trading market for our common stock is influenced by the research and reports that equity research analysts
publish about us or our business, our market and our competitors. Equity research analysts may elect not to initiate or
continue to provide research coverage of our common stock, and such lack of research coverage may adversely affect the
market price of our common stock. Even if we have equity research analyst coverage, we will not have any control over the
analysts or the content and opinions included in their reports. The price of our stock could decline if one or more equity
research analysts downgrade our stock or issue other unfavorable commentary or research. If one or more equity research
analysts ceases coverage of our company or fails to publish reports on us regularly, demand for our stock could decrease,
which in turn could cause our stock price or trading volume to decline.

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Unfavorable conditions, including inflationary pressure, in the global economy could limit our ability to grow
our business and negatively affect our operating results.
General worldwide economic conditions have experienced significant instability in recent years including the
recent global economic uncertainty and financial market conditions. For example, inflation rates, particularly in the United
States and United Kingdom, have increased recently to levels not seen in years, and increased inflation may result in
increases in our operating costs (including our labor costs), reduced liquidity and limits on our ability to access credit or
otherwise raise capital. Additionally, financial markets around the world have experienced volatility in connection with
geopolitical conflicts. These conditions make it extremely difficult for us to accurately forecast and plan future business
activities.
The issuance of additional stock in connection with financings, acquisitions, investments, our equity incentive
plan or otherwise will dilute all other stockholders.
Our certificate of incorporation authorizes us to issue up to 200,000,000 shares of common stock and up to
10,000,000 shares of preferred stock with such rights and preferences as may be determined by our board of directors.
Subject to compliance with applicable rules  and regulations, we may issue our shares of common stock or securities
convertible into our common stock from time to time in connection with a financing, acquisition, investment, our equity
incentive plan or otherwise. Any such issuance could result in substantial dilution to our existing stockholders and cause
the trading price of our common stock to decline. 
Changes in tax laws or regulations that are applied adversely to us may have a material adverse effect on our
business, cash flow, financial condition or results of operations.
New income, sales, use or other tax laws, statutes, rules, regulations or ordinances could be enacted at any time,
which could adversely affect our business operations and financial performance. For example, the Inflation Reduction Act
provides for a minimum tax equal to 15% of the adjusted financial statement income of certain large corporations, as well
as a 1% excise tax on certain share buybacks by public corporations that would be imposed on such corporations. In
addition, it is uncertain if and to what extent various states will conform to newly enacted federal tax legislation. Changes
in corporate tax rates, the realization of net deferred tax assets relating to our operations, the taxation of foreign earnings,
and the deductibility of expenses could have a material impact on the value of our deferred tax assets, could result in
significant one-time charges, and could increase our future U.S. tax expense.
We incur significant costs and demands upon management as a result of being a public company.
As a public company listed in the United States, we incur, and will continue to incur, particularly if we cease to
qualify as a “smaller reporting company,” significant legal, accounting and other costs. These costs could negatively affect
our financial results. In addition, changing laws, regulations and standards relating to corporate governance and public
disclosure, including regulations implemented by the SEC and The Nasdaq Stock Market, may increase legal and financial
compliance costs and make some activities more time-consuming. These laws, regulations and standards are subject to
varying interpretations and, as a result, their application in practice may evolve over time as new guidance is provided by
regulatory and governing bodies. We intend to invest resources to comply with evolving laws, regulations and standards,
and this investment may result in increased general and administrative expenses and a diversion of management’s time and
attention from revenue-generating activities to compliance activities. If notwithstanding our efforts to comply with new
laws, regulations and standards, we fail to comply, regulatory authorities may initiate legal proceedings against us and our
business may be harmed.
Failure to comply with these rules might also make it more difficult for us to obtain some types of insurance,
including director and officer liability insurance, and we might be forced to accept reduced policy limits and coverage or
incur substantially higher costs to obtain the same or similar coverage. The impact of these events could also make it more
difficult for us to attract and retain qualified persons to serve on our board of directors, on committees of our board of
directors or as members of senior management.
Artificial intelligence presents risks and challenges that can impact our business including by posing security
risks to our confidential information, proprietary information, and personal data.
Issues in the development and use of artificial intelligence, combined with an uncertain regulatory environment,

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may result in reputational harm, liability, or other adverse consequences to our business operations. As with many
technological innovations, artificial intelligence presents risks and challenges that could impact our business. We may
adopt and integrate generative artificial intelligence tools into our systems. Our vendors may incorporate generative
artificial intelligence tools into their offerings without disclosing this use to us, and the providers of these generative
artificial intelligence tools may not meet existing or rapidly evolving regulatory or industry standards with respect to
privacy and data protection and may inhibit our or our vendors’ ability to maintain an adequate level of service and
experience. If we, our vendors, or our third-party partners experience an actual or perceived breach or privacy or security
incident because of the use of generative artificial intelligence, we may lose valuable intellectual property and confidential
information and our reputation and the public perception of the effectiveness of our security measures could be harmed.
Further, bad actors around the world use increasingly sophisticated methods, including the use of artificial intelligence, to
engage in illegal activities involving the theft and misuse of personal information, confidential information, and intellectual
property. Any of these outcomes could damage our reputation, result in the loss of valuable property and information, and
adversely impact our business.
Item 1B. Unresolved Staff Comments
None.
Item 1C. Cybersecurity
Risk Management and Strategy
We rely on information technology and data to operate our business of developing product candidates and
providing contract research services. Our critical information technology resources include computer networks and
hardware, third party hosted services, communications systems and software, and critical data including confidential,
personal, proprietary and sensitive data (collectively, “Information Assets”). To operate our business, we also utilize certain
third-party service providers to perform a variety of functions, such as professional services, SaaS platforms, managed
services, cloud-based infrastructure, encryption and authentication technology, corporate productivity services, and other
functions. Accordingly, we have implemented and maintain certain risk assessment processes intended to identify
cybersecurity threats, determine their likelihood of occurring, and assess and manage potential material impact to our
business. We implement and maintain various information security and risk management processes designed to protect the
confidentiality, integrity, and availability of our Information Assets and mitigate harm to our business.
We rely on a multidisciplinary team (including members from information technology (“IT”), which reports to our
Chief Financial Officer, finance, and legal, as well as third party service providers as described further below) to identify,
assess, and manage cybersecurity threats that could impact our business. We assess the likelihood that such threats could
result in a material impact to our Information Assets, operations, ability to provide our services, core business functions,
personnel, reputation and identified critical business objectives.
Risks from cybersecurity threats are among those that we address in our general risk management program. We
identify, assess, and manage such threats by, among other things, monitoring the threat environment using manual and
automated tools, subscribing to reports and services that identify cybersecurity threats, conducting scans of the threat
environment, and conducting vulnerability assessments. We also engage third parties to conduct annual penetrations tests,
as well as to provide threat and security risk assessments and intelligence feeds.
 
Based on our assessment process and depending on the environment, we implement and maintain various
technical, physical and organizational measures, processes, standards and policies designed to manage and mitigate such
risks and potential material impacts. These measures we implement for certain of our Information Assets include: policies
and procedures designed to address cybersecurity threats, including an incident response plan; incident detection and
response; risk assessments; background checks on our personnel; encryption of data; network security controls; data
segregation; access controls; physical security; asset management, tracking and disposal; employee security training;
penetration testing; and cyber insurance.

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Our assessment and management of material risks from cybersecurity threats are integrated into our overall risk
management processes. For example, the IT department works with management to prioritize our risk management
processes and mitigate cybersecurity threats that are more likely to lead to a material impact to our business.
We work with third parties from time to time that assist us to identify, assess, and manage material risks from
cybersecurity threats, including, for example, professional services firms (including legal counsel), threat intelligence
service providers, cybersecurity software providers, managed cybersecurity service providers, forensic investigators, and
penetration testing firms.
For a description of the risks from cybersecurity threats that may materially affect us and how they may do so,
refer to “Item 1A. Risk factors” in this Annual Report, including “If our information technology systems, those of third
parties upon which we rely, or our data are or were compromised, we could experience adverse consequences resulting
from such compromise, including but not limited to regulatory investigations or actions; litigation; fines and penalties;
disruptions of our business operations; reputational harm; loss of revenue or profits; and other adverse consequences.”
Governance
Our board of directors, through its Audit Committee, is responsible for overseeing the Company’s risk
management strategy with respect to cybersecurity threats. The Audit Committee is responsible for overseeing the
Company’s cybersecurity risk management processes, including oversight of mitigation of risks from cybersecurity threats.
Our cybersecurity risk assessment and management processes are implemented and maintained by certain
Company management, including our Chief Financial Officer who is supported by our IT department which includes
personnel with experience overseeing and working with various cybersecurity tools. For example, our Senior Director of IT
has over 20 years of experience in IT infrastructure and cybersecurity, with extensive expertise in security frameworks,
regulatory compliance, and cloud infrastructure management.
Our cybersecurity risk management strategy relies on input from management to help us understand cybersecurity
risks, establish priorities, and determine the scope and details of our cybersecurity program and to implement it.
Management, including our Chief Financial Officer, is responsible for approving budgets, helping prepare for cybersecurity
incidents, approving cybersecurity processes, and reviewing security assessments and other security-related reports.
Management, including our Chief Financial Officer and General Counsel, is also responsible for hiring appropriate
personnel, engaging third party vendors, integrating cybersecurity considerations into the Company’s overall risk
management strategy, approving cybersecurity policies and procedures, and overseeing employee training. Our
cybersecurity incident response process involves members of management who also participate in our disclosure controls
and procedures.
Our cybersecurity incident response plan and information security incidence response procedures are designed to
escalate certain cybersecurity incidents to members of finance and legal, depending on the circumstances, who report to the
Chief Financial Officer and the General Counsel. The Chief Financial Officer and the General Counsel work with our
cybersecurity incident response team to help us mitigate and remediate cybersecurity incidents of which they are notified.
In addition, our cybersecurity incident response plan includes reporting to the Audit Committee for certain cybersecurity
incidents.
Members of management meet periodically with the IT department to discuss cybersecurity risk and to review our
cybersecurity program, and report to the Audit Committee. The Audit Committee holds meetings biannually to discuss
cybersecurity issues including our cybersecurity threats, and has a dedicated agenda during such meetings that is designed
to assist the Audit Committee to exercise its oversight function. These meetings involve regular presentations and reports
from management and third party providers, including updates of contemporary cybersecurity threats faced by us and steps
we are taking to address them.
Item 2. Properties
We lease 11,564 square feet of space for our headquarters in Wayne, Pennsylvania, which we use for our
therapeutics business. The lease has a term through February 2029.

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We also sublease 20,433 square feet of office and laboratory space in St. Louis, Missouri, which we use for our
therapeutics and contract research businesses. The sublease has an initial term through May 2029. We have the option to
extend the initial term for two additional five-year periods.
We believe that our facilities are suitable and adequate to meet our current needs.
Item 3. Legal Proceedings
From time to time we are subject to litigation and claims arising in the ordinary course of business. We are not
currently a party to any material legal proceedings and we are not aware of any other pending or threatened legal
proceeding against us that we believe could have a material adverse effect on our business, operating results, cash flows or
financial condition. 
Item 4. Mine Safety Disclosures
Not applicable.

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PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
Market Information for Common Stock
Our common stock is listed on the Nasdaq Global Select Market under the symbol “ACRS.”  
Dividend Policy
We have never declared or paid any dividends on our common stock. We anticipate that we will retain all of our
future earnings, if any, for use in the operation and expansion of our business and do not anticipate paying cash dividends
in the foreseeable future.
Stockholders
As of January 31, 2025, we had 107,918,821 shares of common stock outstanding held by 54 holders of record.
The actual number of stockholders is greater than this number of record holders and includes stockholders who are
beneficial owners but whose shares are held in street name by brokers and other nominees. This number of holders of
record also does not include stockholders whose shares may be held in trust by other entities.
Recent Sales of Unregistered Securities
None.
Purchases of Equity Securities by the Issuer and Affiliated Parties
None.
Stock Performance Graph
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide
the information required by Item 201(e) of Regulation S-K.
Item 6. [Reserved]

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations in
conjunction with the consolidated financial statements and the related notes to those statements included later in this
Annual Report on Form 10-K (this “Annual Report”). In addition to historical financial information, the following
discussion contains forward-looking statements that reflect our plans, estimates, beliefs and expectations that involve risks
and uncertainties. Our actual results and the timing of events could differ materially from those discussed in these forward-
looking statements. Factors that could cause or contribute to these differences include those discussed below and
elsewhere in this Annual Report, particularly in Part I, Item 1A. “Risk Factors,” and “Special Note Regarding Forward-
Looking Statements.”
Overview
We are a clinical-stage biopharmaceutical company focused on developing novel small and large molecule
product candidates for immuno-inflammatory diseases. Our proprietary KINect drug discovery platform combined with our
preclinical development capabilities allows us to identify and advance potential product candidates that we may develop
independently or in collaboration with third parties. In addition to identifying and developing our novel product candidates,
we are pursuing strategic alternatives, including identifying and consummating transactions with third-party partners, to
further develop, obtain marketing approval for and/or commercialize our novel product candidates. We also provide
contract research services to third parties enabled by our early-stage research and development expertise.
Financial Overview
Since our inception, we have incurred significant net losses. Our net loss was $132.1 million for the year ended
December 31, 2024 and $88.5 million for the year ended December 31, 2023. As of December 31, 2024, we had an
accumulated deficit of $902.9 million. We expect to incur significant expenses and operating losses for the foreseeable
future as we advance our product candidates from discovery through preclinical and clinical development.  In addition, our
product candidates, even if they are approved by regulatory agencies for marketing, may not achieve commercial success.
We may also not be successful in pursuing strategic alternatives, including identifying and consummating transactions with
third-party partners, to further develop, obtain marketing approval for and/or commercialize our product candidates.
Furthermore, we have incurred and expect to continue to incur significant costs associated with operating as a public
company, including legal, accounting, investor relations and other expenses. As a result, we will need substantial additional
funding to support our continuing operations.
We have historically financed our operations primarily with sales of equity securities and incurring indebtedness
in the form of loans from commercial lenders. In the near term, we expect to finance our operations through these and other
capital sources, including potential partnerships with other companies or other strategic transactions. We may be unable to
raise additional funds or enter into such other agreements or arrangements when needed on commercially acceptable terms,
or at all. If we fail to raise capital or enter into such agreements as, and when needed, we may have to significantly delay,
scale back or discontinue the development of one or more of our product candidates.
Impact of Macroeconomic Conditions on Our Business
Unfavorable conditions in the economy both in the United States and abroad may negatively affect the growth of
our business and our results of operations. For example, macroeconomic events, including inflationary pressure and
geopolitical conflicts, have led to economic uncertainty globally. The effect of macroeconomic conditions may not be fully
reflected in our results of operations until future periods. If, however, economic uncertainty increases or the global
economy worsens, our business, financial condition and results of operations may be harmed. For further discussion of the
potential impacts of macroeconomic events on our business, financial condition, and operating results, see the section titled
“Risk Factors.”
Acquisition and License Agreements
Exclusive License Agreement with Biosion
In November 2024, we entered into an exclusive license agreement (the “Biosion Agreement”) with Biosion, Inc.
(“Biosion”) pursuant to which we received the exclusive rights to develop, manufacture and commercialize bosakitug

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(ATI-045) and ATI-052 worldwide, excluding Mainland China, Macau, Hong Kong and Taiwan (“Greater China”). In
connection with the Biosion Agreement, we also entered into a collaboration agreement (the “CTTQ Agreement”) with
Biosion and Chia Tai Tianqing Pharmaceutical Group, Co., Ltd. (“CTTQ”), a licensee of bosakitug in Greater China.
As partial consideration for the rights and licenses under the Biosion Agreement and CTTQ Agreement, we
agreed to, in the aggregate, (i) pay $30.0 million in upfront cash consideration, plus $4.5 million for the reimbursement of
certain development costs, (ii) issue warrants (the “Warrants”) to purchase 14,281,985 shares of our common stock and (iii)
pay $6.2 million for the reimbursement of certain development costs and drug product material as set forth in the Biosion
Agreement. We determined that the transaction was an acquisition of assets with no alternative future use and therefore
expensed as incurred the fair value of the consideration given of $85.6 million as a component of in-process research and
development expense during the year ended December 31, 2024. We incurred $1.3 million in expenses related to this
transaction which were expensed as incurred.
In addition, we agreed to pay, in the aggregate, (i) up to $125 million upon the achievement of specified
regulatory milestones commencing with product approval, (ii) up to $795 million upon the achievement of specified sales
milestones, (iii) a tiered low-to-mid single digit royalty based upon a percentage of annual net sales, subject to specified
reductions as set forth in the Biosion Agreement, and (iv) a portion of any sublicense consideration received from the grant
of any sublicense or similar rights under any of the rights or licenses granted to us under the Biosion Agreement. We will
expense these payments in the period when either they are determined to be probable of occurring or when the payment is
triggered.
The Warrants have an initial exercise price of $0.00001 per share, subject to adjustment as provided in the
Warrants. The Warrants are immediately exercisable, subject to any applicable overseas direct investment filing that may
be required for the holders. The Warrants will terminate when exercised in full. We classified the Warrants within equity
because they are indexed to our own stock. We assigned an estimated fair value of $44.8 million to the Warrants, which
was based on the fair value of our common stock on the date of issuance less the nominal exercise price of $0.00001 per
share.
Royalty Purchase Agreement with OCM IP Healthcare Portfolio LP
In July 2024, we entered into a royalty purchase agreement with OCM IP Healthcare Portfolio LP, an investment
vehicle for Ontario Municipal Employees Retirement System (“OMERS”). Under the royalty purchase agreement, we sold
to OMERS a portion of the future royalty payments and the remaining anniversary milestones associated with our existing
license to Eli Lilly and Company (“Lilly”), relating to OLUMIANT® (baricitinib) for the treatment of alopecia areata (see
“—License Agreement with Eli Lilly and Company”). Under the terms of the royalty purchase agreement, we received an
upfront payment of $26.5 million. In exchange, OMERS acquired a portion of the royalty payable by Lilly to us for
worldwide net sales of OLUMIANT for the treatment of alopecia areata from April 1, 2024 through the remainder of the
royalty term under our license agreement with Lilly, and 100% of the remaining anniversary milestone payments payable
by Lilly to us under the license agreement. The royalty payments and milestones we sold to OMERS represent our entire
financial interest in the Lilly license agreement after taking into account our other contractual third-party obligations.
We recognized $1.9 million of non-cash royalty income during the year ended December 31, 2024.
License Agreement with Sun Pharmaceutical Industries, Inc.
In December 2023, we entered into an exclusive patent license agreement with Sun Pharmaceutical Industries,
Inc. (“Sun Pharma”). Under the license agreement, we granted Sun Pharma exclusive rights under certain patents that we
exclusively license from a third party. The patents relate to the use of deuruxolitinib, Sun Pharma’s JAK inhibitor, or other
isotopic forms of ruxolitinib, to treat alopecia areata or androgenetic alopecia. Under the license agreement, Sun Pharma
has paid us an upfront payment and certain regulatory payments, and has agreed to pay us other regulatory and commercial
milestone payments upon the achievement of specified milestones set forth in the agreement, and a mid single-digit tiered
royalty calculated as a percentage of Sun Pharma’s net sales. We have separate contractual obligations under which we
have agreed to pay to third parties a portion of the consideration we may receive under the license agreement.
We recognized $3.0 million and $15.0 million of licensing revenue during the years ended December 31, 2024
and 2023, respectively.

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License Agreement with Pediatrix Therapeutics, Inc.
In November 2022, we entered into a license agreement with Pediatrix Therapeutics, Inc. (“Pediatrix”) under
which we granted Pediatrix the exclusive rights to develop, manufacture and commercialize lepzacitinib in Greater China.
Pediatrix has paid us an upfront payment, and has agreed to pay us development, regulatory and commercial milestone
payments upon the achievement of specified milestones set forth in the agreement, and a tiered royalty ranging from a low-
to-high single digit percentage of net sales of lepzacitinib by Pediatrix in Greater China. A portion of the consideration
received from Pediatrix is payable to the former Confluence equity holders as described below under the caption “—
Agreement and Plan of Merger with Confluence.”
License Agreement with Eli Lilly and Company
In August 2022, we entered into a non-exclusive patent license agreement with Lilly. Under the license agreement,
we granted Lilly non-exclusive rights under certain patents and patent applications that we exclusively license from a third
party. The patents and patent applications relate to the use of baricitinib, Lilly’s JAK inhibitor, to treat alopecia areata.
Under the license agreement, Lilly has paid us an upfront payment and regulatory and certain commercial milestone
payments, and agreed to pay us anniversary payments and other commercial milestone payments upon the achievement of
specified milestones as set forth in the agreement, and a low single-digit royalty calculated as a percentage of Lilly’s net
sales of baricitinib for the treatment of alopecia areata. We have separate contractual obligations under which we have
agreed to pay to third parties an amount equal to any regulatory and commercial milestone payments we receive under the
Lilly license agreement, as well as a portion of the upfront consideration and a portion of the royalties we may receive
under the license agreement. In July 2024, we entered into a royalty purchase agreement with OMERS pursuant to which
we sold to OMERS a portion of our future royalty payments and the remaining anniversary milestones associated with the
license to Lilly (see “—Royalty Purchase Agreement with OCM IP Healthcare Portfolio LP” above).
We recognized $13.2 million and $12.7 million of licensing revenue during the years ended December 31, 2024
and 2023, respectively.
Asset Purchase Agreement with EPI Health, LLC
In October 2019, we sold RHOFADE (oxymetazoline hydrochloride) cream, 1% (“RHOFADE”) to EPI Health,
LLC (“EPI Health”) pursuant to an asset purchase agreement. In July 2023, EPI Health filed a voluntary petition for relief
under Chapter 11 of the United States Bankruptcy Code. Through the bankruptcy process, EPI Health and its parent
company, Novan, Inc., sold the RHOFADE assets to a third party, which excluded our asset purchase agreement with EPI
Health and the outstanding amounts due. The sale was approved by the bankruptcy court in September 2023. As a result of
the bankruptcy proceedings, all amounts that were due and outstanding by EPI Health have been fully reserved.
Agreement and Plan of Merger with Confluence
In 2017, we entered into an Agreement and Plan of Merger (the “Confluence Agreement”) with Confluence Life
Sciences, Inc. (now known as Aclaris Life Sciences, Inc.) (“Confluence”), Aclaris Life Sciences, Inc., our wholly-owned
subsidiary (“Merger Sub”), and Fortis Advisors LLC, as representative of the equity holders of Confluence.  Pursuant to
the terms of the Confluence Agreement, Merger Sub merged with and into Confluence, with Confluence surviving as our
wholly-owned subsidiary.
Under the Confluence Agreement, we have agreed to pay the former Confluence equity holders aggregate
remaining contingent consideration of up to $75.0 million based upon the achievement of specified regulatory and
commercial milestones set forth in the Confluence Agreement. In addition, we have agreed to pay the former Confluence
equity holders future royalty payments calculated as a low single-digit percentage of annual net sales, subject to specified
reductions, limitations and other adjustments, until the date that all of the patent rights for that product have expired, as
determined on a country-by-country and product-by-product basis or, in specified circumstances, ten years from the first
commercial sale of such product.  In addition to the payments described above, if we sell, license or transfer any of the
intellectual property acquired from Confluence pursuant to the Confluence Agreement to a third party, we will be obligated
to pay the former Confluence equity holders a portion of any consideration received from such sale, license or transfer in
specified circumstances.

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Discontinued Programs
We were previously developing zunsemetinib (ATI-450) as a potential treatment for various immuno-
inflammatory diseases, including hidradenitis suppurativa, psoriatic arthritis, and rheumatoid arthritis. Following the results
of the Phase 2 trials for these programs, we discontinued further development of our mitogen-activated protein kinase-
activated protein kinase 2 (“MK2”) inhibitor programs in immuno-inflammatory diseases in 2023.
We were also previously exploring the use of ATI-2231, our second MK2 inhibitor, as a potential treatment for
oncology diseases, but decided to pursue this with zunsemetinib due to its more advanced clinical development package.
Restructuring
In December 2023, our board of directors approved a reduction of our workforce by approximately 46%, which
was completed as of December 31, 2024. For the year ended December 31, 2024, we incurred severance expenses of $2.7
million and made cash severance payments of $5.6 million to impacted employees. In the year ended December 31, 2023,
we recorded a restructuring charge of $3.1 million, representing one-time termination benefits for employees with retention
periods less than the sixty-day minimum retention period.
Components of Our Results of Operations
Revenue
Contract Research
We earn revenue from the provision of laboratory services. Contract research revenue is generally evidenced by
contracts with clients which are on an agreed upon fixed-price, fee-for-service basis and are generally billed on a monthly
basis in arrears for services rendered.
Licensing
Licensing revenue primarily consists of upfront consideration, royalties and milestone payments earned pursuant
to license and acquisition agreements with third parties, as described above.
Cost and Expenses
Cost of Revenue
Cost of revenue consists of the costs incurred in connection with the provision of contract research services. Cost
of revenue primarily includes:
●
employee-related expenses, which include salaries, benefits and stock-based compensation;
●
outsourced professional scientific services;
●
depreciation of laboratory equipment;
●
facility-related costs; and
●
laboratory materials and supplies used to support the services provided.
Research and Development
Research and development expenses consist of expenses incurred in connection with the discovery and
development of our product candidates. These expenses primarily include:
●
expenses incurred under agreements with contract research organizations (“CROs”), as well as clinical trial
sites and consultants that conduct our clinical trials and preclinical studies, and investigator-initiated trials;
●
manufacturing scale-up expenses and the cost of acquiring and manufacturing active pharmaceutical
ingredients and preclinical and clinical trial materials, including domestic technology transfer expenses;
●
quality assurance and quality control costs;

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●
outsourced professional scientific development services;
●
medical affairs expenses related to our product candidates;
●
employee-related expenses, which include salaries, benefits and stock-based compensation;
●
expenses relating to regulatory activities, including filing fees paid to regulatory agencies; and
●
laboratory materials and supplies used to support our research activities.
Research and development activities are central to our business model. Product candidates in later stages of
clinical development generally have higher development costs than those in earlier stages of clinical development,
primarily due to the increased size and duration of later-stage clinical trials. We expect to continue to incur research and
development expenses in the near term as we continue the development of our product candidates and pursue our discovery
programs.   We expense research and development costs as incurred. Our direct research and development expenses
primarily consist of external costs including fees paid to CROs, consultants, clinical trial sites, regulatory agencies and
third parties that manufacture our preclinical and clinical trial materials and are tracked on a program-by-program basis.
We do not allocate personnel costs or other indirect expenses to specific research and development programs.
The successful development of our product candidates is highly uncertain. We cannot reasonably estimate or
know the nature, timing and costs of the efforts that will be necessary to complete the remainder of the development of, or
when, if ever, material net cash inflows may commence from any of our product candidates. This uncertainty is due to the
numerous risks and uncertainties associated with the duration and cost of discovery, as well as clinical trials, which vary
significantly over the life of a project as a result of many factors, including:
●
the number of clinical sites included in the trials;
●
the length of time required to enroll suitable subjects;
●
the number of subjects that ultimately participate in the trials;
●
the number of doses subjects receive;
●
the duration of subject follow-up; and
●
the results of our clinical trials.
Our expenditures are subject to additional uncertainties, including the preparation of regulatory filings for our
product candidates. We may obtain unexpected results from our clinical trials or other development activities. We may
elect to discontinue, delay or modify the development, including clinical trials, of some product candidates or focus on
others. A change in the outcome of any of these variables with respect to the development of a product candidate could
mean a significant change in the costs and timing associated with the development of that product candidate.  For example,
if the FDA or other regulatory authorities were to require us to conduct clinical trials beyond those that we currently
anticipate, or if we experience significant delays in enrollment in any of our clinical trials, we could be required to expend
significant additional financial resources and time on the completion of clinical development.
General and Administrative
General and administrative expenses consist principally of salaries and related costs, including stock-based
compensation, for personnel in executive, administrative, finance and legal functions. General and administrative expenses
also include facility-related costs, patent filing and prosecution costs, professional fees for legal, auditing and tax services,
investor relations costs, business development costs, insurance costs and travel expenses.
Licensing
Licensing expenses consist of third-party contractual obligations incurred under license and acquisition
agreements with third parties, as described above.
Revaluation of Contingent Consideration
Revaluation of contingent consideration consists of changes in the fair value of our contingent consideration
liability between reporting dates.

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In-process Research and Development
In-process research and development (“IPR&D”) consists of expenses related to in-licensed assets with no future
alternative use and impairment charges recorded for IPR&D intangible assets.
Other Income
Interest Income
Interest income primarily consists of interest earned on our cash, cash equivalents and marketable securities.
Non-cash Royalty Income
In July 2024, we entered into the royalty purchase agreement with OMERS pursuant to which we sold a portion of
our royalties due to us under the license agreement with Lilly and received upfront proceeds of $26.5 million.
We evaluated the royalty purchase agreement under Accounting Standards Codification (“ASC”) 470 – Debt and
concluded that the upfront payment should be accounted for as deferred income because the criteria for debt classification
were not met. We apply the “units-of-revenue” method of recognizing income in the consolidated statements of operations
and comprehensive loss and such amounts are included in non-cash royalty income.
Critical Accounting Estimates
This discussion and analysis of our financial condition and results of operations is based on our consolidated
financial statements which have been prepared in accordance with generally accepted accounting principles in the United
States. The preparation of our consolidated financial statements and related disclosures requires us to make estimates and
judgments that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the
date of the financial statements, and the reported amounts of expenses during the reported period. We base our estimates on
historical experience, known trends and events and various other factors that we believe to be reasonable under the
circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities
that are not readily apparent from other sources. We evaluate our estimates and judgments on an ongoing basis. Our actual
results may differ from these estimates under different assumptions or conditions.
While our significant accounting policies are described in more detail in the notes to our consolidated financial
statements appearing elsewhere in this Annual Report, we believe that the following accounting policies are those most
critical to the judgments and estimates used in the preparation of our consolidated financial statements.
Contingent Consideration
We record a contingent consideration liability related to future potential payments resulting from the acquisition of
Confluence based upon significant unobservable inputs including the achievement of regulatory and commercial
milestones, as well as estimated future sales levels and the discount rates applied to calculate the present value of the
potential payments. Significant judgement is involved in determining the appropriateness of these assumptions. These
assumptions are considered Level 3 inputs. Revaluation of our contingent consideration liability can result from changes to
one or more of these assumptions. These assumptions are highly dependent on the outcome and timing of the development
of certain of our product candidates. We evaluate the fair value estimate of our contingent consideration liability on a
quarterly basis with changes, if any, recorded as income or expense in our consolidated statement of operations. Any such
changes could have a material impact on our financial results.
The fair value of contingent consideration is estimated using a probability-weighted expected payment model for
regulatory milestone payments and a Monte Carlo simulation model for commercial milestone and royalty payments and
then applying a risk-adjusted discount rate to calculate the present value of the potential payments. Significant assumptions
used in our estimates include the probability of achieving regulatory milestones and commencing commercialization,
which are based on an asset’s current stage of development and a review of existing clinical data. Probability of success
assumptions ranged between 17% and 40% at December 31, 2024. Additionally, estimated future sales levels and the risk-
adjusted discount rate applied to the potential payments are also significant assumptions used in calculating the fair value.
The discount rate ranged between 7.4% and 8.7% depending on the year of each potential payment.

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During the year ended December 31, 2024, we adjusted estimated sales and the probability of success for certain
product candidates. These changes, as well as the passage of time, partially offset by higher discount rates resulting from
higher risk-free rates and changes in credit spreads, resulted in an overall increase of $2.5 million during the year ended
December 31, 2024.
Stock-Based Compensation
We measure the compensation expense of stock-based awards granted to employees and directors using the grant
date fair value of the award. We have issued stock options and restricted stock unit (“RSU”) awards with service-based
vesting conditions, as well as with performance-based vesting conditions. We have not issued awards that include market-
based conditions. For service-based awards, we recognize stock-based compensation expense on a straight-line basis over
the requisite service period. For performance-based awards, we recognize stock-based compensation expense on a straight-
line basis over the requisite service period beginning in the period that it becomes probable the performance conditions will
occur. At each balance sheet date, we evaluate whether any performance conditions related to a performance-based award
have changed. The effect of any change in performance conditions would be recognized as a cumulative catch-up
adjustment in the period such change occurs, and any remaining unrecognized compensation expense would be recognized
on a straight-line basis over the remaining requisite service period. The impact of forfeitures is recognized in the period in
which they occur.
We measure the compensation expense of stock-based awards granted to consultants using the grant date fair
value of the award. We recognize compensation expense over the period during which services are rendered by the
consultant.
We estimate the fair value of each stock option grant using the Black-Scholes option-pricing model.  We estimate
expected volatility based on our stock price's historical volatility, as we have determined that we have adequate historical
data regarding the volatility of our own publicly-traded stock price. The expected term of our stock options has been
determined using the “simplified” method for awards that qualify as “plain vanilla” options. The expected term of stock
options we granted to non-employees is equal to the contractual term of the option award. The risk-free interest rate is
determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods
approximately equal to the expected term of the award.  We use an expected dividend yield of zero because we have not
paid cash dividends to date and have no intention of paying cash dividends in the future.
The fair value of each RSU is measured using the closing price of our common stock on the date of grant.

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Results of Operations
Comparison of Years Ended December 31, 2024 and 2023
Year Ended December 31, 
 
(In thousands)
    
2024
    
2023
    
Change
 
Revenues:
     Contract research
$
 2,541
$
 3,035
$
 (494)
Licensing
 16,179
 28,214
 (12,035)
Total revenue
 18,720
 31,249
 (12,529)
Costs and expenses:
Cost of revenue
 2,792
 3,423
 (631)
Research and development
 
 33,586
 
 98,384
   (64,798)
General and administrative
 
 22,203
 
 32,412
   (10,209)
Licensing
 12,666
 14,658
 (1,992)
Revaluation of contingent consideration
 2,500
 (26,900)
 29,400
In-process research and development
 86,905
 6,629
 80,276
Total costs and expenses
   160,652
   128,606
 
 32,046
Loss from operations
  (141,932)
   (97,357)
   (44,575)
Other income:
Interest income
 
 7,953
 
 8,509
 
 (556)
Non-cash royalty income
 1,914
 —
 1,914
Total other income
 9,867
 8,509
 1,358
Loss before income taxes
 (132,065)
 (88,848)
 (43,217)
Income tax benefit
 —
 (367)
 367
Net loss
$  (132,065)
$  (88,481)
$
 (43,584)
Revenue
Contract Research
Contract research revenue was $2.5 million and $3.0 million for the years ended December 31, 2024 and 2023,
respectively, and was comprised of fees earned from the provision of laboratory services to our clients. The decrease was
driven by lower overall hours billed, which was offset by a higher average billing rate.
Licensing
Licensing revenue was $16.2 million and $28.2 million for the years ended December 31, 2024 and 2023,
respectively. The decrease was primarily driven by the upfront payment received under the Sun Pharma agreement during
the year ended December 31, 2023, partially offset by the achievement of higher milestones under license agreements
during the year ended December 31, 2024.
Cost and Expenses
Cost of Revenue
Cost of revenue was $2.8 million and $3.4 million for the years ended December 31, 2024 and 2023, respectively,
and in each case related to providing laboratory services to our clients. Changes in cost of revenue generally correlate to
changes in contract research revenue.  Cost of revenue decreased during the year ended December 31, 2024 due to lower
variable costs resulting from a decrease in hours billed, which was offset by an increase in termination benefits as a result
of our restructuring that was announced in December 2023.

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Research and Development
The following table summarizes our research and development expenses by product candidate or, for unallocated
expenses, by type:
Year Ended
December 31, 
(In thousands)
2024
    
2023
Change
Bosakitug
$
 299
$
 —
$
 299
ATI-2138
 4,209
 12,143
 (7,934)
ATI-052
 1,895
 —
 1,895
Lepzacitinib
 1,300
 12,129
 (10,829)
Zunsemetinib
    
 4,496     
 36,461   
 (31,965)
Discovery
 
 5,775
 
 6,881
 
 (1,106)
Other research and development
 1,031
 4,992
 (3,961)
Personnel
 11,446
 18,977
 (7,531)
Stock-based compensation
 3,135
 6,801
 (3,666)
Total research and development expenses
$
 33,586
$
 98,384
$
 (64,798)
ATI-2138
The decrease in expenses for ATI-2138 during the year ended December 31, 2024 compared to the year ended
December 31, 2023 was primarily due to a decrease in clinical development expenses associated with a Phase 1 MAD trial
which was completed in September 2023, as well as a decrease in preclinical development activities. This decrease was
partially offset by clinical development expenses associated with a Phase 2a trial that was initiated in August 2024.
ATI-052
Research and development expenses related to ATI-052 for the year ended December 31, 2024 primarily consisted
of product candidate manufacturing costs and preclinical development activities. Because we in-licensed ATI-052 in 2024,
there were no related expenses for the year ended December 31, 2023.
Lepzacitinib
The decrease in expenses for lepzacitinib during the year ended December 31, 2024 compared to the year ended
December 31, 2023 was primarily due to lower costs associated with preclinical development activities and costs
associated with a Phase 2b clinical trial in subjects with atopic dermatitis, which was initiated in May 2022 and was
completed in January 2024.
Zunsemetinib
The decrease in expenses for zunsemetinib during the year ended December 31, 2024 compared to the year ended
December 31, 2023 was primarily due to a decrease in costs associated with Phase 2 clinical development activities which
were completed in 2023 as well as a decrease in product manufacturing costs.
Personnel and stock-based compensation
The decrease in personnel and stock-based compensation expenses during the year ended December 31, 2024
compared to the year ended December 31, 2023 was primarily due to lower headcount, lower termination benefits and
higher forfeiture credits as a result of our restructuring that was announced in December 2023.

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General and Administrative
The following table summarizes our general and administrative expenses:
Year Ended
December 31, 
(In thousands)
2024
    
2023
Change
Personnel
    $
 6,786     $
 8,016    $
 (1,230)
Professional and legal fees
 4,508
 5,534
 (1,026)
Facility and support services
 
 2,234
 
 3,023
 
 (789)
Other general and administrative
 1,892
 2,240
 (348)
Stock-based compensation
 6,783
 12,285
 (5,502)
Bad debt
 —
 1,314
 (1,314)
Total general and administrative expenses
$
 22,203
$
 32,412
$  (10,209)
Personnel and stock-based compensation
The aggregate decrease in personnel and stock-based compensation expenses during the year ended December 31,
2024 compared to the year ended December 31, 2023 was primarily due to lower headcount and higher forfeiture credits.
Professional and legal fees
 The decrease in professional and legal fees, including accounting, investor relations and corporate
communication costs, during the year ended December 31, 2024 compared to the year ended December 31, 2023 was
primarily driven by a decrease in accounting related expenses, which were partially offset by an increase in business
development expenses.
Facility and support services
The decrease in facility and support services, including general office expenses, information technology costs and
other expenses, during the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily
driven by a decrease in rent expense and information technology expenses.
Bad debt
Bad debt expenses were related to our determination that amounts due to us as of December 31, 2023 pursuant to
the asset purchase agreement with EPI Health are uncertain as a result of the bankruptcy filing by EPI Health in July 2023.
There was no bad debt expense during the year ended December 31, 2024.
Licensing
The decrease in licensing expenses during the year ended December 31, 2024 compared to the year ended
December 31, 2023 was primarily driven by the upfront payment received under the Sun Pharma agreement during the
year ended December 31, 2023, a portion of which was payable to third parties, partially offset by the achievement of
higher milestones under license agreements during the year ended December 31, 2024.
Revaluation of Contingent Consideration
The revaluation of contingent consideration loss during the year ended December 31, 2024 was primarily due to
changes in estimated sales levels and changes to the probability of success for certain product candidates, compared to the
revaluation of contingent consideration gain during the year ended December 31, 2023 which was primarily due to the
removal of estimated sales levels of zunsemetinib following our decision to discontinue further development of our MK2
inhibitor programs in immuno-inflammatory diseases.

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77
In-process Research and Development
In-process research and development expenses recorded during the year December 31, 2024 included the fair
value of the consideration expensed in connection with the in-license of bosakitug and ATI-052, as well as transaction costs
incurred as part of the transaction. During the quarter ended December 31, 2023, we performed an impairment analysis on
the IPR&D intangible asset acquired from Confluence due to our decision to discontinue further development of the
product candidate for immuno-inflammatory diseases. Our impairment analysis resulted in a fair value of the IPR&D
intangible asset which was less than the carrying value and as a result, we recorded an impairment charge for the full
balance of the IPR&D intangible asset during the year ended December 31, 2023.  
Other Income
Interest Income
Interest income decreased during the year ended December 31, 2024 compared to the year ended December 31,
2023 primarily due to lower interest income on investment portfolio balances.
Non-cash Royalty Income
Non-cash royalty income includes income related to the proceeds from the sale of future royalties to OMERS,
recognized under the “units-of-revenue” method.
Liquidity and Capital Resources
Overview
Since our inception, we have incurred net losses and negative cash flows from our operations. Prior to our
acquisition of Confluence, we did not generate any revenue. We have financed our operations over the last several years
primarily through sales of our equity securities and incurring indebtedness in the form of loans from commercial lenders.
We may engage in additional debt and equity financing transactions in order to raise funds.  We may receive royalties and
milestone payments from third-party licensing and acquisition agreements. In addition, to the extent we are able to
consummate transactions with potential third-party partners to further develop, obtain marketing approval for and/or
commercialize our product candidates, we may receive upfront payments, milestone payments or royalties from such
arrangements that would increase our liquidity.
As of December 31, 2024, we had cash, cash equivalents and marketable securities of $203.9 million. Cash in
excess of immediate requirements is invested in accordance with our investment policy, primarily with a view towards
liquidity and capital preservation.  
We currently have no ongoing material financing commitments, such as lines of credit or guarantees, that are
expected to affect our liquidity, other than our contingent obligations under the Confluence Agreement, Biosion Agreement
and CTTQ Agreement, which are summarized above under “Overview—Acquisition and License Agreements,” and our
lease obligations.
Equity Financing
Private Placement
In November 2024, we closed a private placement in which we sold 35.6 million shares of our common stock for
aggregate gross proceeds of $80.0 million. We paid placement agent and other fees of $5.1 million in connection with the
private placement.
At-the-Market Facility
In April 2023, we sold 3.4 million shares of our common stock for aggregate gross proceeds of $27.5 million,
pursuant to a sales agreement with Leerink Partners LLC (formerly SVB Securities LLC) and Cantor Fitzgerald & Co., as
sales agents, dated February 23, 2023. We paid selling commissions of $0.8 million in connection with the sale.

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78
Cash Flows
Cash and cash equivalents were $24.6 million as of December 31, 2024 compared to $39.9 million as of
December 31, 2023. We also had $179.3 million in short- and long-term marketable securities as of December 31, 2024
compared to $142.0 million as of December 31, 2023.
The sources and uses of cash that contributed to the change in cash and cash equivalents were:
Year Ended
December 31, 
(In thousands)
    
2024
    
2023
Cash and cash equivalents beginning balance
$
 39,878
$
 45,277
Net cash used in operating activities
 
 (20,075)
 
 (78,325)
Net cash (used in) provided by investing activities
 
 (69,769)
 
 46,220
Net cash provided by financing activities
 74,536
 26,706
Cash and cash equivalents ending balance
$
 24,570
$
 39,878
Operating Activities
Cash flow related to operating activities was the result of:
Year Ended
December 31, 
(In thousands)
    
2024
    
2023
Net loss
$
 (132,065)
$
 (88,481)
Non-cash adjustments to reconcile net loss to net cash used in operating activities
 
 101,068
 
 767
Change in accounts receivable
 (20)
 186
Change in prepaid expenses and other assets
 
 (4,855)
 
 (1,315)
Change in accounts payable and accrued expenses
 (8,130)
 10,518
Change in deferred income
 23,927
 —
Net cash used in operating activities
$
 (20,075)
$
 (78,325)
Net cash used in operating activities decreased for the year ended December 31, 2024 compared to the year ended
December 31, 2023 primarily as a result of lower net losses after adjusting for non-cash items and proceeds from the
royalty sale to OMERS. The change was partially offset by an increase in cash used for accounts payable and accrued
expenses, which was due to the timing of payments to vendors and severance payments as a result of our restructuring
announced in December 2023.
The increase in non-cash adjustments to reconcile net loss to net cash used in operating activities was mainly the
result of in-process research and development expenses recorded in connection with the in-license of bosakitug and ATI-
052.
Investing Activities
Cash flow related to investing activities was the result of:
Year Ended
December 31, 
(In thousands)
    
2024
    
2023
Purchases of property and equipment, net
$
 (121)
$
 (1,309)
Purchases of marketable securities
 
 (119,982)
 
 (135,675)
Proceeds from sales and maturities of marketable securities
 86,144
 183,204
Acquisition of in-licensed assets, including transaction costs
 (35,810)
 —
Net cash (used in) provided by investing activities
$
 (69,769)
$
 46,220
Net cash used in investing activities for the year ended December 31, 2024 was $69.8 million compared to net
cash provided by investing activities during the year ended December 31, 2023 of $46.2 million. The change was primarily

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due to the consideration paid for the acquisition of in-licensed assets in connection with the Biosion Agreement and CTTQ
Agreement and lower sales and maturities of marketable securities, partially offset by a reduction in purchases of
marketable securities.
Financing Activities
Cash flow related to financing activities was the result of:
Year Ended
December 31, 
(In thousands)
    
2024
    
2023
Proceeds from issuance of common stock under securities purchase agreement, net of
issuance costs
$
 74,913
$
 —
Proceeds from issuance of common stock under the at-the-market sales agreement, net of
issuance costs
 —
 26,714
Payments of employee withholding taxes related to restricted stock unit award vesting and
exercise of employee stock options
 (409)
 (102)
Proceeds from exercise of employee stock options and the issuance of stock
 
 32
 
 94
Net cash provided by financing activities
$
 74,536
$
 26,706
The increase in net cash provided by financing activities for the year ended December 31, 2024 compared to
December 31, 2023 was primarily due to proceeds from our private placement in November 2024, offset by proceeds from
sales under our at-the-market sales agreement in 2023.
Funding Requirements
We anticipate we will incur net losses in the near term as we continue the development of our product candidates
and continue to discover and develop additional product candidates. We may not be able to generate revenue from these
programs if, among other things, our clinical trials are not successful, the FDA does not approve our product candidates
currently in clinical trials when we expect, or at all, or we are not able to identify and consummate transactions with third-
party partners to further develop, obtain marketing approval for and/or commercialize our product candidates.  
Our primary uses of capital are, and we expect will continue to be, compensation and related expenses, research
and development expenses, laboratory and related supplies, legal and other regulatory expenses, and administrative and
overhead costs. Our future funding requirements will be heavily determined by the resources needed to support the
development of our product candidates, without taking into account any potential business development activities.
As a publicly traded company, we incur and will continue to incur significant legal, accounting and other similar
expenses. In addition, the Sarbanes-Oxley Act of 2002, as well as rules adopted by the SEC and the Nasdaq Stock Market
LLC, requires public companies to implement specified corporate governance practices that could increase our compliance
costs.
We believe our existing cash, cash equivalents and marketable securities are sufficient to fund our operating and
capital expenditure requirements for a period greater than 12 months from the date of issuance of our consolidated financial
statements that appear in Item 8 of this Annual Report based on our current operating assumptions. We will require
additional capital to develop our product candidates and to support our discovery efforts. Additional funds may not be
available on a timely basis, on commercially acceptable terms, or at all, and such funds, if raised, may not be sufficient to
enable us to continue to implement our long-term business strategy. Our ability to raise additional capital may be adversely
impacted by potential worsening global economic conditions caused by a variety of factors including geopolitical tensions
and inflationary pressures. If we are unable to raise sufficient additional capital or generate revenue from transactions with
potential third-party partners for the development and/or commercialization of our product candidates, we may need to
substantially curtail our planned operations.  
We may raise additional capital through the sale of equity or debt securities. In such an event, our stockholders’
ownership will be diluted, and the terms of these securities may include liquidation or other preferences that adversely
affect the rights of a holder of our common stock.

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Because of the numerous risks and uncertainties associated with research and development of pharmaceutical
product candidates, we are unable to estimate the exact amount of our working capital requirements. Our funding
requirements in the near term will depend on many factors, including:
●
the number and development requirements of the product candidates that we may pursue;
●
the scope, progress, results and costs of preclinical development, laboratory testing and conducting preclinical
and clinical trials for our product candidates;
●
the costs, timing and outcome of regulatory review of our product candidates;
●
the extent to which we in-license or acquire additional product candidates and technologies;
●
the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our
intellectual property rights and defending any intellectual property-related claims;
●
our ability to identify and consummate transactions with third-party partners to further develop, obtain marketing
approval for and/or commercialize our product candidates; and
●
our ability to earn revenue as a result of licenses to, or partnerships or other arrangements with, third parties.
See “Risk Factors” for additional risks associated with our substantial capital requirements.
Leases
We occupy space for our headquarters in Wayne, Pennsylvania under a lease agreement which has a term through
February 2029. We also occupy office and laboratory space in St. Louis, Missouri under a sublease agreement which has a
term through May 2029.
Our aggregate remaining lease payment obligation for these two spaces was $3.2 million as of December 31,
2024.
Agreement and Plan of Merger with Confluence
Under the Confluence Agreement, we agreed to pay the former Confluence equity holders aggregate remaining
contingent consideration of up to $75.0 million based upon the achievement of specified regulatory and commercial
milestones set forth in the Confluence Agreement. In addition, we have agreed to pay the former Confluence equity holders
future royalty payments calculated as a low single-digit percentage of annual net sales, subject to specified reductions,
limitations and other adjustments, until the date that all of the patent rights for that product have expired, as determined on
a country-by-country and product-by-product basis or, in specified circumstances, ten years from the first commercial sale
of such product.  In addition to the payments described above, if we sell, license or transfer any of the intellectual property
acquired from Confluence pursuant to the Confluence Agreement to a third party, we will be obligated to pay the former
Confluence equity holders a portion of any consideration received from such sale, license or transfer in specified
circumstances.
Exclusive License Agreement with Biosion; Collaboration Agreement with Biosion and CTTQ
Under the Biosion and CTTQ Agreements, we agreed to pay, in the aggregate, up to $920 million upon the
achievement of specified regulatory and sales milestones. In addition, we have agreed to pay future royalty payments
calculated as a low-to-mid single digit percentage of annual net sales, subject to specified reductions, as set forth in the
Biosion Agreement.  In addition to the payments described above, we have also agreed to pay a portion of any sublicense
consideration received from the grant of any sublicense or similar rights under any of the rights or licenses granted to us
under the Biosion Agreement.  
R&D Obligations
We enter into contracts in the normal course of business with CROs, contract manufacturing organizations and
other service providers for clinical trials, preclinical studies and testing, manufacturing and other services and products for
operating purposes. These contracts generally provide for termination upon notice, and therefore we believe that our non-
cancelable obligations under these agreements are not material.

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Segment Information
We have two reportable segments, therapeutics and contract research. The therapeutics segment is focused on
identifying and developing innovative therapies to address significant unmet needs for immuno-inflammatory diseases. The
contract research segment earns revenue from the provision of laboratory services.
Recently Issued Accounting Pronouncements
In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update
(“ASU”) No. 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures
(Subtopic 220-40): Disaggregation of Income Statement Expenses.” This standard requires disclosure of additional
information about specific expense categories in the notes to financial statements on an annual and interim basis. This ASU
becomes effective for annual periods beginning after December 15, 2026 and interim reporting periods within annual
reporting periods beginning after December 15, 2027. We are currently assessing the impact of this ASU.
In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax
Disclosures.” This standard enhances disclosures related to income taxes, including the rate reconciliation and information
on income taxes paid. This ASU becomes effective for annual periods beginning after December 15, 2024. We are
currently assessing the impact of this ASU.
In November 2023, the FASB issued ASU No. 2023-07, “Segment Reporting (Topic 280): Improvements to
Reportable Segment Disclosures.” This standard requires disclosure of significant segment expenses and other segment
items by reportable segment. We adopted ASU No. 2023-07 effective December 31, 2024, on a retrospective basis, the
impact of which is limited to additional segment expense disclosures in the notes to our consolidated financial statements.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide
the information under this item.

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Item 8. Financial Statements and Supplementary Data
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm (PCAOB ID 238)
83
Consolidated Balance Sheets as of December 31, 2024 and 2023
85
Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2024 and 2023
86
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2024 and 2023
87
Consolidated Statements of Cash Flows for the years ended December 31, 2024 and 2023
88
Notes to Consolidated Financial Statements
89

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83
Report of Independent Registered Public Accounting Firm
 
To the Board of Directors and Stockholders of Aclaris Therapeutics, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Aclaris Therapeutics, Inc. and its subsidiaries (the
“Company”) as of December 31, 2024 and 2023, and the related consolidated statements of operations and comprehensive
loss, of stockholders’ equity and of cash flows for the years then ended, including the related notes (collectively referred to
as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all
material respects, the financial position of the Company as of December  31,  2024 and 2023, and the results of its
operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the
United States of America.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to
express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting
firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be
independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those
standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,
nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are
required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such
opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included
examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our
audits also included evaluating the accounting principles used and significant estimates made by management, as well as
evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable
basis for our opinion.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial
statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts
or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging,
subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the
consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below,
providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Fair Value of the Contingent Consideration Liability
As described in Notes 2 and 3 to the consolidated financial statements, the Company’s contingent consideration balance
was $8.7 million as of December 31, 2024. The Company records a contingent consideration liability related to future
potential payments resulting from the acquisition of Confluence based upon significant unobservable inputs including the
achievement of regulatory and commercial milestones, as well as estimated future sales levels and the discount rates
applied to calculate the present value of the potential payments. Management evaluates fair value estimates of the
contingent consideration liability on a quarterly basis using a probability-weighted expected payment model for regulatory
milestone payments and a Monte Carlo simulation model for commercial milestone and royalty payments and then
applying a risk-adjusted discount rate to calculate the present value of the potential payment. Changes in the fair value of
the contingent consideration are recorded as income or expense in the Company’s consolidated statement of operations and
comprehensive loss. Significant assumptions used in management’s estimates include the probability of achieving

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regulatory milestones and commencing commercialization, which are based upon an asset’s current stage of development
and review of existing clinical data.
The principal considerations for our determination that performing procedures relating to the fair value of the contingent
consideration liability is a critical audit matter are (i) the significant judgment by management when developing the fair
value estimate, which in turn led to (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures
and evaluating management’s significant assumptions related to the probability of achieving regulatory milestones and
commencing commercialization. In addition, the audit effort involved the use of professionals with specialized skill and
knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our
overall opinion on the consolidated financial statements. These procedures included, among others, (i) testing
management’s process for developing the fair value of the contingent consideration liability, (ii) evaluating the
appropriateness of the probability weighted expected payment and Monte Carlo simulation valuation models, (iii) testing
the completeness and accuracy of the underlying data used in the models, and (iv) evaluating the reasonableness of the
significant assumptions used by management related to the probability of achieving regulatory milestones and commencing
commercialization. Evaluating management’s assumptions related to the probability of achieving regulatory milestones and
commencing commercialization involved evaluating whether the assumptions were reasonable considering the agreements
associated with the transaction as well as the consistency with industry information, the stage of product development and
whether the assumptions were consistent with evidence obtained in other areas of the audit. Professionals with specialized
skill and knowledge were used to assist in the evaluation of the Company’s probability-weighted expected payment and
Monte Carlo simulation valuation models.
 
 
/s/PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
February 27, 2025
We have served as the Company’s auditor since 2015.

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85
ACLARIS THERAPEUTICS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
     December 31, 
December 31, 
    
2024
    
2023
Assets
Current assets:
Cash and cash equivalents
$
24,570
$
39,878
Short-term marketable securities
 
89,024
 
79,228
Accounts receivable, net
318
298
Prepaid expenses and other current assets
 
12,039
 
9,452
Total current assets
 
125,951
 
128,856
Marketable securities
 
90,302
 
62,771
Property and equipment, net
 
1,008
 
1,620
Other assets
 
3,066
 
4,158
Total assets
$
220,327
$
197,405
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
$
4,690
$
8,878
Accrued expenses
 
20,333
 
19,446
Deferred income
3,890
—
Other current liabilities
2,683
2,628
Total current liabilities
 
31,596
 
30,952
Other liabilities
4,439
 
3,074
Deferred income, net of current portion
20,038
—
Contingent consideration
8,700
6,200
Total liabilities
 
64,773
 
40,226
Stockholders’ Equity:
Preferred stock, $0.00001 par value; 10,000,000 shares authorized and no shares issued
or outstanding at December 31, 2024 and December 31, 2023
—
—
Common stock, $0.00001 par value; 200,000,000 shares authorized at December 31,
2024 and December 31, 2023; 107,850,124 and 70,894,889 shares issued and
outstanding at December 31, 2024 and December 31, 2023, respectively
 
1
 
1
Additional paid‑in capital
  1,058,317
 
928,080
Accumulated other comprehensive income (loss)
 
97
 
(106)
Accumulated deficit
 
(902,861)
 
(770,796)
Total stockholders’ equity
 
155,554
 
157,179
Total liabilities and stockholders’ equity
$
220,327
$
197,405
The accompanying notes are an integral part of these consolidated financial statements.

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86
ACLARIS THERAPEUTICS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(In thousands, except share and per share data)
Year Ended
December 31, 
    
2024
    
2023
Revenues:
Contract research
$
2,541
$
3,035
Licensing
16,179
28,214
Total revenue
18,720
31,249
Costs and expenses:
Cost of revenue
2,792
3,423
Research and development
 
 
33,586
 
98,384
General and administrative
 
 
22,203
 
32,412
Licensing
12,666
14,658
Revaluation of contingent consideration
2,500
(26,900)
In-process research and development
86,905
6,629
Total costs and expenses
 
 
160,652
 
128,606
Loss from operations
 
 
(141,932)
 
(97,357)
Other income:
Interest income
 
 
7,953
 
8,509
Non-cash royalty income
1,914
—
Total other income
9,867
8,509
Loss before income taxes
(132,065)
(88,848)
Income tax benefit
—
(367)
Net loss
$
(132,065)
$
(88,481)
Net loss per share, basic and diluted
$
(1.71)
$
(1.27)
Weighted average common shares outstanding, basic and diluted
 
77,296,665
 
69,808,855
Other comprehensive income:
Unrealized gain on marketable securities, net of tax of $0
$
203
$
791
Total other comprehensive income
 
203
 
791
Comprehensive loss
$
(131,862)
$
(87,690)
The accompanying notes are an integral part of these consolidated financial statements.

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87
ACLARIS THERAPEUTICS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands, except share data)
Accumulated
 
Common Stock
Additional
Other
Total
 
Par
Paid‑in
Comprehensive Accumulated Stockholders’ 
  Shares 
  Value  
Capital
   Income (Loss)   
Deficit
  
Equity
 
Balance at December 31, 2022
66,688,647
$
1
$
880,832
$
(897) $
(682,315) $
197,621
Issuance of common stock in connection with exercise of stock
options and vesting of restricted stock units
806,242
—
(8)
—
—
(8)
Issuance of common stock under at-the-market sales
agreement, net of offering costs of $826
3,400,000
—
26,714
—
—
26,714
Unrealized gain on marketable securities
—
—
—
791
—
791
Stock-based compensation expense
—
—
20,542
—
—
20,542
Net loss  
—
—
—
—
(88,481)
(88,481)
Balance at December 31, 2023
70,894,889
$
1
$
928,080
$
(106) $
(770,796) $
157,179
Issuance of common stock in connection with exercise of stock
options and vesting of restricted stock units
1,399,680
—
(377)
—
—
(377)
Issuance of common stock under securities purchase
agreement, net of offering costs of $5,087
35,555,555
—
74,913
—
—
74,913
Issuance of common stock purchase warrants
—
—
44,845
—
—
44,845
Unrealized gain on marketable securities
—
—
—
203
—
203
Stock-based compensation expense
—
—
10,856
—
—
10,856
Net loss  
—
—
—
—
(132,065)
(132,065)
Balance at December 31, 2024
107,850,124
$
1
$ 1,058,317
$
97
$
(902,861) $
155,554
The accompanying notes are an integral part of these consolidated financial statements.

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88
ACLARIS THERAPEUTICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Year Ended
December 31, 
    
2024
    
2023
Cash flows from operating activities:
    
    
    
    
Net loss
$ (132,065)
$
(88,481)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization
 
807
 
863
Stock-based compensation expense
 
10,856
 
20,542
Revaluation of contingent consideration
2,500
(26,900)
In-process research and development expense
86,905
6,629
Deferred taxes
—
(367)
Changes in operating assets and liabilities:
Accounts receivable
(20)
186
Prepaid expenses and other assets
 
(4,855)
 
(1,315)
Accounts payable
 
(4,188)
 
(1,473)
Accrued expenses and other liabilities
 
(3,942)
 
11,991
Deferred income
23,927
—
Net cash used in operating activities
 
(20,075)
 
(78,325)
Cash flows from investing activities:
Purchases of property and equipment, net
 
(121)
 
(1,309)
Purchases of marketable securities
  (119,982)
  (135,675)
Proceeds from sales and maturities of marketable securities
 
86,144
 
183,204
Acquisition of in-licensed assets, including transaction costs
(35,810)
—
Net cash (used in) provided by investing activities
 
(69,769)
 
46,220
Cash flows from financing activities:
Proceeds from issuance of common stock under securities purchase agreement, net of
issuance costs
74,913
—
Proceeds from issuance of common stock under the at-the-market sales agreement, net of
issuance costs
—
26,714
Payments of employee withholding taxes related to restricted stock unit award vesting and
exercise of employee stock options
(409)
(102)
Proceeds from exercise of employee stock options and the issuance of stock
32
94
Net cash provided by financing activities
 
74,536
 
26,706
Net decrease in cash and cash equivalents
 
(15,308)
 
(5,399)
Cash and cash equivalents at beginning of period
 
39,878
 
45,277
Cash and cash equivalents at end of period
$
24,570
$
39,878
Supplemental disclosure of non-cash investing and financing activities:
Fair value of warrants issued in connection with in-license agreement
$
44,845
$
—
Deferred transaction consideration in connection with in-license agreement
6,249
—
The accompanying notes are an integral part of these consolidated financial statements.

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89
ACLARIS THERAPEUTICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Organization and Nature of Business
Overview
Aclaris Therapeutics, Inc. was incorporated under the laws of the State of Delaware in 2012. Aclaris Therapeutics,
Inc. and its wholly owned subsidiaries are referred to collectively as the “Company.”  
The Company is a clinical-stage biopharmaceutical company focused on developing novel small and large
molecule product candidates for immuno-inflammatory diseases. The Company’s proprietary KINect drug discovery
platform combined with its preclinical development capabilities allows the Company to identify and advance potential
product candidates that it may develop independently or in collaboration with third parties. In addition to identifying and
developing its novel product candidates, the Company is pursuing strategic alternatives, including identifying and
consummating transactions with third-party partners, to further develop, obtain marketing approval for and/or
commercialize its novel product candidates. The Company also provides contract research services to third parties enabled
by its early-stage research and development expertise.
Liquidity
The Company’s consolidated financial statements have been prepared on the basis of continuity of operations,
realization of assets and the satisfaction of liabilities in the ordinary course of business.  As of December 31, 2024, the
Company had cash, cash equivalents and marketable securities of $203.9 million and an accumulated deficit of $902.9
million. Since inception, the Company has incurred net losses and negative cash flows from its operations. There can be no
assurance that profitable operations will ever be achieved, and, if achieved, will be sustained on a continuing basis. In
addition, development activities, including clinical and preclinical testing of the Company’s product candidates, will
require significant additional financing. The future viability of the Company is dependent on its ability to successfully
develop its product candidates and to generate revenue from identifying and consummating transactions with third-party
partners to further develop, obtain marketing approval for and/or commercialize its development assets or to raise
additional capital to finance its operations. The Company will require additional capital to develop its product candidates
and to support its discovery efforts.
Additional funds may not be available on a timely basis, on commercially acceptable terms, or at all, and such
funds, if raised, may not be sufficient to enable the Company to continue to implement its long-term business strategy. The
Company's ability to raise additional capital may be adversely impacted by potentially worsening global economic
conditions caused by a variety of factors including geopolitical tensions and inflationary pressures. If the Company is
unable to raise sufficient additional capital or generate revenue from transactions with potential third-party partners for the
development and/or commercialization of its product candidates, it may need to substantially curtail planned operations.
The Company’s failure to raise capital as and when needed could have a negative impact on its financial condition and
ability to pursue its business strategies.
In accordance with Accounting Standards Codification (“ASC”) Subtopic 205-40, Disclosure of Uncertainties
about an Entity’s Ability to Continue as a Going Concern, the Company evaluated whether there are conditions and events,
considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within
one year after the date that its consolidated financial statements are issued.  As of the report date, the Company does not
believe that substantial doubt exists about its ability to continue as a going concern. The Company believes its existing
cash, cash equivalents and marketable securities are sufficient to fund its operating and capital expenditure requirements
for a period greater than 12 months from the date of issuance of these consolidated financial statements.
2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying consolidated financial statements have been prepared in conformity with generally accepted
accounting principles in the United States (“GAAP”).  The consolidated financial statements of the Company include the

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accounts of the operating parent company, Aclaris Therapeutics, Inc., and its wholly owned subsidiaries. All intercompany
transactions have been eliminated. Based upon the Company’s revenue, the Company believes that gross profit does not
provide a meaningful measure of profitability and, therefore, has not included a line item for gross profit on the
consolidated statement of operations.
Reclassifications
Certain prior year amounts have been reclassified to conform to the current year financial statement presentation.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of expenses during the reporting periods. Significant estimates
and assumptions reflected in these financial statements include, but are not limited to, contingent consideration and the
valuation of stock-based awards. Estimates are periodically reviewed in light of changes in circumstances, facts and
experience.  As of the date of issuance of these financial statements, the Company is not aware of any specific event or
circumstance that would require an update to its estimates, assumptions and judgments or revise the carrying value of its
assets or liabilities. Actual results could differ from the Company’s estimates.
Revenue Recognition
The Company accounts for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers.
Under ASC Topic 606, revenue is recognized when a customer obtains control of promised goods or services in an amount
that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services.
To determine revenue recognition in accordance with ASC Topic 606, the Company performs the following five
steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine
the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize
revenue when (or as) performance obligations are satisfied.  At contract inception, the Company assesses the goods or
services promised within a contract with a customer to identify the performance obligations, and to determine if they are
distinct. The Company recognizes the revenue that is allocated to each distinct performance obligation when (or as) that
performance obligation is satisfied. The Company only recognizes revenue when collection of the consideration it is
entitled to under a contract with a customer is probable.
Contract Research Revenue
The Company earns contract research revenue from the provision of laboratory services. Contract research
revenue is generally evidenced by contracts with clients which are on an agreed upon fixed-price, fee-for-service basis and
are generally billed on a monthly basis in arrears for services rendered.  Revenue related to these contracts is generally
recognized as the laboratory services are performed, based upon the rates specified in the contracts.  Under ASC Topic 606,
the Company elected to apply the “right to invoice” practical expedient when recognizing contract research revenue and as
such, recognizes revenue in the amount which it has the right to invoice. ASC Topic 606 also provides an optional
exemption, which the Company has elected to apply, from disclosing remaining performance obligations when revenue is
recognized from the satisfaction of the performance obligation in accordance with the “right to invoice” practical
expedient.
Licensing Revenue
Licenses of Intellectual Property – The Company recognizes revenue received from non-refundable,
upfront fees related to the licensing of intellectual property when the intellectual property is determined to be distinct from
the other performance obligations identified in the arrangement, the license has been transferred to the customer, and the
customer is able to use and benefit from the license. 
Milestone and Royalty Payments – The Company considers any future potential milestones and sales-
based royalties to be variable consideration. The Company recognizes revenue from development, regulatory and

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anniversary milestone payments as they are achieved. The Company recognizes revenue from commercial milestones and
royalty payments as the sales occur.
Deferred Income Related to the Sale of Future Royalties
The Company amortizes its deferred income liability related to the sale of future OLUMIANT® (baricitinib)
royalties under the units-of-revenue method by computing a ratio of the proceeds received to the total expected payments
over the term of the royalty purchase agreement and then applying that ratio to the period’s estimated cash payment (see
Note 13). The amortization is based on the Company’s current estimate of future royalty payments.
Cash Equivalents
The Company considers all short-term, highly liquid investments with original maturities of three months or less
at acquisition date to be cash equivalents. Cash equivalents, which have consisted of money market funds and commercial
paper, are stated at fair value.
Marketable Securities
Marketable securities with original maturities of greater than three months and remaining maturities of less than
one year from the balance sheet date are classified as short-term. Marketable securities with remaining maturities of greater
than one year from the balance sheet date are classified as long-term.
The Company classifies all marketable securities as available-for-sale securities. The Company’s marketable
securities are measured and reported at fair value using either quoted prices in active markets for identical securities or
quoted prices in markets that are not active for identical or similar securities. Unrealized gains and losses are reported as a
separate component of stockholders’ equity. The cost of securities sold is determined on a specific identification basis, and
realized gains and losses, if any, are included in other income within the consolidated statement of operations and
comprehensive loss. If any adjustment to fair value reflects a decline in the value of the investment, the Company considers
available evidence to evaluate the extent to which the decline is “other than temporary” and reduces the investment to fair
value through a charge to the statement of operations and comprehensive loss.
Property and Equipment
Property and equipment are stated at cost less accumulated depreciation. Depreciation expense is recognized using
the straight-line method over the useful life of the asset. Computer equipment is depreciated over three years. Laboratory
equipment is depreciated over three to five years. Furniture and fixtures are depreciated over five years. Leasehold
improvements are depreciated over the shorter of the lease term or their useful life. Expenditures for repairs and
maintenance of assets are charged to expense as incurred. Upon retirement or sale, the cost and related accumulated
depreciation of assets disposed of are removed from the accounts and any resulting gain or loss is included in loss from
operations.
Impairment of Long-Lived Assets
Long-lived assets consist of property and equipment. Long-lived assets to be held and used are tested for
recoverability whenever events or changes in business circumstances indicate that the carrying amount of the assets may
not be fully recoverable. Factors that the Company considers in deciding when to perform an impairment review include
significant underperformance of the business in relation to expectations, significant negative industry or economic trends
and significant changes or planned changes in the use of the assets. If an impairment review is performed to evaluate a
long-lived asset for recoverability, the Company compares forecasts of undiscounted cash flows expected to result from the
use and eventual disposition of the long-lived asset to its carrying value. An impairment loss would be recognized when
estimated undiscounted future cash flows expected to result from the use of an asset are less than its carrying amount. The
impairment loss would be based on the excess of the carrying value of the impaired asset over its fair value, determined
based on discounted cash flows.
Intangible Assets
Intangible assets include both definite-lived and indefinite-lived assets. Definite-lived intangible assets consist of

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a drug discovery platform the Company acquired through the acquisition of Confluence Life Sciences, Inc. (now known as
Aclaris Life Sciences, Inc.) (“Confluence”). Definite-lived intangible assets are amortized over their estimated useful life
based on the pattern over which the intangible assets are consumed or otherwise used up. If that pattern cannot be reliably
determined, the straight-line method of amortization is used. Indefinite-lived intangible assets consisted of an in-process
research and development (“IPR&D”) product candidate acquired through the acquisition of Confluence. IPR&D assets are
considered indefinite-lived until the completion or abandonment of the associated research and development efforts. The
cost of IPR&D is either amortized over its estimated useful life beginning when the underlying product candidate is
approved and launched commercially, or expensed immediately if development of the product candidate is abandoned or
otherwise impaired.
Definite-lived intangible assets are tested for impairment when events or changes in circumstances indicate that
the carrying value of the asset may not be recoverable.  Indefinite-lived intangible assets are tested for impairment at least
annually, which the Company performs during the fourth quarter, or when indicators of an impairment are present.  The
Company recognizes impairment losses when and to the extent that the estimated fair value of an intangible asset is less
than its carrying value.
During the quarter ended December 31, 2023, the Company performed an impairment analysis on the IPR&D
intangible asset due to the Company’s decision to discontinue further development of the product candidate in immuno-
inflammatory diseases. The Company’s impairment analysis resulted in a fair value of the IPR&D intangible asset which
was less than the carrying value. As a result, the Company recorded an impairment charge of $6.6 million, the full balance
of the IPR&D intangible asset.
Discontinued Operations
As of December 31, 2024 and 2023, the Company had $2.2 million in discontinued operations reported as other
current liabilities in the Company’s consolidated balance sheet, related to discontinued commercial products.
Leases
Leases represent a company’s right to use an underlying asset and a corresponding obligation to make payments to
a lessor for the right to use those assets. The Company evaluates leases at their inception to determine if they are an
operating lease or a finance lease. A lease is accounted for as a finance lease if it meets one of the following five criteria:
the lease has a purchase option that is reasonably certain of being exercised, the present value of the future cash flows are
substantially all of the fair market value of the underlying asset, the lease term is for a significant portion of the remaining
economic life of the underlying asset, the title to the underlying asset transfers at the end of the lease term, or if the
underlying asset is of such a specialized nature that it is expected to have no alternative uses to the lessor at the end of the
term.  Leases that do not meet the finance lease criteria are accounted for as an operating lease.
The Company recognizes assets and liabilities for leases at their inception based upon the present value of all
payments due under the lease. The Company uses an incremental borrowing rate to determine the present value of
operating leases. The Company determines incremental borrowing rates by referencing collateralized borrowing rates for
debt instruments with terms similar to the respective lease.  The Company recognizes expense for operating leases on a
straight-line basis over the term of each lease. The Company includes estimates for any residual value guarantee
obligations under its leases in lease liabilities recorded on its consolidated balance sheet.
Right-of-use assets are included in other assets on the Company’s consolidated balance sheet for operating leases.
Obligations for lease payments are included in other current liabilities and other liabilities on the Company’s consolidated
balance sheet for operating leases.  
Contingent Consideration
The Company records a contingent consideration liability related to future potential payments resulting from the
acquisition of Confluence based upon significant unobservable inputs including the achievement of regulatory and
commercial milestones, as well as estimated future sales levels and the discount rates applied to calculate the present value
of the potential payments. Significant judgement is involved in determining the appropriateness of these assumptions.
 These assumptions are considered Level 3 inputs. Revaluation of the contingent consideration liability can result from
changes to one or more of these assumptions. The Company evaluates the fair value estimate of the contingent

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consideration liability on a quarterly basis with changes, if any, recorded as income or expense in the consolidated
statement of operations.
The fair value of contingent consideration is estimated using a probability-weighted expected payment model for
regulatory milestone payments and a Monte Carlo simulation model for commercial milestone and royalty payments and
then applying a risk-adjusted discount rate to calculate the present value of the potential payments. Significant assumptions
used in the Company’s estimates include the probability of achieving regulatory milestones and commencing
commercialization, which are based on an asset’s current stage of development and a review of existing clinical data.
Probability of success assumptions ranged between 17% and 40% at December 31, 2024. Additionally, estimated future
sales levels and the risk-adjusted discount rate applied to the potential payments are also significant assumptions used in
calculating the fair value. The discount rate ranged between 7.4% and 8.7% depending on the year of each potential
payment.
Research and Development Costs
Research and development costs are expensed as incurred. Research and development expenses include salaries,
stock-based compensation and benefits of employees, and other operational costs related to the Company’s research and
development activities, including depreciation expenses and the cost of research and development contracts which the
Company has entered into with outside vendors to conduct both preclinical studies and clinical trials. Significant judgment
and estimates are made in determining the amount of research and development costs recognized in each reporting period.
The Company analyzes the progress of its preclinical studies and clinical trials, completion of milestone events, invoices
received and contracted costs when estimating research and development costs. Actual results could differ from the
Company’s estimates. The Company’s historical estimates for research and development costs have not been materially
different from the actual costs.
Acquisitions
In November 2024, the Company entered into an exclusive license agreement with Biosion, Inc. (“Biosion”) (as
described in Note 12). This transaction has been accounted for as an asset acquisition in accordance with the Financial
Accounting Standards Board (“FASB”) ASC 805-50, rather than a business combination. Cash payments and issuances of
equity instruments for IPR&D, as well as future payments, are initially treated as the acquisition of an asset but then
immediately expensed as there is no future alternative use under the accounting guidance for the asset. These payments are
reflected as IPR&D expense on the Company’s consolidated statements of operations and comprehensive loss.  
The Company accounted for the transaction as an asset acquisition because substantially all of the fair value of the
assets acquired is concentrated in a single asset. ASC 805-10-55-5A, which sets forth a screen test, provides that if
substantially all of the fair value of assets acquired is concentrated in a single identifiable asset or group of similar
identifiable assets, the assets acquired are not a business.
Stock-Based Compensation
The Company measures the compensation expense of stock-based awards granted to employees and directors
using the grant date fair value of the award. The Company has issued stock options and restricted stock unit (“RSU”)
awards with service-based vesting conditions, as well as with performance-based vesting conditions. The Company has not
issued awards that include market-based conditions. For service-based awards the Company recognizes stock-based
compensation expense on a straight-line basis over the requisite service period, which is typically four years. For
performance-based awards the Company recognizes stock-based compensation expense on a straight-line basis over the
requisite service period beginning in the period that it becomes probable the performance conditions will occur. At each
balance sheet date, the Company evaluates whether any performance conditions related to a performance-based award have
changed. The effect of any change in performance conditions would be recognized as a cumulative catch-up adjustment in
the period such change occurs, and any remaining unrecognized compensation expense would be recognized on a straight-
line basis over the remaining requisite service period. The impact of forfeitures is recognized in the period in which they
occur.
The Company measures the compensation expense of stock-based awards granted to consultants using the grant
date fair value of the award. The Company recognizes compensation expense over the period during which services are
rendered by the consultant.

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The Company classifies stock-based compensation expense in its statement of operations and comprehensive loss
in the same manner in which the award recipient’s payroll costs are classified or in which the award recipients’ service
payments are classified.
The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing
model. The Company estimates expected volatility based on its stock price's historical volatility, as the Company has
determined that it has adequate historical data regarding the volatility of its own publicly-traded stock price. The expected
term of the Company’s stock options has been determined using the “simplified” method for awards that qualify as “plain
vanilla” options. The expected term of stock options granted to non-employees is equal to the contractual term of the
option award. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of
grant of the award for time periods approximately equal to the expected term of the award. The Company uses an expected
dividend yield of zero based on the fact that the Company has never paid cash dividends and does not expect to pay cash
dividends in the future.
The fair value of each RSU is measured using the closing price of the Company’s common stock on the date of
grant.
Patent Costs
All patent related costs incurred in connection with filing and prosecuting patent applications are expensed as
incurred due to the uncertainty about the recovery of the expenditure. Amounts incurred are classified as general and
administrative expenses.
Income Taxes
The Company accounts for income taxes using the asset and liability method, which requires the recognition of
deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the
financial statements or in the Company’s tax returns. Deferred taxes are determined based on the difference between the
financial statement and tax basis of assets and liabilities using enacted tax rates in effect in the years in which the
differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded in the provision for income
taxes. The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to
the extent it believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of the
deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense.
Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering
prudent and feasible tax planning strategies.
The Company accounts for uncertainty in income taxes recognized in the consolidated financial statements by
applying a two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be
evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities. If the tax
position is deemed more likely than not to be sustained, the tax position is then assessed to determine the amount of benefit
to recognize in the consolidated financial statements. The amount of the benefit that may be recognized is the largest
amount that has a greater than 50% likelihood of being realized upon ultimate settlement. The provision for income taxes
includes the effects of any resulting tax reserves and unrecognized tax benefits that are considered appropriate, as well as
the related net interest and penalties.
Comprehensive Loss
Comprehensive loss includes net loss as well as other changes in stockholders’ equity that result from transactions
and economic events other than those with stockholders. Comprehensive loss is primarily comprised of net loss and
unrealized gains (losses) on marketable securities.
Net Loss per Share
Basic net loss per share is computed using the weighted average number of common shares outstanding during the
period. Diluted net loss per share is computed using the sum of the weighted average number of common shares
outstanding during the period, plus the weighted average number of potential shares of common stock from the assumed

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exercise of stock options and the assumed vesting of RSUs, if dilutive. Since the Company was in a net loss position, basic
and diluted net loss per share were the same for each of the periods presented.
Fair Value Measurements
Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that
would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or
liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to
measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial
assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair
value hierarchy, of which the first two are considered observable and the last is considered unobservable:
●
Level 1 — Quoted prices in active markets for identical assets or liabilities.
●
Level 2 — Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for
similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or
liabilities, or other inputs that are observable or can be corroborated by observable market data.
●
Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to
determining the fair value of the assets or liabilities, including pricing models, discounted cash flow
methodologies and similar techniques.
The Company’s cash equivalents, marketable securities and contingent consideration are carried at fair value,
determined according to the fair value hierarchy described above. The carrying value of the Company’s accounts payable
and accrued expenses approximate fair value due to the short-term nature of these liabilities.  
Concentration of Credit Risk and of Significant Suppliers
Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of
cash, cash equivalents and marketable securities. The Company holds all cash, cash equivalents and marketable securities
balances at three accredited financial institutions, the majority of which are in amounts that exceed or are not subject to
federally insured limits. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk
associated with commercial banking relationships.
The Company is dependent on third-party manufacturers to supply drug product, including all underlying
components, for its research and development activities, including preclinical and clinical testing.  These activities could be
adversely affected by a significant interruption in the supply of active pharmaceutical ingredients or other components.
Segment Reporting
Operating segments are components of a company for which separate financial information is available and
evaluated regularly by the chief operating decision maker (“CODM”) in assessing performance and deciding how to
allocate resources. The Company has two reportable segments, therapeutics and contract research. The therapeutics
segment is focused on identifying and developing innovative therapies to address significant unmet needs for immuno-
inflammatory diseases. The contract research segment earns revenue from the provision of laboratory services. The
Company does not report asset information by segment because it is not regularly provided to the CODM, and all of the
Company’s assets are held in the United States.
Recently Issued Accounting Pronouncements
In November 2024, the FASB issued Accounting Standards Update (“ASU”) No. 2024-03, “Income Statement—
Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income
Statement Expenses.” This standard requires disclosure of additional information about specific expense categories in the
notes to financial statements on an annual and interim basis. This ASU becomes effective for annual periods beginning
after December 15, 2026 and interim periods within annual reporting periods beginning after December 15, 2027. The
Company is currently assessing the impact of this ASU.

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In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax
Disclosures.” This standard enhances disclosures related to income taxes, including the rate reconciliation and information
on income taxes paid. This ASU becomes effective for annual periods beginning after December 15, 2024. The Company
is currently assessing the impact of this ASU.
In November 2023, the FASB issued ASU No. 2023-07, “Segment Reporting (Topic 280): Improvements to
Reportable Segment Disclosures.” This standard requires disclosure of significant segment expenses and other segment
items by reportable segment. The Company adopted ASU No. 2023-07 effective December 31, 2024, on a retrospective
basis, the impact of which is limited to additional segment expense disclosures in the notes to the Company’s consolidated
financial statements.
3. Fair Value of Financial Assets and Liabilities
The following tables present information about the fair value measurements of the Company’s financial assets and
liabilities which are measured at fair value on a recurring and non-recurring basis, and indicate the level of the fair value
hierarchy utilized to determine such fair values:
December 31, 2024
(In thousands)
    
Level 1
    
Level 2
    
Level 3
    
Total
Assets:
         
         
         
         
Cash equivalents
$ 22,245
$
—
$
—
$
22,245
Marketable securities
 
—
179,326
—
179,326
Total assets
$ 22,245
$ 179,326
$
—
$ 201,571
Liabilities:
Contingent consideration
$
—
$
—
$ 8,700
$
8,700
Total liabilities
$
—
$
—
$ 8,700
$
8,700
December 31, 2023
(In thousands)
    
Level 1
    
Level 2
    
Level 3
    
Total
Assets:
         
         
         
         
Cash equivalents
$ 32,177
$
—
$
—
$
32,177
Marketable securities
 
—
141,999
—
141,999
Total assets
$ 32,177
$ 141,999
$
—
$ 174,176
Liabilities:
Contingent consideration
$
—
$
—
$ 6,200
$
6,200
Total liabilities
$
—
$
—
$ 6,200
$
6,200
As of December 31, 2024 and 2023, the Company’s cash equivalents consisted of a money market fund, which
was valued based upon Level 1 inputs. The Company’s marketable securities as of December 31, 2024 consisted of
commercial paper and corporate debt, foreign government agency debt and U.S. government and government agency debt
securities, which were valued based upon Level 2 inputs. The Company’s marketable securities as of December 31, 2023
consisted of commercial paper and corporate debt, asset-backed debt, foreign government agency debt and U.S.
government and government agency debt securities, which were valued based upon Level 2 inputs.
In determining the fair value of its Level 2 investments, the Company relied on quoted prices for identical
securities in markets that are not active. These quoted prices were obtained by the Company with the assistance of a third-
party pricing service based on available trade, bid and other observable market data for identical securities. During the
years ended December 31, 2024 and 2023, there were no transfers into or out of Level 3.
The overall $2.5 million increase in the fair value of the contingent consideration liability during the year ended
December 31, 2024 was primarily due to changes in estimated sales levels, changes to the probability of success for certain
product candidates and the passage of time, offset by changes in market rates.

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97
As of December 31, 2024 and 2023 the fair value of the Company’s available-for-sale marketable securities by
type of security was as follows:
December 31, 2024
Gross
Gross
Book
Unrealized
Unrealized
Fair
(In thousands)
Value
Gain
Loss
Value
Marketable securities:
Corporate debt securities(1)
$ 105,154
$
192
$
(156)
$ 105,190
Commercial paper
4,720
—
(1)
4,719
Foreign government agency debt securities
4,911
16
—
4,927
U.S. government and government agency debt securities(2)
64,454
47
(11)
64,490
Total marketable securities
$ 179,239
$
255
$
(168)
$ 179,326
(1) Included in Corporate debt securities is $59.8 million with maturity dates between one and three years.
(2) Included in U.S. government and government agency debt securities is $30.5 million with maturity dates
between one and three years.
December 31, 2023
Gross
Gross
Book
Unrealized
Unrealized
Fair
(In thousands)
Value
Gain
Loss
Value
Marketable securities:
Corporate debt securities(1)
$
52,362
$
65
$
(142)
$
52,285
Commercial paper
12,345
2
(1)
12,346
Asset-backed debt securities(2)
10,953
42
(30)
10,965
Foreign government agency debt securities(3)
4,698
43
—
4,741
U.S. government and government agency debt securities(4)
61,750
8
(96)
61,662
Total marketable securities
$ 142,108
$
160
$
(269)
$ 141,999
(1) Included in Corporate debt securities is $28.0 million with maturity dates between one and two years.
(2) Included in Asset-backed debt securities is $6.2 million with maturity dates between one and three years.
(3) Included in Foreign government agency debt securities is $4.7 million with a maturity date between one and two
years.
(4) Included in U.S. government and government agency debt securities is $23.9 million with maturity dates
between one and two years.
4. Property and Equipment, Net
Property and equipment, net consisted of the following:
December 31, 
December 31, 
(In thousands)
2024
2023
Computer equipment
    $
1,198     $
1,253
Lab equipment
3,137
3,154
Furniture and fixtures
661
558
Leasehold improvements
817
817
Property and equipment, gross
 
5,813
 
5,782
Accumulated depreciation
 
(4,805)
 
(4,162)
Property and equipment, net
$
1,008
$
1,620
Depreciation expense was $0.7 million and $0.8 million for the years ended December 31, 2024 and 2023,
respectively.

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98
5. Accrued Expenses
Accrued expenses consisted of the following:
December 31, 
December 31, 
(In thousands)
    
2024
    
2023
Employee compensation expenses
$
4,979
$
3,910
Research and development expenses
2,173
6,661
Deferred transaction consideration
3,927
—
Licensing expenses
8,645
5,478
Restructuring expenses (Note 15)
163
3,112
Other expenses
 
446
 
285
Total accrued expenses
$
20,333
$
19,446
6. Stockholders’ Equity
Preferred Stock
As of December 31, 2024 and 2023, the Company’s amended and restated certificate of incorporation (as
amended, the “Charter”) authorized the Company to issue 10,000,000 shares of undesignated preferred stock.  There were
no shares of preferred stock outstanding as of December 31, 2024 and 2023.
Common Stock
As of December 31, 2024 and 2023, the Company’s Charter authorized the Company to issue 200,000,000 shares
of $0.00001 par value common stock. There were 107,850,124 and 70,894,889 shares of common stock issued and
outstanding as of December 31, 2024 and 2023, respectively.
Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s
stockholders. Common stockholders are entitled to receive dividends, as may be declared by the board of directors, if any,
subject to any preferential dividend rights of any series of preferred stock that may be outstanding. No dividends have been
declared through December 31, 2024.
Warrants
The Company issued warrants to Biosion and Chia Tai Tianqing Pharmaceutical Group, Co., Ltd. (“CTTQ”) to
purchase, in the aggregate, 14,281,985 shares of the Company’s common stock (the “Warrants”). The Warrants have an
initial exercise price of $0.00001 per share, subject to adjustment as provided in the Warrants. The Warrants are
immediately exercisable, subject to any applicable overseas direct investment filing that may be required for the holders.
The Warrants will terminate when exercised in full. The Company classified the Warrants within equity because they are
indexed to the Company’s own stock. The Company assigned an estimated fair value of $44.8 million to the Warrants,
which was based on the fair value of the Company’s common stock on the date of issuance less the nominal exercise price
of $0.00001 per share.
At-The-Market Facility
In April 2023, the Company sold 3.4 million shares of its common stock for aggregate gross proceeds of $27.5
million, pursuant to a sales agreement with Leerink Partners LLC (formerly SVB Securities LLC) and Cantor Fitzgerald &
Co., as sales agents, dated February 23, 2023. The Company paid selling commissions of $0.8 million in connection with
the sale.
Private Placement
In November 2024, the Company closed a private placement in which it sold approximately 35.6 million shares of
its common stock for aggregate gross proceeds of $80.0 million. The Company paid placement agent and other fees of $5.1
million in connection with the private placement.

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99
7. Stock-Based Awards
2024 Inducement Plan
In November 2024, the Company’s board of directors adopted the 2024 Inducement Plan (the “2024 Inducement
Plan”). The 2024 Inducement Plan is a non-stockholder approved stock plan adopted pursuant to the “inducement
exception” provided under Nasdaq listing rules. The only employees eligible to receive grants of awards under the 2024
Inducement Plan are individuals who satisfy the standards for inducement grants under Nasdaq rules, generally including
individuals who were not previously an employee or director of the Company. Under the terms of the 2024 Inducement
Plan, the Company may grant up to 2,000,000 shares of common stock pursuant to nonqualified stock options, stock
appreciation rights, restricted stock awards, RSUs, and other stock awards.  The shares of common stock underlying any
awards that expire, or are otherwise terminated, settled in cash or repurchased by the Company under the 2024 Inducement
Plan will be added back to the shares of common stock available for issuance under the 2024 Inducement Plan. As of
December 31, 2024, 1,194,000 shares remained available for grant under the 2024 Inducement Plan. The Company had
626,000 stock options and 180,000 RSUs outstanding as of December 31, 2024 under the 2024 Inducement Plan.
2015 Equity Incentive Plan
In September 2015, the Company’s board of directors adopted the 2015 Equity Incentive Plan (the “2015 Plan”),
and the Company’s stockholders approved the 2015 Plan. The 2015 Plan became effective in connection with the
Company’s initial public offering in October 2015. Beginning at the time the 2015 Plan became effective, no further grants
may be made under the Company’s 2012 Equity Compensation Plan, as amended and restated (the “2012 Plan”). The 2015
Plan provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock
awards, RSU awards, performance stock awards, cash-based awards and other stock-based awards. The number of shares
initially reserved for issuance under the 2015 Plan was 1,643,872 shares of common stock. The number of shares of
common stock that may be issued under the 2015 Plan automatically increased on January 1 of each year which ended on
January 1, 2025, in an amount equal to the lesser of (i) 4.0% of the shares of the Company’s common stock outstanding on
December 31 of the preceding calendar year or (ii) an amount determined by the Company’s board of directors. The shares
of common stock underlying any awards that expire, are otherwise terminated, settled in cash or repurchased by the
Company under the 2015 Plan and the 2012 Plan will be added back to the shares of common stock available for issuance
under the 2015 Plan. As of December 31, 2024, 4,820,283 shares remained available for grant under the 2015 Plan. As of
January 1, 2025, the number of shares of common stock that may be issued under the 2015 Plan was automatically
increased by 4,314,004 shares. The Company had 5,548,563 stock options and 2,096,151 RSUs outstanding as of
December 31, 2024 under the 2015 Plan.
2017 Inducement Plan
In July 2017, the Company’s board of directors adopted the 2017 Inducement Plan (the “2017 Inducement Plan”).
The 2017 Inducement Plan is a non-stockholder approved stock plan adopted pursuant to the “inducement exception”
provided under Nasdaq listing rules. The Company had 329,000 stock options outstanding as of December 31, 2024 under
the 2017 Inducement Plan. All shares of common stock that were eligible for issuance under the 2017 Inducement Plan
after October 1, 2018, including any shares underlying any awards that expire or are otherwise terminated, reacquired to
satisfy tax withholding obligations, settled in cash or repurchased by the Company in the future that would have been
eligible for re-issuance under the 2017 Inducement Plan, were retired. 
2012 Equity Compensation Plan
In August 2012, the Company’s board of directors adopted the 2012 Plan and the Company’s stockholders
approved the 2012 Plan. Upon the 2015 Plan becoming effective, no further grants can be made under the 2012 Plan. The
Company had 218,404 stock options outstanding as of December 31, 2024 under the 2012 Plan.

Table of Contents
100
Stock Option Valuation
The weighted average assumptions the Company used to estimate the fair value of stock options granted during
the years ended December 31, 2024 and 2023 were as follows:
    
Year Ended
December 31, 
2024
2023
 
Risk-free interest rate
 
3.91 %
3.55 %
Expected term (in years)
 
6.0
6.2
Expected volatility
 
81.62 %
77.73 %
Expected dividend yield
 
0 %
0 %
The Company recognizes compensation expense for awards over their vesting period. Compensation expense for
awards includes the impact of forfeitures in the period when they occur.
Stock Options
The following table summarizes stock option activity for the years ended December 31, 2024 and 2023:
    
    
     Weighted     
Weighted
Average
Average
Remaining
Aggregate
Number
Exercise
Contractual
Intrinsic
(In thousands, except share and per share data and years)
of Shares
Price
Term
Value
(in years)
Outstanding as of December 31, 2022
5,167,164
$
16.04  
7.2
$ 15,288
Granted
2,241,550
 
15.62
Exercised
(71,092)
 
1.31
473
Forfeited and cancelled
(918,167)
 
16.85
Outstanding as of December 31, 2023
 
6,419,455
$
15.94  
7.1
$
14
Granted
 
2,608,700
1.86
Exercised
(162,388)
1.31
285
Forfeited and cancelled
 
(2,143,800)
15.06
Outstanding as of December 31, 2024
 
6,721,967
$
11.12
6.8
$
2,968
Options vested and expected to vest as of December 31, 2024
 
6,721,967
$
11.12
6.8
$
2,968
Options exercisable as of December 31, 2024
 
3,555,450
$
15.39
5.0
$
944
The weighted average grant date fair value of stock options granted during the years ended December 31, 2024
and 2023 was $1.34 and $10.98 per share, respectively.

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101
Restricted Stock Units
The following table summarizes RSU activity for the years ended December 31, 2024 and 2023.
Weighted
Average
Grant Date
Aggregate
Number
Fair Value
Intrinsic
(In thousands, except share and per share data)
of Shares
Per Share
Value
Outstanding as of December 31, 2022
1,520,730
$
14.02
Granted
993,662
15.17
Vested
(745,279)
11.72
$
8,262
Forfeited and cancelled
(247,173)
15.15
Outstanding as of December 31, 2023
1,521,940
$
15.72
Granted
2,852,573
1.39
Vested
(1,473,327)
5.51
$
2,959
Forfeited and cancelled
(625,035)
13.03
Outstanding as of December 31, 2024
2,276,151
$
5.12
Stock-Based Compensation
Stock-based compensation expense included in total costs and expenses on the consolidated statement of
operations included the following:
Year Ended
 
December 31, 
 
(In thousands)
    
2024
    
2023
 
Cost of revenue
   $
938     $
1,456
Research and development
3,135
6,801
General and administrative
  6,783
  12,285
Total stock-based compensation expense
$ 10,856
$ 20,542
As of December 31, 2024, the Company had unrecognized stock-based compensation expense for stock options
and RSUs of $10.0 million and $7.6 million, respectively, which is expected to be recognized over weighted average
periods of 2.3 years and 1.9 years, respectively.
8. Net Loss per Share
Basic and diluted net loss per share is summarized in the following table:
Year Ended
 
December 31, 
 
(In thousands, except for share and per share data)
    
2024
    
2023
Numerator:
    
    
    
Net loss
$
(132,065)
$
(88,481)
Denominator:
Weighted average shares of common stock outstanding, basic and diluted
  77,296,665
  69,808,855
Net loss per share, basic and diluted
$
(1.71)
$
(1.27)
The Company’s potentially dilutive securities, which included stock options and RSUs, have been excluded from
the computation of diluted net loss per share since the effect would be to reduce the net loss per share. Therefore, the
weighted average number of shares of common stock outstanding used to calculate both basic and diluted net loss per share
is the same. For the year ended December 31, 2024, the basic and diluted weighted-average shares outstanding

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102
included the Warrants, as there were no outstanding contingencies associated with the vesting or exercisability of the
Warrants.
The following table presents potential shares of common stock excluded from the calculation of diluted net loss
per share for the years ended December 31, 2024 and 2023. All share amounts presented in the table below represent the
total number outstanding as of December 31 of each year.
 
December 31, 
2024
2023
 
Options to purchase common stock
6,721,967
6,419,455
Restricted stock unit awards
2,276,151
1,521,940
Total potential shares of common stock
8,998,118
7,941,395
9. Leases
The Company has operating leases for office space and laboratory facilities. The components of lease expense
were as follows:
Year Ended
December 31, 
(In thousands)
    
2024
    
2023
Operating lease expense
    $
862     $
1,092
Rent expense was $0.9 million and $1.1 million for the years ended December 31, 2024 and 2023, respectively,
which was recognized on a straight-line basis over the term of the lease.
Operating Leases
Agreements for Office and Laboratory Space
The Company had a sublease agreement pursuant to which it subleased 33,019 square feet of office space for its
headquarters in Wayne, Pennsylvania, which expired on October 31, 2023.
In May 2023, the Company entered into a new lease agreement pursuant to which it leases 11,564 square feet of
office space for its headquarters in Wayne, Pennsylvania. The lease commenced on November 1, 2023 and has a term that
runs through February 2029.
In February 2019, the Company entered into a sublease agreement for 20,433 square feet of office and laboratory
space in St. Louis, Missouri. The lease commenced in June 2019 and has a term that runs through May 2029. In January
2023, the Company amended the sublease agreement to add an additional 6,261 square feet of office and laboratory space
effective February 2023. The Company exercised its option to terminate the leasing of the additional space effective as of
June 30, 2024.
Supplemental balance sheet information related to operating leases is as follows:  
December 31, 
December 31, 
(In thousands)
2024
2023
Operating Leases:
Gross cost
$
4,530
$
5,094
Accumulated amortization
(1,688)
(1,235)
Other assets
$
2,842
$
3,859
Current portion of lease liabilities
$
481
$
426
Other liabilities
2,117
3,074
Total operating lease liabilities
$
2,598
$
3,500

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103
Amortization expense related to operating lease right-of-use assets and accretion of operating lease liabilities
totaled $0.5 million and $0.8 million for the years ended December 31, 2024 and 2023, respectively.
Supplemental information related to operating leases is as follows:
Year Ended
(In thousands, except for years and percentages)
December 31, 
Supplemental Cash Flow Lease Information:
2024
2023
 
Operating cash flows from operating leases
$
736
$
974
Leased assets obtained in exchange for new operating lease liabilities
$
—
$
2,010
Weighted-Average Remaining Lease Term (in years):
Operating leases
4.3
5.3
Weighted-Average Discount Rate:
Operating leases
10.1 %
10.2 %
Future minimum lease payments under operating lease agreements are as follows:
(In thousands)
Operating
Year Ending December 31, 
      
Leases
2025
694
2026
742
2027
760
2028
779
2029
260
Total undiscounted lease payments
3,235
Less: unrecognized interest
(637)
Total lease liability
$
2,598
  
10. Income Taxes
During the years ended December 31, 2024 and 2023, the Company did not record an income tax benefit for net
operating losses incurred in each year due to the uncertainty of realizing a benefit from those items.  
Loss before income taxes is allocated as follows:
Year Ended December 31,
(In thousands)
2024
2023
U.S. operations
$
(132,065)
$
(88,848)
Foreign operations
—
—
Loss before income taxes
$
(132,065)
$
(88,848)

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104
A reconciliation of the U.S. federal statutory income tax rate to the Company’s effective income tax rate is as
follows:
Year Ended December 31,
2024
2023
    
Federal statutory income tax rate
    
(21.0)%  
(21.0)%  
State taxes, net of federal benefit
(2.1) 
(1.7) 
Impact of state rate changes
(1.1)
17.7
Research and development tax credits
(1.1) 
(5.9) 
Excess equity compensation tax benefit, net of officer limitation
0.8
0.6
Revaluation of contingent consideration
0.4
(6.3)
Non-deductible royalty payments
1.8
4.3
Change in deferred tax asset valuation allowance
22.1
11.7
Other
0.2  
0.2  
Effective income tax rate
(0.0)%  
(0.4)%  
Deferred tax liabilities, net consisted of the following:
December 31,
 
(In thousands)
2024
2023
 
Deferred tax assets:
        
         
Net operating loss carryforwards
$
120,361
$ 119,155
Capitalized start-up costs
3,469
3,812
Research and development tax credit carryforwards
 
21,954
 
20,505
Section 174 research and development capitalization
31,185
30,984
Capitalized research and development expense
 
2,145
 
2,359
Stock‑based compensation expense
 
19,101
 
18,055
Accrued compensation
791
1,219
Lease liabilities
588
774
Deferred income
5,510
—
IPR&D
20,004
—
Other
 
408
 
407
Total deferred tax assets
  225,516
  197,270
Deferred tax liabilities:
Property and equipment
(56)
(187)
Right-to-use assets
(642)
(853)
Other
 
(458)
 
(1,106)
Total deferred tax liabilities
 
(1,156)
 
(2,146)
Valuation allowance
  (224,360)
  (195,124)
Deferred tax liabilities, net
$
—
$
—
As of December 31, 2024, the Company had federal and state net operating loss (“NOL”) carryforwards of $469.4
million and $401.1 million, respectively, which will begin to expire in 2032. As of December 31, 2024, the Company also
had federal research and development tax credit carryforwards of $21.9 million which will begin to expire in 2032, and
state research and development tax credit carryforwards of $0.1 million which will begin to expire in 2030. Utilization of
the NOLs and research and development tax credit carryforwards in the United States may be subject to a substantial
annual limitation under Section 382 of the Internal Revenue Code of 1986 due to ownership changes that may have
occurred previously or that could occur in the future. These ownership changes may limit the amount of carryforwards that
can be utilized annually to offset future taxable income. In general, an ownership change, as defined by Section 382, results
from transactions increasing the ownership of certain stockholders or public groups in the stock of a corporation by more
than 50% over a three-year period. The Company has completed an analysis under Section 382 for NOLs generated from
July 13, 2012 through December 31, 2024.  Although the Company has experienced Section 382 ownership changes since
2012, the Company concluded that it should have sufficient ability to utilize NOLs accumulated during the periods tested.
The Company has not yet determined if a Section 382 ownership change has occurred after December 31, 2024. In
addition, the Company may experience ownership changes in the future as a result of subsequent shifts in its stock
ownership, some of which may be outside of the Company’s control.

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105
The Company has evaluated the positive and negative evidence bearing upon its ability to realize the deferred tax
assets. The Company considered its history of cumulative net losses incurred since inception, its lack of substantial revenue
generated to date, and its forecasted future operating losses and concluded that it is more likely than not that the Company
will not realize the benefits of its deferred tax assets. Accordingly, a full valuation allowance has been established against
the deferred tax assets as of December 31, 2024 and 2023. The Company evaluates positive and negative evidence of its
ability to realize deferred tax assets at each reporting period.
Changes in the valuation allowance for deferred tax assets during the years ended December 31, 2024 and 2023,
which related primarily to the increases in NOLs, capitalized research and development costs, and research and
development tax credit carryforwards, were as follows:
Year Ended December 31,
 
(In thousands)
2024
2023
 
Valuation allowance at beginning of year
$
(195,124)    $ (184,688)
Decreases recorded as benefit to income tax provision
 
—
 
—
Increases recorded to income tax provision
 
(29,236)
 
(10,436)
Valuation allowance as of end of year
$
(224,360)
$ (195,124)
The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates.   In the
normal course of business, the Company is subject to examination by federal and state jurisdictions, where applicable.
There are currently no pending income tax examinations. The Company’s tax years are still open under statute from 2021
to the present. All open years may be examined to the extent that tax credit or NOLs are used in future periods. The
Company’s policy is to record interest and penalties related to income taxes as part of its income tax provision. The
Company has not recorded any amounts for unrecognized tax benefits as of December 31, 2024 and 2023.
11. Related Party Transaction
Anand Mehra, a member of the Company’s board of directors, purchased 666,666 shares of the Company’s
common stock at a price per share of $2.25 in connection with a private placement in November 2024.
12. Agreements Related to Intellectual Property
Exclusive License Agreement – Biosion, Inc.
In November 2024, the Company entered into an exclusive license agreement (the “Biosion Agreement”) with
Biosion, pursuant to which it received the exclusive rights to develop, manufacture and commercialize bosakitug (ATI-045)
and ATI-052 worldwide, excluding Mainland China, Macau, Hong Kong and Taiwan (“Greater China”). In connection with
the Biosion Agreement, the Company also entered into a collaboration agreement (the “CTTQ Agreement”) with Biosion
and CTTQ, a licensee of bosakitug in Greater China.
In partial consideration of the rights and licenses under the Biosion Agreement and CTTQ Agreement, the
Company, agreed to, in the aggregate, (i) pay $30.0 million in upfront cash consideration, plus $4.5 million for the
reimbursement of certain development costs, (ii) issue the Warrants, and (iii) pay $6.2 million for the reimbursement of
certain development costs and drug product material as set forth in the Biosion Agreement. The Company determined that
the transaction was an acquisition of assets with no alternative future use and therefore expensed as incurred the fair value
of the consideration given of $85.6 million as a component of in-process research and development expense during the
year ended December 31, 2024. The Company incurred $1.3 million in expenses related to this transaction which were
expensed as incurred.
In addition, the Company agreed to pay, in the aggregate, (i) up to $125 million upon the achievement of specified
regulatory milestones commencing with product approval, (ii) up to $795 million upon the achievement of specified sales
milestones, (iii) a tiered low-to-mid single digit royalty based upon a percentage of annual net sales, subject to specified
reductions as set forth in the Biosion Agreement, and (iv) a portion of any sublicense consideration received from the grant
of any sublicense or similar rights under any of the rights or licenses granted to the Company under the Biosion
Agreement. The Company will expense these payments in the period when either they are determined to be probable of
occurring or when the payment is triggered.

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106
The Warrants have an initial exercise price of $0.00001 per share, subject to adjustment as provided in the
Warrants. The Warrants are immediately exercisable, subject to any applicable overseas direct investment filing that may
be required for the holders. The Warrants will terminate when exercised in full. The Company classified the Warrants
within equity because they are indexed to the Company’s own stock. The Company assigned an estimated fair value of
$44.8 million to the Warrants, which was based on the fair value of the Company’s common stock on the date of issuance
less the nominal exercise price of $0.00001 per share.
License Agreement – Sun Pharmaceutical Industries, Inc.
In December 2023, the Company entered into an exclusive patent license agreement with Sun Pharmaceutical
Industries, Inc. (“Sun Pharma”). Under the license agreement, the Company granted Sun Pharma exclusive rights under
certain patents that the Company exclusively licenses from a third party. The patents relate to the use of deuruxolitinib, Sun
Pharma’s Janus kinase (“JAK”) inhibitor, or other isotopic forms of ruxolitinib, to treat alopecia areata or androgenetic
alopecia. Under the license agreement, Sun Pharma has paid the Company upfront and regulatory payments, and has
agreed to pay the Company other regulatory and commercial milestone payments upon the achievement of specified
milestones set forth in the agreement, and a mid single-digit tiered royalty calculated as a percentage of Sun Pharma’s net
sales. The Company has separate contractual obligations under which the Company has agreed to pay to third parties a
portion of the consideration it may receive under the license agreement.
 The Company recognized $3.0 million and $15.0 million of licensing revenue during the years ended December
31, 2024 and 2023, respectively.
License Agreement – Pediatrix Therapeutics, Inc.    
In November 2022, the Company entered into a license agreement with Pediatrix Therapeutics, Inc. (“Pediatrix”),
under which the Company granted Pediatrix the exclusive rights to develop, manufacture and commercialize lepzacitinib in
Greater China. Pediatrix has paid the Company an upfront payment, and has agreed to pay the Company development,
regulatory and commercial milestone payments upon the achievement of specified milestones set forth in the agreement,
and a tiered royalty ranging from a low-to-high single digit percentage of net sales of lepzacitinib by Pediatrix in Greater
China. A portion of consideration received from Pediatrix is payable to the former Confluence equity holders as described
below under “—Agreement and Plan of Merger - Confluence.”
License Agreement – Eli Lilly and Company
In August 2022, the Company entered into a non-exclusive patent license agreement with Eli Lilly and Company
(“Lilly”). Under the license agreement, the Company granted Lilly non-exclusive rights under certain patents and patent
applications that the Company exclusively licenses from a third party. The patents and patent applications relate to the use
of baricitinib, Lilly’s JAK inhibitor, to treat alopecia areata. Under the license agreement, Lilly has paid the Company
upfront, regulatory and certain commercial milestone payments, and agreed to pay the Company anniversary payments and
other commercial milestone payments upon the achievement of specified milestones as set forth in the agreement, and a
low single-digit royalty calculated as a percentage of Lilly’s net sales of baricitinib for the treatment of alopecia areata. The
Company has separate contractual obligations under which the Company has agreed to pay to third parties an amount equal
to any regulatory and commercial milestone payments it receives under the Lilly license agreement, as well as a portion of
the upfront consideration and a portion of the royalties it may receive under the license agreement. In July 2024, the
Company entered into a royalty purchase agreement with OCM IP Healthcare Portfolio LP, an investment vehicle for
Ontario Municipal Employees Retirement System (“OMERS”), pursuant to which the Company sold to OMERS a portion
of the Company’s future royalty payments and the remaining anniversary milestones associated with the license to Lilly
(see Note 13).
During the years ended December 31, 2024 and 2023, the Company recognized licensing revenue under this
agreement of $13.2 million and $12.7 million, respectively, from Lilly, a portion of which was payable to third parties. As
of December 31, 2024, we recorded a receivable of $8.6 million in other current assets, which represents licensing revenue
due to third parties.

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Asset Purchase Agreement – EPI Health, LLC
In October 2019, the Company sold RHOFADE (oxymetazoline hydrochloride) cream, 1% (“RHOFADE”) to EPI
Health, LLC (“EPI Health”) pursuant to an asset purchase agreement. In July 2023, EPI Health filed a voluntary petition
for relief under Chapter 11 of the United States Bankruptcy Code. Through the bankruptcy process, EPI Health and its
parent company, Novan, Inc., sold the RHOFADE assets to a third party, which excluded the Company’s asset purchase
agreement with EPI Health and the outstanding amounts due. The sale was approved by the bankruptcy court in September
2023. As a result of the bankruptcy proceedings, all amounts that were due and outstanding by EPI Health have been fully
reserved.
Agreement and Plan of Merger – Confluence
In August 2017, the Company entered into an Agreement and Plan of Merger, pursuant to which it acquired
Confluence (the “Confluence Agreement”). Under the Confluence Agreement, the Company agreed to pay the former
Confluence equity holders aggregate remaining contingent consideration of up to $75.0 million based upon the
achievement of specified regulatory and commercial milestones set forth in the Confluence Agreement. In addition, the
Company agreed to pay the former Confluence equity holders future royalty payments calculated as a low single-digit
percentage of annual net sales, subject to specified reductions, limitations and other adjustments, until the date that all of
the patent rights for that product have expired, as determined on a country-by-country and product-by-product basis or, in
specified circumstances, ten years from the first commercial sale of such product.  In addition to the payments described
above, if the Company sells, licenses or transfers any of the intellectual property acquired from Confluence pursuant to the
Confluence Agreement to a third party, the Company will be obligated to pay the former Confluence equity holders a
portion of any consideration received from such sale, license or transfer in specified circumstances.
As of December 31, 2024 and December 31, 2023, the balance of the Company’s contingent consideration
liability was $8.7 million and $6.2 million, respectively (see Note 3).
13. Sale of Future Royalties
In July 2024, the Company entered into a royalty purchase agreement with OMERS. Under the royalty purchase
agreement, the Company sold to OMERS a portion of the Company’s future royalty payments and the remaining
anniversary milestones associated with the Company’s existing license to Lilly relating to OLUMIANT® (baricitinib) for
the treatment of alopecia areata.
Under the terms of the royalty purchase agreement, the Company received an upfront payment of $26.5 million.
In exchange, OMERS acquired a portion of the royalty payable by Lilly to the Company for worldwide net sales of
OLUMIANT for the treatment of alopecia areata from April 1, 2024 through the remainder of the royalty term under the
Company’s license agreement with Lilly, and 100% of the remaining anniversary milestone payments payable by Lilly to
the Company under the license agreement.
The Company evaluated the arrangement and concluded that the proceeds from the sale of future royalties should
be recorded as deferred income on the consolidated balance sheet, as the criteria for debt classification were not met in
accordance with ASC Topic 470. In particular, the Company does not have significant continuing involvement in the
generation of the cash flows due to OMERS and there are no guaranteed rates of return to OMERS. The Company
recognizes non-cash royalty income under the “units-of-revenue” method in the consolidated statements of operations and
comprehensive loss. The Company initially recorded $0.7 million as a receivable for royalties earned in the second quarter
of 2024 and recorded $25.8 million as deferred income related to the sale of future royalties. For the year ended December
31, 2024, the Company recognized $1.9 million of non-cash royalty income. As of December 31, 2024, the current and
non-current portions of the remaining deferred income recognized under the units-of revenue method were $3.9 million
and $20.0 million, respectively.
14. Retirement Savings Plan
The Company has a defined contribution savings plan under Section 401(k) of the Internal Revenue Code. This
plan covers substantially all employees who meet minimum age and service requirements and allows participants to defer a
portion of their annual compensation on a pre-tax basis. Company contributions to the plan may be made at the discretion

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of the Company’s board of directors. The Company has elected to match employee contributions to the 401(k) Plan up to
4% of the employee’s earnings, subject to certain limitations. Company contributions under the 401(k) Plan were $0.4
million and $0.7 million for the years ended December 31, 2024 and 2023, respectively.
15. Restructuring Charges
In December 2023, the Company’s board of directors approved a reduction of the Company’s workforce by
approximately 46%, which was completed as of December 31, 2024. This action was taken in order to streamline
operations, reduce costs and preserve capital. The Company expensed the cost of cash severance payments, other benefits
and annual bonus payments for certain terminated employees with retention periods more than the sixty-day minimum
retention period over their respective service terms. During the year ended December 31, 2024, the Company recognized
severance expense of $2.7 million and made cash severance payments of $5.6 million to impacted employees. Of the $2.7
million of expenses incurred during the year ended December 31, 2024, $1.5 million, $1.0 million and $0.2 million were
recorded in research and development expense, general and administrative expense and cost of revenue, respectively, in the
consolidated statement of operations and comprehensive loss. During the year ended December 31, 2023, the Company
recorded a restructuring charge of $3.1 million which represents a one-time termination benefit for impacted employees
with retention periods less than the minimum retention period, which was triggered immediately upon either terminating or
giving notice to the impacted employees. Of the $3.1 million of expenses incurred during the year ended December 31,
2023, $2.2 million, $0.9 million and $19 thousand were recorded in research and development expense, general and
administrative expense and cost of revenue, respectively, in the consolidated statement of operations and comprehensive
loss.
16. Segment Information
The Company has  two  reportable segments, therapeutics and contract research. The therapeutics segment is
focused on identifying and developing innovative therapies to address significant unmet needs for immuno-inflammatory
diseases and earns revenue through licensing of the Company’s intellectual property. The contract research segment earns
revenue from the provision of laboratory services.
All intersegment revenue has been eliminated in the Company’s consolidated statement of operations. All
customers and revenue pertaining to the Company’s segments are based in the United States and all assets are held in the
United States. The Company does not report asset information by segment because it is not regularly provided to the
Company’s chief executive officer, who is the Company’s CODM.
Since inception, the Company has incurred net losses and has an accumulated deficit of $902.9 million as of
December 31, 2024. As such, the CODM uses segment loss from operations for each segment in assessing segment
performance by comparing the results of each segment to forecast.   All intercompany activity is eliminated in the
intersegment elimination column in the tables below.

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A reconciliation of operating loss to total consolidated loss before income taxes, for the years ended December 31,
2024 and 2023 is as follows:
(In thousands)
Contract
Intersegment
Year Ended December 31, 2024
Therapeutics
Research
Elimination
Total
Revenue from external customers
$
16,179
$
2,541
$
—
$
18,720
Intercompany revenue
—
13,416
(13,416)
—
Cost of revenue
—
15,349
(12,557)
2,792
    Bosakitug
299
—
—
299
    ATI-2138
4,209
—
—
4,209
    ATI-052
1,895
—
—
1,895
    Lepzacitinib
1,300
—
—
1,300
    Zunsemetinib
4,496
—
—
4,496
    Discovery
5,775
—
—
5,775
    Total Research and development project spend
17,974
—
—
17,974
    Personnel
11,446
—
—
11,446
    Other research and development expense(1)
5,025
—
—
5,025
Total research and development
34,445
—
(859)
33,586
General and administrative
—
4,035
—
4,035
Licensing
12,666
—
—
12,666
Revaluation of contingent consideration
2,500
—
—
2,500
In-process research and development
86,905
—
—
86,905
Segment operating loss
$
(120,337)
$
(3,427)
$
—
$
(123,764)
Non-segment general and administrative
18,168
Other income
9,867
Loss before income taxes
(132,065)
(In thousands)
Contract
Intersegment
Year Ended December 31, 2023
Therapeutics
Research
Elimination
Total
Revenue from external customers
$
28,214
$
3,035
$
—
$
31,249
Intercompany revenue
—
16,543
(16,543)
—
Cost of revenue
—
18,960
(15,537)
3,423
    Bosakitug
—
—
—
—
    ATI-2138
12,143
—
—
12,143
    ATI-052
—
—
—
—
    Lepzacitinib
12,129
—
—
12,129
    Zunsemetinib
36,461
—
—
36,461
    Discovery
6,881
—
—
6,881
    Total Research and development project spend
67,614
—
—
67,614
    Personnel
18,977
—
—
18,977
    Other research and development expense(1)
12,799
—
—
12,799
Total research and development
99,390
—
(1,006)
98,384
General and administrative
—
4,561
—
4,561
Licensing
14,658
—
—
14,658
Revaluation of contingent consideration
(26,900)
—
—
(26,900)
In-process research and development
6,629
—
—
6,629
Segment operating loss
$
(65,563)
$
(3,943)
$
—
$
(69,506)
Non-segment general and administrative
27,851
Other income
8,509
Loss before income taxes
(88,848)
(1) Other segment items for the Therapeutics segment consist primarily of the following research and development expenses; stock-based compensation, depreciation and amortization, regulatory.

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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under the supervision of and with the participation of our management, including our principal executive officer
and our principal financial officer, we conducted an evaluation of the effectiveness of our disclosure controls and
procedures as of December 31, 2024, the end of the period covered by this Annual Report. The term “disclosure controls
and procedures,” as set forth in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required
to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the rules and forms promulgated by the SEC. Disclosure
controls and procedures include, without limitation, controls and procedures designed to ensure that information required
to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and
communicated to the company’s management, including its principal executive and principal financial officers, as
appropriate to allow timely decisions regarding required disclosure. Based on the evaluation of our disclosure controls and
procedures as of December 31, 2024, our principal executive officer and principal financial officer concluded that, as of
such date, our disclosure controls and procedures were effective at the reasonable assurance level.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial
reporting, as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Management conducted an assessment of our
internal control over financial reporting based on the framework established in 2013 by the Committee of Sponsoring
Organizations of the Treadway Commission in Internal Control—Integrated Framework. Based on the assessment,
management concluded that our internal control over financial reporting was effective as of December 31, 2024 to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with U.S. GAAP.
This Annual Report does not include an attestation report of our registered public accounting firm regarding
internal control over financial reporting as required by Section 404(b) of the Sarbanes-Oxley Act of 2002. Because we are
a non-accelerated filer under the SEC rules, management’s report was not subject to attestation by our independent
registered public accounting firm.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting identified in connection with the evaluation
required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the quarter ended December 31, 2024
that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Limitations on Effectiveness of Disclosure Controls and Procedures and Internal Control over Financial
Reporting
In designing and evaluating the disclosure controls and procedures and internal control over financial reporting,
management recognizes that any controls and procedures, no matter how well designed and operated, can provide only
reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and
procedures and internal control over financial reporting must reflect the fact that there are resource constraints and that
management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their
costs.

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Item 9B. Other Information
Entry into At-the-Market Facility
On February 27, 2025, we entered into an Amended and Restated Sales Agreement (the “Amended ATM
Agreement”) with Leerink Partners LLC (“Leerink”) and Cantor Fitzgerald & Co. (“Cantor”) under which we may offer
and sell, from time to time at our sole discretion, shares of our common stock having an aggregate offering price of up to
$100.0 million through Leerink and Cantor as sales agents. The issuance and sale, if any, of common stock under the
Amended ATM Agreement will be made pursuant to a registration statement on Form S-3. The Amended ATM Agreement
amends and restates the sales agreement with Leerink and Cantor, dated February 23, 2023, which provided for the offer
and sale of up to $200.0 million of our common stock from time to time through Leerink and Cantor as sales agents.
Leerink and Cantor may sell shares of our common stock by any method permitted by law deemed to be an “at the
market offering” as defined in Rule 415 of the Securities Act. Leerink and Cantor have agreed to use commercially
reasonable efforts to sell our common stock from time to time, based on our instructions (including any price, time or size
limits or other customary parameters or conditions we may impose). We will pay Leerink and Cantor a commission equal
to three percent (3.0%) of the gross sales proceeds of any common stock sold through Leerink and Cantor under the
Amended ATM Agreement. We provided customary representations, warranties and covenants, and the parties have agreed
to customary indemnification rights.
We are not obligated to make any sales of common stock under the Amended ATM Agreement. The offering of
shares of our common stock pursuant to the Amended ATM Agreement will terminate upon the earlier of (i) the sale of the
maximum dollar value of common stock permitted to be sold pursuant to the Amended ATM Agreement or (ii) termination
of the Amended ATM Agreement in accordance with its terms.
The foregoing description of the Amended ATM Agreement is not complete and is qualified in its entirety by
reference to the full text of the Amended ATM Agreement, a copy of which is filed as an exhibit to this Annual Report.
Entry into Employment Agreement with Neal Walker
On February 26, 2025, our board of directors (the “Board”) appointed Neal Walker as our Chief Executive Officer
effective immediately. In connection with such appointment, we have entered into an employment agreement with Dr.
Walker, dated February 26, 2025 (the “Walker Employment Agreement”). The Walker Employment Agreement has an
initial term of two years and thereafter shall be automatically renewed for successive one-year periods unless either party
elects not to renew the agreement at least 90 days prior to the expiration of the applicable term. Dr. Walker will receive an
annual base salary of $615,000, which may be increased by the Board in its sole discretion. Dr. Walker will be eligible to
receive a target annual bonus equal to up to 60% of the annual base salary, subject to the achievement of performance goals
to be determined by the Board.
Under the Walker Employment Agreement, if Dr. Walker’s employment with the Company ends due to his death
or “disability”, his resignation for “good reason” or his termination by the Company other than for “cause,” each as defined
in the Walker Employment Agreement, in either case that does not occur on or within three months prior to or 12 months
after the effective date of a “change of control” (as defined in the Walker Employment Agreement), he will be entitled to
receive (i) continuation of his then-current base salary for a period of 12 months; (ii) any bonuses for the preceding year for
which he remains employed through the last day of such year; and (iii) continued health benefits under COBRA for up to
12 months. Dr. Walker would also receive the foregoing benefits in the event his employment is terminated upon non-
renewal of the Walker Employment Agreement by the Company.    
In the case Dr. Walker’s employment with the Company ends due to his death or “disability,” his resignation for
“good reason” or his termination by the Company other than for “cause,” in either case that occurs on or within three
months prior to or 12 months after the effective date of a “change of control”, then he will be entitled to receive, in addition
to the benefits described in the preceding paragraph, (i) continuation of his then-current base salary for an additional six
months;  (ii) an additional lump sum payment equal to 150% of his target bonus; (iii) continued health benefits under
COBRA for up to an additional six months; and (iv) acceleration of all unvested equity awards.
The foregoing benefits are conditioned, among other things, on Dr. Walker’s compliance with his post-

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termination obligations under the Walker Employment Agreement and his execution of a general release of claims in favor
of the Company.
Dr. Walker has previously entered into our standard form of indemnification agreement.
The foregoing summary of the Walker Employment Agreement is not complete and is qualified in its entirety by
reference to the full text of the Walker Employment Agreement, a copy of which is filed as an exhibit to this Annual
Report.
Adoption, Modification and Termination of Rule 10b5-1 Plans and Certain Other Trading Arrangements
On December 12, 2024, Joseph Monahan, our Chief Scientific Officer, adopted a Rule 10b5-1 trading plan
intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act. Sales may commence
under the plan on March 13, 2025 and the plan terminates on December 31, 2025, subject to earlier termination in
accordance with its terms. The aggregate number of securities to be sold under the plan is 60,000 shares of common stock.
No other officers or directors (as defined in Rule 16a-1(f) under the Exchange Act) adopted, modified or
terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement” (as each term is defined in
Item 408 of Regulation S-K), during the quarter ended December 31, 2024.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.

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PART III
Item 10. Directors, Executive Officers and Corporate Governance
The following table sets forth information concerning our directors and executive officers, including their ages as
of February 10, 2025. There are no family relationships among any of our directors or executive officers.
 
For our directors, the biographies below include information, as of February 10, 2025, regarding the specific and
particular experience, qualifications, attributes or skills that led to the conclusion that the person should serve as a director
of our company.
Name
     Age
Position
Executive Officers:
Neal Walker
55
Chief Executive Officer, Chair of the Board of Directors
Hugh Davis, Ph.D.
66
President, Chief Operating Officer and Director
Kevin Balthaser
38
Chief Financial Officer
Joseph Monahan, Ph.D.
69
Chief Scientific Officer
James Loerop
61
Chief Business Officer
Non-management Directors:
Christopher Molineaux
59
Lead Independent Director
Maxine Gowen, Ph.D.
66
Director
William Humphries
58
Director
Anand Mehra, M.D.
49
Director
Vincent Milano
61
Director
Andrew Schiff, M.D.
59
Director
Executive Officers
Neal Walker
Neal Walker co-founded our company and has served as our Chief Executive Officer since February 2025. He
previously served as our Interim Chief Executive Officer from January 2024 to February 2025, as our President from
January 2024 to November 2024, and as our Chief Executive Officer and President from our inception in 2012 until
December 2022. Dr. Walker has also served as a member of our Board since our inception and currently serves as its Chair.
Dr. Walker’s term of office as a director will expire at the 2025 Annual Meeting of Stockholders. Dr. Walker co-founded
NeXeption, LLC, a biopharmaceutical assets management company, in 2012. Dr. Walker co-founded and served as
President and Chief Executive Officer and a member of the board of directors of Vicept Therapeutics, Inc., a dermatology-
focused specialty pharmaceutical company, from 2009 until its acquisition by Allergan, Inc. in 2011. Previously, Dr.
Walker co-founded and led a number of life science companies, including Octagon Research Solutions, Inc., a software and
services provider to biopharmaceutical companies (acquired by Accenture plc), Trigenesis Therapeutics, Inc., a specialty
dermatology company, where he served as Chief Medical Officer (acquired by Dr. Reddy’s Laboratories Inc.), and Cutix
Inc., a commercial dermatology company. He began his pharmaceutical industry career at Johnson and Johnson, Inc. Dr.
Walker is a director of Aldeyra Therapeutics, Inc., a publicly held biotechnology company, as well as several private
companies. Dr. Walker received an M.B.A. degree from The Wharton School of the University of Pennsylvania, a Doctor
of Osteopathic Medicine degree from the Philadelphia College of Osteopathic Medicine and a B.A. degree in Biology from
Lehigh University. Dr. Walker’s experience as a board-certified dermatologist and the founder of our company and other
pharmaceutical companies, his background in clinical and drug development in dermatology and other fields, and his
knowledge of the pharmaceutical industry contributed to the conclusion of our Board that he should serve as a director of
our company.
Hugh Davis
Hugh Davis has served as our President and Chief Operating Officer, and as a member of our Board, since
November 2024. Dr. Davis’s term of office as a director will expire at the 2027 Annual Meeting of Stockholders. He
previously held various roles at Biosion, Inc., a biopharmaceutical company, beginning in March 2020, including as Chief
Operating Officer of Biosion Inc., President of Biosion USA, Inc., and, most recently, as Biosion’s Chief Business &
Development Officer and President. Dr. Davis has also served as a member of the board of directors of Biosion, Inc. since

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March 2020. From 2018 to February 2020, Dr. Davis served as Chief Business Officer at Frontage Laboratories, Inc. He
previously served in a series of leadership roles at Janssen R&D/Johnson & Johnson, including as Vice President & Head,
Biologics Development Sciences, Biophysics and Laboratory Operations. Dr. Davis’s previous biopharmaceutical
experience includes leadership roles at GlaxoSmithKline and Rhone-Poulenc Rorer. Dr. Davis earned Ph.D. and M.S.
degrees in Biochemistry from Villanova University and a B.S. degree in Chemistry from Gannon University. Our Board
believes that Dr. Davis’ extensive scientific leadership experience with pharmaceutical and biotechnology companies
qualifies him to serve as a director of our company.
Kevin Balthaser
Kevin Balthaser has served as our Chief Financial Officer since January 2023. Mr. Balthaser has served in roles of
increasing responsibility at our company since 2017, most recently as Vice President, Finance from January 2022 until his
appointment as Chief Financial Officer. Before joining our company, he held positions of increasing responsibility within
the accounting and finance department at Lannett Company, Inc., a publicly traded generic pharmaceutical company, where
he was also a member of the team responsible for executing capital market transactions and acquisitions. Mr. Balthaser
began his career with the accounting firm PricewaterhouseCoopers LLP. Mr. Balthaser is a certified public accountant in
Pennsylvania. He received his B.S. degree in finance from Pennsylvania State University and his M.B.A. degree from
Villanova University.
Joseph Monahan, Ph.D.
Joseph Monahan, Ph.D., has served as our Chief Scientific Officer since January 2021. From 2017 to January
2021, Dr. Monahan served as our Executive Vice President, Research and Development. In 2010, Dr. Monahan founded a
biotechnology company, Confluence Life Sciences, Inc., and functioned as its Chief Scientific Officer until our acquisition
of Confluence in 2017. He has also held multiple research leadership positions at Pfizer Inc., including Executive Director,
Inflammation Research, global kinase platform leadership team lead; site head of enzymology and biophysics, and
inflammation research and development lead. He has held adjunct and visiting professor positions at Washington
University Medical School, University of Missouri and University of California, Los Angeles School of Medicine. Dr.
Monahan received his B.S. degree in biochemistry from the University of New York at Buffalo and a Ph.D. degree in
biochemistry from the University of South Carolina.
James Loerop
James Loerop has served as our Chief Business Officer since January 2022. From July 2019 to January 2022, Mr.
Loerop served as Executive Vice President, Business Development and Strategic Planning at Anika Therapeutics, Inc., a
publicly held company focused on products for joint preservation, where he was responsible for global business
development activities. From 2017 to July 2019, Mr. Loerop served as Chief Corporate Development Officer for Lupin
Pharmaceuticals, Inc., where he was a member of the company’s Executive Leadership Team and was responsible for
global business development and corporate development activities. Prior to joining Lupin, Mr. Loerop held senior
leadership roles at various companies in the pharmaceutical and life sciences industry, including at Alexion
Pharmaceuticals, Inc. as Senior Vice President of Global Business Development, GlaxoSmithKline as Vice President of
North America Business Development, and Stiefel Laboratories, Inc. as Senior Vice President of Global Corporate
Development, prior to GSK’s acquisition of Stiefel. Mr. Loerop received a B.S. degree in marketing from Western
Michigan University.
Non-Management Directors
Christopher Molineaux
Christopher Molineaux has served as Lead Independent Director of our Board since January 2023, having
previously served as Chair since June 2019. He has served as a member of our Board since 2014. Mr. Molineaux’s term of
office as a director will expire at the 2027 Annual Meeting of Stockholders. Since 2010, Mr. Molineaux has served as
President and Chief Executive Officer of Life Sciences Pennsylvania, formerly Pennsylvania Bio, a pharmaceutical and
biotech industry advocacy organization, and previously served as its Senior Vice President, Membership Services. Mr.
Molineaux previously served as worldwide Vice President of Pharmaceutical Communications and Public Affairs for
Johnson & Johnson, a global healthcare company. Mr. Molineaux also served as Vice President for Public Affairs at the
Pharmaceutical Research and Manufacturers of America (PhRMA). He received a B.A. degree from the College of the

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Holy Cross. Our Board believes that Mr. Molineaux’s substantial pharmaceutical and biotechnology industry experience
qualifies him to serve as a director of our company.
Maxine Gowen, Ph.D.
Maxine Gowen has served as a member of our Board since July 2019. Dr. Gowen’s term of office as a director
will expire at the 2026 Annual Meeting of Stockholders. Dr. Gowen previously served as the part-time Chief Executive
Officer of TamuroBio Inc., a biotechnology company, from August 2019 to December 2021. Dr. Gowen founded Trevena,
Inc., a publicly held biopharmaceutical company, and served as its President and Chief Executive Officer from 2007 until
2018. Prior to this, Dr. Gowen held a variety of leadership roles at GlaxoSmithKline (GSK) over a period of fifteen years.
Dr. Gowen was previously President and Managing Partner at SR One, the venture capital subsidiary of GSK, where she
led its investments in, and served on the board of directors of, numerous companies. Until 2002, Dr. Gowen was Vice
President, Drug Discovery, Musculoskeletal Diseases at GSK, responsible for drug discovery and early development for
osteoporosis, arthritis and metastatic bone disease. Dr. Gowen held a tenured academic position in the School of
Pharmacology, University of Bath, UK from 1989 to 1992. Dr. Gowen currently serves on the boards of directors of the
publicly held companies Merus N.V. and as chair of Passage Bio, Inc. Within the past five years, Dr. Gowen served as a
director of the publicly held companies Trevena, Inc., Aceragen, Inc. (formerly known as Idera Pharmaceuticals, Inc.) and
Akebia Therapeutics, Inc. Dr. Gowen received a B.Sc. in biochemistry from the University of Bristol, UK, then received a
Ph.D. in cell biology from the University of Sheffield, UK, and received an M.B.A from The Wharton School of the
University of Pennsylvania. Dr. Gowen also received a D.Sc. from the University of Bath, UK. Our Board believes that Dr.
Gowen’s extensive leadership experience with pharmaceutical and biotechnology companies qualifies her to serve as a
director of our company.
William Humphries
William Humphries has served as a member of our Board since 2016. Mr. Humphries’s term of office as a director
will expire at the 2025 Annual Meeting of Stockholders. Mr. Humphries has served as the Chief Executive Officer of
MedPharm, a contract development and manufacturing organization, since January 2025. From June 2023 to January 2025,
he served as the Chief Executive Officer and member of the board of directors of Alcami Corporation, a contract
development and manufacturing organization. From May 2021 to May 2023, Mr. Humphries served as the Chief Executive
Officer of lsosceles Pharmaceuticals Inc, a biotechnology company. From 2018 to December 2020, Mr. Humphries served
as President of Ortho Dermatologics, the dermatology division of Bausch Health Companies, Inc., and previously served as
its Executive Vice President, Company Group Chairman for Dermatology and OraPharma from 2017 to 2018. From 2012
to 2016, he served as President and Chief Executive Officer of the North American business of Merz, Inc., an affiliate of
Merz Pharma Group, a specialty healthcare company. From 2006 to 2012, Mr. Humphries served in a number of leadership
positions with Stiefel Laboratories, Inc., a dermatology pharmaceutical company, including as its Chief Commercial
Officer and then as President beginning in 2008. Stiefel was acquired by GSK in 2009, after which Mr. Humphries served
as the President of Dermatology for Stiefel from 2009 until 2012. Mr. Humphries previously held multiple senior executive
roles in sales and marketing, business development and international marketing for Allergan, Inc., concluding as Vice
President of its U.S. skincare business. Mr. Humphries currently serves as a director of the publicly held company
Clearside Biomedical, Inc. Within the past five years, he served as a member of the boards of directors of the publicly held
companies PhaseBio Pharmaceuticals, Inc. and STRATA Skin Sciences, Inc, as well as Bryn Pharmaceuticals and SKNV.
He received a B.A. degree from Bucknell University and an M.B.A. degree from Pepperdine University. Our Board
believes that Mr. Humphries’ experience as a pharmaceutical company executive provides him with the qualifications and
skills to serve as a director of our company.
Anand Mehra, M.D.
Anand Mehra, M.D. has served as a member of our Board since 2014. Dr. Mehra’s term of office as a director will
expire at the 2026 Annual Meeting of Stockholders. Dr. Mehra has served as a founding partner of Forge Life Science
Partners, a biotech investment firm, since its inception in May 2023. Dr. Mehra joined Sofinnova Investments, Inc. (fka
Sofinnova Ventures, Inc.), a biotech investment firm, in 2007 and served as a managing general partner until January 2020.
Prior to joining Sofinnova, Dr. Mehra worked in J.P. Morgan’s private equity and venture capital group, and before that, Dr.
Mehra was a consultant in McKinsey & Company’s pharmaceutical practice. Dr. Mehra currently serves as the chair of the
board of directors of the publicly held company Merus N.V. Dr. Mehra received a B.A. degree in political philosophy from
the University of Virginia and an M.D. degree from Columbia University’s College of Physicians and Surgeons. Our

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Board believes that Dr. Mehra’s extensive experience in the life sciences industry, his service on the boards of directors of
other public life sciences companies and his extensive leadership experience qualify him to serve as a director of our
company.
Vincent Milano
Vincent Milano has served as a member of our Board since January 2020. Dr. Milano’s term of office as a director
will expire at the 2027 Annual Meeting of Stockholders. Mr. Milano most recently served as Chair of the board of directors
of Aceragen, Inc. (formerly known as Idera Pharmaceuticals, Inc.), a publicly held biopharmaceutical company, from 2022
to August 2023, having previously served as Idera’s President and Chief Executive Officer and a member of Idera’s board
of directors since 2014. From 1996 to 2014, Mr. Milano served in increasingly senior roles at ViroPharma Inc., a
pharmaceutical company acquired by Shire plc in 2014, most recently as Chairman, President and Chief Executive Officer
from 2008 to 2014. From 1985 to 1996, Mr. Milano served in increasingly senior roles, most recently as a senior manager,
at KPMG LLP, an independent registered public accounting firm. Mr. Milano currently serves on the boards of directors of
BioCryst Pharmaceuticals, Inc., a publicly held company, and Life Sciences Cares Philadelphia, a non-profit organization.
Within the past five years, Mr. Milano served on the board of directors of Venatorx Pharmaceuticals, Inc., a privately held
company. Mr. Milano received a B.S. degree in Accounting from Rider College. Our Board believes that Mr. Milano’s
extensive leadership experience with pharmaceutical and biotechnology companies qualifies him to serve as a director of
our company.
Andrew Schiff, M.D.
Andrew Schiff has served as a member of our Board since 2017. Dr. Schiff’s term of office as a director will
expire at the 2025 Annual Meeting of Stockholders. Dr. Schiff joined Aisling Capital, an investment firm, in 1999 and
currently serves as one of its managing partners. Prior to joining Aisling Capital, Dr. Schiff practiced internal medicine for
six years at The New York Presbyterian Hospital, where he maintains his position as a Clinical Assistant Professor of
Medicine. Dr. Schiff currently serves on the board of directors of the publicly held company Monte Rosa Therapeutics, Inc.
Dr. Schiff also currently serves on the board of directors of the privately held company Dren Bio. He is a board member of
the Visiting Nurse Service of New York, as well as other charitable organizations. Dr. Schiff received an M.D. degree from
Cornell University Medical College, an M.B.A. degree from Columbia University, and a B.S. degree with honors in
Neuroscience from Brown University. Our Board believes that Dr. Schiff’s medical background and venture capital
experience qualify him to serve as a director of our company.
Corporate Governance
Code of Ethics
We have adopted the Aclaris Therapeutics, Inc. Code of Business Conduct and Ethics that applies to all officers,
directors and employees. The Code of Business Conduct and Ethics is available on our website at www.aclaristx.com. If
we make any substantive amendments to the Code of Business Conduct and Ethics or grant any waiver from a provision of
the Code of Business Conduct and Ethics to any executive officer or director, we will promptly disclose the nature of the
amendment or waiver on our website.
Audit Committee and Audit Committee Financial Expert
We have a separately designated standing Audit Committee established in accordance with Section 3(a)(58)(A) of
the Exchange Act. The Audit Committee is currently composed of three directors: Mr. Milano, Dr. Gowen and Mr.
Molineaux. Mr. Milano currently serves as the chair of the Audit Committee.
The Board reviews the Nasdaq listing standards definition of independence for Audit Committee members on an
annual basis and has determined that all members of the Company’s Audit Committee are independent (as independence is
currently defined in Rule 5605(c)(2)(A)(i) and (ii) of the Nasdaq listing standards and under Rule 10A-3 under the
Exchange Act).
The Board has also determined that Mr. Milano qualifies as an “audit committee financial expert,” as defined in
applicable SEC rules. The Board made a qualitative assessment of Mr. Milano’s level of knowledge and experience based

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on a number of factors, including his formal education and experience as both a chief executive officer and chief financial
officer for public reporting companies.
Insider Trading Policy and Prohibition on Hedging and Pledging
We have an Insider Trading Policy that is intended to ensure compliance with applicable securities laws and
regulations by our officers, directors, and employees. This policy prohibits, among other things, trading in our common
stock that would violate these laws and regulations, and it also imposes other restrictions such as trading blackout periods
and prior notification and/or pre-clearance requirements for trading intended to protect against inadvertent violations of
these laws and regulations. Pursuant to the policy, our company must also comply with applicable laws and regulations
relating to insider trading when engaging in transactions in our securities. This policy also prohibits directors, officers, and
other employees from engaging in short sales, transactions in put or call options, hedging transactions, margin accounts,
pledging or other inherently speculative transactions with respect to our stock at any time. The policy is filed as an exhibit
to this Annual Report.
Item 11. Executive Compensation
For the year ended December 31, 2024, our named executive officers (“NEOs”) were:
Name
Position
Neal Walker
Interim Chief Executive Officer(1)
Douglas Manion
Former Chief Executive Officer and President(2)
Hugh Davis
President and Chief Operating Officer(3)
Kevin Balthaser
Chief Financial Officer
(1)
Dr. Walker was appointed as our Interim Chief Executive Officer and President effective January 17, 2024, and
served as President until November 18, 2024. In February 2025, he was appointed as our Chief Executive Officer.
(2)
Dr. Manion stepped down as Chief Executive Officer and President and ceased employment with us effective January
16, 2024.
(3)
Dr. Davis joined our Company as President and Chief Operating Officer effective November 18, 2024.
Summary Compensation Table
The following table presents the compensation awarded to or earned by each of our NEOs for the years ended
December 31, 2024 and 2023.
Name and Principal Position
    
Year
Salary

($)
Bonus
Stock
Awards

($)(1)
Option
Awards

($)(1)
Non-Equity
Incentive Plan
Compensation

($)(2)
All Other
Compensation

($)
Total

($)
Neal Walker(3)
2024
477,431
 -
170,400
421,586
372,396
 3,322 (4)
1,445,135
Interim Chief Executive Officer
Douglas Manion(5)
2024
27,083
 -
 -
 -
 -
 828,998 (6)
856,081
Former Chief Executive Officer and
President
2023
600,000
 -
1,832,760
4,513,721
198,000
 13,200 (7)
7,157,681
Hugh Davis(8)
2024
62,500
 -
423,720
1,076,674
30,625
 1,666 (7)
1,595,185
President and Chief Operating Officer
Kevin Balthaser
2024
444,000
 -
247,800
179,003
217,560
 13,800 (7)
1,102,163
Chief Financial Officer
2023
444,000
 -
509,100
1,253,812
124,320
13,200 (7)
2,344,432
(1)
The amounts reflect the full grant date fair value for RSU and stock option awards granted during the indicated year.
The grant date fair value was computed in accordance with ASC Topic 718, Compensation—Stock Compensation.
The assumptions we used in valuing stock options and restricted stock unit awards are described in “Item 8—Notes
to Consolidated Financial Statements—Note 7”.

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(2)
The amounts reflect the portion of each officer’s target annual bonus paid based on the achievement of our corporate
and individual goals, as applicable, which for 2024 are discussed further below under “Narrative to Summary
Compensation Table—Annual Bonus (Non-Equity Incentive Plan Compensation).”
(3)
Dr. Walker’s employment with us commenced in January 2024.
(4)
The amount consists of fees paid under our director compensation policy for his service as our Chair of the Board
prior to Dr. Walker being appointed as our Interim Chief Executive Officer in January 2024.
(5)
Dr. Manion’s employment with us ended in January 2024.
(6)
The amount consists of (i) $3,115 in company matching contributions to Dr. Manion’s 401(k) plan account, (ii) the
following accrued payments in connection with his separation agreement entered into in February 2024: (a)
$600,000, representing 12 months’ base salary and (b) $198,000, representing 100% of his 2023 target bonus, and
(iii) $27,883, representing accrued but unused vacation time paid out upon termination of his employment.
(7)
The amount consists of company matching contributions to the executive’s 401(k) plan account.
(8)
Dr. Davis’s employment with us commenced in November 2024.
Narrative to Summary Compensation Table
In setting NEO compensation, we consider compensation for comparable positions in the market, the historical
compensation levels of our executives, individual performance as compared to our expectations and objectives, our desire
to motivate our employees to achieve short- and long-term results that are in the best interests of our stockholders and a
long-term commitment to our company. We do not target a specific competitive position or a specific mix of compensation
among base salary, bonus or long-term incentives; however, we do deliver a majority of compensation through long-term
incentives.
We review compensation annually for our NEOs, and in some cases more frequently as deemed appropriate. The
various roles that contribute to our decisions and actions each year are as follows:
The Compensation Committee. The Compensation Committee is responsible for establishing and overseeing our
executive compensation program. Our Compensation Committee typically reviews and discusses management’s proposed
compensation with the Chief Executive Officer for all executives other than the Chief Executive Officer. Based on those
discussions and its discretion, the Compensation Committee then recommends the compensation for each NEO. Our
Compensation Committee, without members of management present, discusses and ultimately approves the compensation
of our executive officers.
Role of our Chief Executive Officer and other Management Members. Our Chief Executive Officer evaluates and
reviews with the Compensation Committee the individual performance and contributions of each of the other NEOs and
makes recommendations to the Compensation Committee regarding base salary, and short- and long-term incentive awards.
The Compensation Committee reviews and considers such recommendations, but ultimately retains full discretion and
authority over the final compensation decisions for the NEOs. Our Chief Executive Officer also recommends the Company
performance objectives that are used to determine bonus amounts and consults with select members of management in the
development of the goals. The Compensation Committee may request that certain executives attend portions of
Compensation Committee meetings based on the topics being covered and their respective areas of expertise. NEO
compensation decisions are made in executive session without the respective NEOs present.
Role of our Independent Compensation Consultant. In 2024, the Compensation Committee retained Pearl Meyer,
a compensation consulting firm, to evaluate and make recommendations with respect to our executive compensation
program. Pearl Meyer’s role included assisting the Compensation Committee with the selection of a peer group of
companies for comparison purposes, an analysis of our existing executive compensation, the design of our long-term
incentive program, an analysis of our director compensation policy, sharing new developments in areas that fall within the
Compensation Committee’s jurisdiction, and otherwise advising the Compensation Committee as appropriate. The
consultant serves at the pleasure of the Compensation Committee, and the consultant’s fees are approved by the

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Compensation Committee.
Annual Base Salary
The following table presents the annual base salaries for each of our NEOs for 2023 and 2024:
    
Annual Base Salary 
    
    
($)
Percentage
Name
2023
    
2024
Change
Neal Walker
 —
 500,000  
n/a
Douglas Manion
 600,000
 600,000  
 — %  
Hugh Davis
 —
 500,000
n/a
Kevin Balthaser
 444,000  
 444,000  
 — %  

Annual Bonus (Non-Equity Incentive Plan Compensation)
We seek to motivate and reward our executives for achievements relative to our corporate goals and expectations
and individual goals, if any, for each fiscal year. For 2024, the target bonus for Dr. Walker was 60% of his base salary and
the target bonus for Dr. Davis and Mr. Balthaser was 40% of their respective base salaries.
The actual annual bonus paid is calculated by multiplying the NEO’s annual base salary, target bonus percentage,
the percentage attainment of the corporate goals established by the Board for such year, and for our NEOs other than the
Chief Executive Officer, the  percentage attainment of the individual goals established by our Chief Executive Officer.
Given his interim role, the Compensation Committee established individual objectives for Dr. Walker in 2024. The
Compensation Committee is not required to determine bonuses based on this exact formula and reserves the right to
consider other factors and adjust bonus amounts accordingly.
For 2024, the bonus funding factor was weighted 75% for corporate goals and 25% for individual goals for all
NEOs other than our Chief Executive Officer, whose bonus funding was 100% dependent on the achievement of individual
goals.
The Compensation Committee reviews our performance against our goals and approves the extent to which we
achieved each of our corporate goals and, with the input of our Chief Executive Officer, individual performance, as
applicable, and, for each NEO, the amount of the bonus awarded.
In early 2024, our Compensation Committee approved our 2024 corporate performance goals. These goals were
divided into two primary categories: (a) research and development, including advancement of our key assets, cost
rationalization, and business development, including financing objectives and strategic planning (90%), and (b) other
corporate activities, including legal, finance and compliance objectives (10%). In addition to the corporate performance
goals described above, Dr. Walker evaluated the individual performance of each of Dr. Davis and Mr. Balthaser, and
recommended a level of achievement to the Compensation Committee, and the Compensation Committee evaluated the
individual performance of Dr. Walker. The individual goals for Dr. Davis and Mr. Balthaser focused on contributions
toward our corporate objectives as well as the personal qualities necessary to effectively manage a team, solve problems
and drive our business forward. Dr. Walker recommended full credit for these individual objectives, which the
Compensation Committee approved. The individual goals for Dr. Walker focused on establishing and executing the
strategic direction of the Company, as well as securing a permanent Chief Executive Officer.
In early 2025, the Compensation Committee considered each of the 2024 corporate performance goals, as well as
individual goals where applicable, and awarded Dr. Walker, Dr. Davis and Mr. Balthaser 130%, 122.5% and 122.5% of
their target bonuses, respectively, for the year ended December 31, 2024. The actual bonus amounts paid are reflected in
the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table above.
Long-term Incentives
Long-term incentives represent a key element of our overall compensation program. This compensation element is
primarily used to aid in attracting and retaining the talent we need to achieve our mission, strategies, and underlying
corporate goals. Additionally, long-term incentives align the interests of our NEOs with our stockholders.

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The Compensation Committee typically approves long-term incentive grants for NEOs at the start of their
employment, and annually thereafter in connection with the annual performance review. Additionally, the Compensation
Committee may periodically grant additional equity awards based on changes in job responsibility, performance and
contribution, or other special circumstances.
In determining annual long-term incentive grants for NEOs, the Compensation Committee reviews market data for
annual long-term incentive grant levels and groups the NEOs accordingly. The market data that the Compensation
Committee reviewed for the purpose of sizing equity grants included long-term incentive awards expressed as a percentage
of shares of common stock outstanding, as well as grant date fair values.
As part of his employment as the Interim Chief Executive Officer, in February 2024 the Compensation Committee
awarded Dr. Walker options to purchase 497,000 shares of common stock with an exercise price of $1.20, and 142,000
RSUs, in each case which vest monthly over 15 months commencing March 1, 2024 subject to his continuous service as
the Interim Chief Executive Officer to the Company as of each such vesting date, provided that in the event he ceases to be
Interim Chief Executive Officer but continues to provide continuous service in any capacity, such awards will continue to
vest in the event that the Board determines in its sole discretion that he achieved the individual performance goals as
defined in his letter agreement of employment as Interim Chief Executive Officer prior to the cessation of his employment
as Interim Chief Executive Officer. In February 2024, for his annual long-term incentive award, the Compensation
Committee awarded Mr. Balthaser options to purchase 206,500 shares of common stock with an exercise price of $1.20,
and 59,000 RSUs, in each case which vest or have vested in four equal installments on February 1, 2025, February 1, 2026,
February 1, 2027 and February 1, 2028, subject to his continuous service as of the applicable vesting date. In addition, also
in February 2024, Mr. Balthaser received a special one-time retention equity grant of 147,500 RSUs, which vests or has
vested in two equal installments on December 31, 2024 and December 31, 2025, subject to his continuous service as of the
applicable vesting date. The retention program was designed to retain employees needed to support the Company following
the Company’s reduction in force and announcement of the strategic review of its business. As part of his employment as
the President and Chief Operating Officer, in December 2024 the Compensation Committee awarded Dr. Davis options to
purchase 375,000 shares of common stock with an exercise price of $3.96, and 107,000 RSUs, in each case which vest in
four equal installments on December 2, 2025, December 2, 2026, December 2, 2027 and December 2, 2028, subject to his
continuous service as of the applicable vesting date.
Severance Benefits
In February 2024, in connection with Dr. Manion’s departure from the Company, we entered into a separation
agreement, waiver and release with Dr. Manion pursuant to which we agreed to provide him the same severance benefits as
if he were terminated without cause under his employment agreement as described below under “Additional Narrative
Disclosure—Potential Payments upon Termination of Employment or upon Change in Control—Employment
Agreements.”
Clawback Policy
In October 2023, in order to comply with SEC rules promulgated under Section 10D-1 of the Exchange Act and
Nasdaq listing standards, the Compensation Committee adopted and recommended to the Board the Company’s Incentive
Compensation Recoupment Policy, which the Board adopted in November 2023. Under the Incentive Compensation
Recoupment Policy, in the event of an accounting restatement, the Compensation Committee, as the committee of the
Board responsible for administering the policy, is authorized to recover certain incentive-based compensation paid to an
executive officer of the Company on or after October 2, 2023 to the extent such incentive-based compensation was
erroneously paid on the basis of financial results in respect of any of our three most recently completed fiscal years
preceding the restatement.
Additionally, as a public company, if we are required to restate our financial results due to our material
noncompliance with any financial reporting requirements under the federal securities laws as a result of misconduct, the
Chief Executive Officer and Chief Financial Officer may be legally required to reimburse our Company for any bonus or
other incentive-based or equity-based compensation they receive in accordance with the provisions of section 304 of the
Sarbanes-Oxley Act of 2002.

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Outstanding Equity Awards as of December 31, 2024
The following table provides information about outstanding equity awards held by each of our NEOs as of
December 31, 2024. Dr. Manion did not have any outstanding equity awards as of December 31, 2024.
Option Awards
Stock Awards
Market
 
 
 
 
Number
Value
 
 
 
of Shares
of Shares
 
of Stock
of Stock
Number of Securities Underlying
Option
 
That
That
Type
 Unexercised Options
Exercise
Option
 
Have Not
Have Not
of
(#)
Price
Expiration  
Vested
Vested
Name
    
Award
    
Exercisable      Unexercisable     
($)
    
Date
    
(#)
    
($)(8)
Neal Walker
Option
 211,019
 —
 10.66
8/31/2025
Option
 137,335
 28.68
12/17/2025
Option
 145,600
 28.92
12/14/2026
Option
 151,200
 22.09
1/31/2028
Option
 255,552
 1.26
3/1/2030
Option
 191,850
 —
 24.06
2/28/2031
Option
 168,050
 —
 14.94
3/1/2032
Option
 331,333
 165,667 (1)
 1.20
1/31/2034
RSU
 47,334 (1)
 117,388
Hugh Davis
Option
 —
 375,000 (2)
 3.96
12/1/2034
RSU
 107,000 (2)
 265,360
Kevin Balthaser
Option
 11,200
 —
 27.54
7/4/2027
 
Option
 2,100
 —
 22.09
1/31/2028
 
Option
 11,625
 3,875 (3)
 24.06
2/28/2031
 
Option
 16,700
 16,700 (4)
 14.94
2/29/2032
 
Option
 26,250
 78,750 (5)
 16.97
1/31/2033
Option
 206,500 (6)
 1.20
1/31/2034
 
RSU
 
RSU
 1,100 (3)
 2,728
RSU
 4,750 (4)
 11,780
RSU
 22,500 (5)
 55,800
RSU
 59,000 (6)
 146,320
RSU
 73,750 (7)
 182,900
(1)
Of the unvested stock options and RSUs, 33,133 and 33,134 stock options vested on January 1, 2025 and February 1,
2025, respectively, and 9,467 RSUs vested on each of January 1, 2025 and February 1, 2025. The remainder will vest
in monthly installments through May 1, 2025, subject to the officer’s continued service through each applicable
vesting date.
(2)
These unvested stock options and RSUs will vest in four equal installments on December 2, 2025, December 2, 2026,
December 2, 2027 and December 2, 2028, subject to the officer’s continued service through each applicable vesting
date.
(3)
These unvested stock options and RSUs will vest on March 1, 2025, subject to the officer’s continued service through
the vesting date.
(4)
These unvested stock options and RSUs will vest in two equal installments on March 1, 2025 and March 1, 2026,
subject to the officer’s continued service through each appliable vesting date.
(5)
Of the unvested stock options and RSUs, one-fourth vested on February 1, 2025 and the remainder will vest in two
equal installments on February 1, 2026 and February 1, 2027, subject to the officer’s continued service through each
applicable vesting date.
(6)
Of the unvested stock options and RSUs, one-fourth vested on February 1, 2025 and the remainder will vest in three
equal installments on February 1, 2026, February 1, 2027 and February 1, 2028, subject to the officer’s continued
service through each applicable vesting date.
(7)
The remainder of the unvested RSUs will vest on December 31, 2025.

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(8)
Based on the closing price of our common stock of $2.48 per share on December 31, 2024.
Additional Narrative Disclosure
Potential Payments upon Termination of Employment or upon Change in Control
Employment Agreements
We have entered into employment agreements with each of Dr. Davis and Mr. Balthaser, and had entered into an
employment agreement with Dr. Manion prior to his departure in January 2024. We entered into a letter agreement with
Dr. Walker in connection with his appointment as our Interim Chief Executive Officer in January 2024 (which is
described below). In connection with his appointment as our Chief Executive Officer, we entered into an employment
agreement with Dr. Walker in February 2025. Under the employment agreements, each of them is (or, in the case of Dr.
Manion, was) eligible to receive severance benefits in the specified circumstances, as applicable.
Severance Upon Qualifying Termination Unrelated to a Change of Control
Each employment agreement provides for payments in the event the executive’s employment is terminated due to
death or “Disability”, in the event we terminate the executive’s employment “Without Cause,” if the executive resigns for
“Good Reason” (each as defined below), or if the executive’s employment is terminated upon non-renewal of the
agreement by the Company, provided that the executive executes and does not revoke a release of claims (each, a
“Qualifying Termination”).
In the event of a Qualifying Termination, each executive would receive the following severance benefits:
●
continued payment of then-current base salary for a period of 12 months following termination, in each
case payable in accordance with our normal payroll practices;
●
a lump-sum payment of any approved but unpaid bonuses or portion thereof for the preceding year or the
year of termination for Dr. Davis, Mr. Balthaser and Dr. Manion, and payment of any bonuses for the
preceding year for which he remains employed through the last day of such year for Dr. Walker; and
●
a direct payment by the Company to the applicable healthcare provider of the Company’s portion of the
medical, vision and dental coverage premiums to maintain any COBRA coverage for which he or she is
eligible and has appropriately elected for a period of 12 months following termination.
Severance Upon Qualifying Termination Related to a Change of Control
In the event of a Qualifying Termination (other than if the executive’s employment is terminated upon non-
renewal by the Company) on or within three months prior to, or within 12 months following, a “Change of Control” (as
defined below), each executive would receive the following severance benefits:
●
continued payment of then-current base salary for a period of 18 months following termination for Dr.
Manion and Dr. Walker and for a period of 12 months following termination for each of the other NEOs,
payable in accordance with our normal payroll practices;
●
a lump-sum payment of any approved but unpaid bonuses or portion thereof for the preceding year or the
year of termination for Dr. Davis, Mr. Balthaser and Dr. Manion, and payment of any bonuses for the
preceding year for which he remains employed through the last day of such year for Dr. Walker;
●
an additional lump sum payment equal to 150% of the target bonus for Dr. Manion and Dr. Walker and
100% of the target bonus for each of the other NEOs;
●
a direct payment by the Company to the applicable healthcare provider of the Company’s portion of the
medical, vision and dental coverage premiums to maintain any COBRA coverage for which he is
eligible

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and has appropriately elected for a period of 18 months following termination for Dr. Manion and Dr.
Walker and for a period of 12 months following termination for each of the other NEOs; and
●
if the termination occurs on or within three months prior to the Change of Control, all of his unvested
stock options and other equity awards outstanding on the effective date of termination would become
fully vested on the effective date of the Change of Control, or if the termination occurs within 12 months
following the effective date of the Change of Control (provided that any surviving corporation or
acquiring corporation assumes his stock options or other equity awards, as applicable, or substitutes
similar stock options or equity awards for his stock options or equity awards, as applicable, in
accordance with the terms of the applicable equity incentive plans), all unvested stock options and other
equity awards outstanding on the effective date of termination would become fully vested on the date of
termination.
Definitions
With respect to each of our NEOs, the following definitions were adopted in their employment agreements:
●
“Cause” means: (i) his conviction of, or guilty plea to, a felony, other than traffic violations; (ii) any act
or omission by him or her which constitutes gross negligence or a material breach of his duty of loyalty;
(iii) any material breach by him or her of our personnel policies; (iv) refusal to follow or implement a
clear and reasonable directive; (v) breach of fiduciary duty; or (vi) a material violation or breach by him
or her of his employment agreement, other than an event described in the foregoing clauses, or any other
agreement with us;
●
“Good Reason” means, in the absence of events that would support a termination for cause: (i) there is a
material failure by us or our successor to pay his salary or additional compensation or benefits in
accordance with the employment agreement; (ii) his annual base salary is materially decreased without
his prior written consent; (iii) he or she is assigned duties materially inconsistent with his title and the
responsibilities set forth in his job description without his prior written consent; (iv) his place of
employment is changed to a location that is greater than 50 miles from his current place of employment
(disregarding for this purpose any remote work arrangements); or (v) any other material violation or
breach by us of his employment agreement; provided, however, none of the above events will constitute
good reason absent him or her providing us with proper notice and our failure to cure such event within
30 days of such notice; and
●
“Change of Control” means: (i) our consolidation or merger with or into any other corporation or other
entity or person, or any other corporate reorganization, in which our stockholders immediately prior to
such consolidation, merger or reorganization own, in the aggregate, less than 50% of the surviving
entity’s voting power or outstanding capital stock immediately after such consolidation, merger or
reorganization, or any transaction or series of related transactions to which we, or any of our
stockholders is a party in which greater than 50% of our voting power or outstanding capital stock is
transferred, or pursuant to which any person or group of affiliated persons obtains greater than 50% of
our voting power or outstanding capital stock, excluding any consolidation or merger effected
exclusively to change our domicile; or (ii) any sale, license or other disposition, including through a
division or spin-off transaction, of all or substantially all of our assets or any of our subsidiaries’ assets
or any sale, exclusive license or other disposition of all or substantially all of our intellectual property;
provided, however that neither of the following constitutes a change of control: (A) transfers of capital
stock by an existing stockholder as a result of death or otherwise for estate planning purposes or to such
stockholder’s affiliates or to any of our other existing stockholders; or (B) issuances of our equity
securities in connection with financings for working capital and other general corporate purposes; and,
provided further, that such “Change of Control” qualifies as either a change in ownership of the
Company as defined in Section 409A of the Code (“Section 409A”) or a change in the ownership of a
substantial portion of our assets as defined in Section 409A, as the case may be.

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Letter Agreement with Dr. Walker
In January 2024, in connection with his appointment as Interim Chief Executive Officer, we entered into a letter
agreement with Dr. Walker setting forth the terms of his employment. As described above under “Narrative to Summary
Compensation Table—Long-Term Incentives”, Dr. Walker was granted equity awards in connection with his appointment.
The equity awards will accelerate vesting and exercisability in full upon a Change in Control (as defined in the Company’s
2015 Equity Incentive Plan (“2015 Plan”)).
Separation Agreement with Dr. Manion
As described above, in January 2024, Dr. Manion departed the Company following which we entered into a
separation agreement, waiver and release with Dr. Manion pursuant to which we agreed to provide him the same
severance benefits as if he were terminated without cause unrelated to a Change of Control under his employment
agreement.
Benefits
We maintain a tax-qualified retirement plan (our 401(k) plan) that provides eligible U.S. employees with an
opportunity to save for retirement on a tax advantaged basis, up to limits prescribed by applicable law. Currently, we match
each eligible employee’s contributions up to 4% of total eligible compensation. Employees are immediately and fully
vested in their contributions and our matching contribution.
Our NEOs are eligible to participate in all benefit plans offered to our employees, including our medical, dental,
vision, group life and disability insurance plans. Our NEOs accrue more vacation time each pay period than other
employees. We do not otherwise provide perquisites or personal benefits to our NEOs.
Non-Employee Director Compensation
Under our non-employee director compensation policy, we pay each of our non-employee directors a cash retainer
for service on the Board and for service on each committee of which the director is a member. The policy applies to each of
our directors who is not an employee of our company. During 2024, Dr. Manion and Dr. Davis, as employees of our
Company, did not receive any additional compensation for service as a director. Effective January 17, 2024, Dr. Walker
was appointed as our Interim Chief Executive Officer and stopped receiving additional compensation for service as a
director.
Pursuant to the policy in effect for 2024, each non-employee director received an annual cash retainer of $40,000
for serving on our Board. The Chair of the Board received an additional annual cash retainer of $30,000 and the Lead
Independent Director received an additional annual cash retainer of $25,000. The members of each of the Audit,
Compensation, Nominating and Corporate Governance and Research and Development Committees received additional
retainers for such service, as did the Chair of each such committee (in addition to the member retainers), as follows:
    
Additional
Member
Chair
 
Annual Service
Annual Service
 
Retainer
Retainer
Committee
($)
($)
Audit Committee
 7,500
 12,500
Compensation Committee
 7,500
 12,500
Nominating and Corporate Governance Committee
 4,500
 4,500
Research and Development Committee(1)
 6,000
 8,000
(1)
Effective December 31, 2024, the Research and Development Committee was dissolved.
All annual cash compensation amounts were payable in equal quarterly installments in arrears, on the last day of
each fiscal quarter for which the service occurred, prorated based on the days served in the applicable fiscal quarter.

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125
We also reimbursed our non-employee directors for reasonable travel and out-of-pocket expenses incurred in
connection with attending our Board and committee meetings.
Each new non-employee director who joins our Board will be granted awards under our 2015 Plan with an
aggregate grant date fair value (as calculated for financial reporting purposes) equal to the lesser of (a) $320,000 or (b) the
fair value of 22,500 stock options measured as of the date the director joins the Board. Once the aggregate fair value of the
new director award has been determined, the new director will be granted a stock option having a grant date fair value
equal to 70% of such amount and RSUs having a grant date fair value equal to 30% of such amount.
On the date of each annual meeting of our stockholders, each non-employee director who continues to serve as a
director of our company following the meeting will be granted awards under our 2015 Plan with an aggregate grant date
fair value (as calculated for financial reporting purposes) equal to the lesser of (a) $320,000 or (b) the fair value of 22,500
stock options measured as of the annual meeting date. Once the aggregate fair value of the continuing director award has
been determined, the continuing director will be granted a stock option having a grant date fair value equal to 70% of such
amount and RSUs having a grant date fair value equal to 30% of such amount. In no event, however, shall the fair value of
the annual award, together with the fair value of any initial award granted to a new director who joined the Board in the
same fiscal year, exceed $320,000 in the aggregate.
The shares subject to each stock option granted will vest in equal monthly installments over 12 months and the
RSUs will vest in one installment on the first anniversary of the grant date, subject to continued service through the
applicable vesting date. The exercise price per share of each stock option will be equal to the closing price of our common
stock on the date of the option grant. Each such stock option will have a term of ten years from the date of grant, subject to
earlier termination in connection with a termination of the non-employee director’s continuous service with us.
On June 6, 2024, the date of our 2024 annual meeting of stockholders, each non-employee director then serving
on our Board (other than Dr. Walker) who continued to serve as a director of our company following the meeting was
granted a stock option to purchase 15,750 shares of common stock and 4,793 RSUs under our 2015 Plan. These awards are
reflected in the table below.
Director Compensation Table
The following table shows the compensation earned by each of our non-employee directors for 2024. During
2024, Dr. Manion and Dr. Davis, as employees of our Company, did not receive any additional compensation for service as
a director. Effective January 17, 2024, Dr. Walker was appointed as our Interim Chief Executive Officer and stopped
receiving additional compensation for service as a director. Dr. Manion’s, Dr. Davis’ and Dr. Walker’s compensation as an
executive officer is set forth above under “Summary Compensation Table.”
    Fees Earned or Paid    
    
    
in Cash
Stock Awards
Option
Awards
Total
Name
 
($)
($)(1)(2)(3)
($)(1)(2)(4)
($)
William Humphries
 
50,125
4,937
11,505
66,567
Anand Mehra, M.D.
 
70,875
4,937
11,505
87,317
Christopher Molineaux
 
79,625
4,937
11,505
96,067
Andrew Powell(5)
 
20,363
 —
 —
20,363
Bryan Reasons(6)
 
22,363
 —
 —
22,363
Andrew Schiff, M.D.
 
47,875
4,937
11,505
64,317
Maxine Gowen, Ph.D.
 
54,000
4,937
11,505
70,442
Vincent Milano
 
56,875
4,937
11,505
73,317
(1)
Reflects the aggregate grant date fair value for awards granted for the fiscal year ended December 31, 2024
calculated in accordance with FASB ASC Topic 718. For a discussion of valuation assumptions, see “Item 8—Notes
to Consolidated Financial Statements—Note 7.” Our directors will not realize the estimated value of these awards
until the awards are vested, exercised and/or sold, as applicable.
(2)
As of December 31, 2024, our non-employee directors held the following number of stock options and RSUs: Mr.
Humphries, 94,125 stock options and 4,793 RSUs; Dr. Mehra, 76,125 stock options and 4,793 RSUs; Mr. Molineaux,

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84,401 stock options and 4,793 RSUs; Dr. Schiff, 92,125 stock options and 4,793 RSUs; Dr. Gowen, 84,125 stock
options and 4,793 RSUs; and Mr. Milano, 90,125 stock options and 4,793 RSUs.
(3)
Consists of 4,793 RSUs granted on June 6, 2024. The RSUs will vest on June 6, 2025, subject to continuous service
with us through that date.
(4)
Consists of an option granted on June 6, 2024 to purchase 15,750 shares at an exercise price of $1.03 per share. This
option vests in 12 equal monthly installments through June 6, 2025, subject to continuous service with us through
each vesting date.
(5)
Mr. Powell resigned effective as of the 2024 annual meeting and therefore did not receive an annual equity award.
(6)
Mr. Reasons did not stand for re-election at the 2024 annual meeting when his term expired and therefore did not
receive an annual equity award.
Policies and Practices Related to the Grant of Certain Equity Awards Close in Time to the Release of Material
Nonpublic Information
From time to time, we grant equity awards, including stock options, to our employees, including our NEOs.  Our
typical practice is to grant employee stock options on the first business day of the month following the month in which the
options are approved (or on the same day of approval if such approval is on the first business day of a month). We typically
grant annual refresh employee option grants in the first quarter of each fiscal year, which refresh grants are typically
approved at a regularly scheduled meeting of the Compensation Committee occurring in such quarter.  In addition, non-
employee directors receive automatic grants of initial and annual stock option awards, at the time of a director’s initial
appointment or election to the board and at the time of each annual meeting of our stockholders, respectively, pursuant to
our non-employee director compensation policy, as further described under the heading, “Non-Employee Director
Compensation”. We do not otherwise maintain any written policies on the timing of awards of stock options, stock
appreciation rights, or similar instruments with option-like features. The Compensation Committee considers whether there
is any material nonpublic information (“MNPI”) about our company when determining the timing of stock option grants
and it does not seek to time the award of stock options in relation to the Company’s public disclosure of MNPI. We have
not timed the release of MNPI for the purpose of affecting the value of executive compensation.
The following table is being provided pursuant to Item 402(x)(2) of Regulation S-K.
Name

(a)
    
Grant date

(b)
    
Number of

securities

underlying the

award

(c)
    
Exercise price of the

award ($/Sh)

(d)
    
Grant date fair

value of the

award

(e)
    
Percentage change in the

closing market price of the

securities underlying the

award between the trading

day ending immediately prior

to the disclosure of material

nonpublic information and the

trading day beginning

immediately following the

disclosure of material

nonpublic information

(f)(1)
 
Neal Walker
February 1, 2024
497,000
$
1.20
$
421,586
(5.8)%
Kevin Balthaser
February 1, 2024
206,500
$
1.20
$
179,003
(5.8)%
(1) The option grants reported in this table were made two business days before the Company filed (i) a Form 8-K under
Item 5.02 reporting the departure of our Chief Medical Officer, the entry into an amended and restated employment
agreement with our Chief Scientific Officer, and the entry into a separation agreement with our former Chief
Executive Officer and President following his previously reported departure and (ii) a Form 8-K amendment under
Item 5.02 reporting the entry into a compensatory letter agreement with Dr. Walker following his previously reported
appointment as our Interim Chief Executive Officer.

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127
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information regarding the ownership of our common stock as of February
10, 2025 by: (i) each director; (ii) each of our NEOs; (iii) all currently serving executive officers and directors as a group;
and (iv) all those known by us to be beneficial owners of more than five percent of our common stock.
     Number of       Percent of 
 
Shares 
Shares 
 
Beneficially 
Beneficially   
Beneficial Owner(1)
 
Owned
 
Owned
5% Stockholders:
 
   
  
BML Investment Partners, L.P.(2)
 
14,250,000  
13.2 %
Biosion, Inc.(3)
 
11,281,985  
10.4
Adage Capital Management, L.P. (4)
9,627,304
8.9
Entities associated with Vivo Capital LLC(5)
 
8,888,888
8.2
Rock Springs Capital Management LP(6)
 
6,761,861  
6.3
Named Executive Officers and Directors:
 
   
  
Neal Walker(7)
3,204,123
2.9
Douglas Manion(8)
 
41,813  
*
Hugh Davis
—
—
Kevin Balthaser(9)
 
251,310  
*
William Humphries(10)
 
128,107  
*
Christopher Molineaux(11)
 
142,814  
*
Anand Mehra(12)
 
791,405  
*
Andrew Schiff(13)
 
540,997  
*
Maxine Gowen(14)
 
106,336  
*
Vincent Milano(15)
 
107,898  
*
All current directors and executive officers as a group (11 persons)(16)
 
6,179,434  
5.6
*
Less than one percent.
(1) This table is based upon information supplied by officers, directors and principal stockholders and a review of
Schedule 13G, Schedule 13D and Section 16 filings with the SEC. Unless otherwise indicated in the footnotes to this
table and subject to community property laws where applicable, we believe that each of the stockholders named in this
table has sole voting and investment power with respect to the shares indicated as beneficially owned.
Applicable percentages are based on 108,148,298 shares outstanding on February 10, 2025, adjusted as required by
rules  promulgated by the SEC. Except as otherwise noted below, the principal business address of each of the
executive officers and directors is c/o Aclaris Therapeutics,  Inc., 701 Lee Road, Suite  103, Wayne, Pennsylvania
19087.
(2) This information has been obtained from a Schedule 13G/A filed on February 13, 2025 by BML Investment Partners,
L.P. (“BML”). The shares reported are held by BML. Braden M. Leonard is the managing member of BML Capital
Management, LLC, the sole general partner of BML, and as a result, Mr. Leonard is deemed to be the indirect
beneficial owner of the shares held directly by BML. The principal business address of BML is 65 E Cedar, Suite 2,
Zionsville, IN 46077.
(3) This information has been obtained from a Schedule 13G filed on November 25, 2024 by Biosion. The number
represents 11,281,985 shares of common stock issuable to Biosion upon exercise of a warrant held by it. The principal
business address of Biosion is 5th Floor, Building D, 3-1 Zhongdan Unit, South Longshan Rd, Jiangbei New District,
Nanjing, Jiangsu, China.
(4) This information has been obtained from a Schedule 13G filed on February 12, 2025 by Adage Capital
Management, L.P. (“ACM”), Robert Atchinson, and Phillip Gross, which states that the shares are directly held
by Adage Capital Partners, L.P. (“ACP”), of which ACM is the investment manager. Mr. Atchinson is (a)

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managing member of Adage Capital Advisors, L.L.C. (“ACA”), the managing member of Adage Capital Partners
GP, L.L.C., (“ACPGP”), the general partner of ACP and (b) managing member of Adage Capital Partners LLC,
(“ACPLLC”), general partner of ACM. Mr. Gross is (a) managing member of ACA, managing member of
ACPGP and (b) managing member of ACPLLC. The principal business address of this entity and persons is 200
Clarendon Street, 52nd Floor, Boston, Massachusetts 02116.
(5) This information has been obtained from a Schedule 13G filed on November 21, 2024 by Vivo Opportunity Fund
Holdings, L.P. (“Opportunity Fund”), Vivo Opportunity, LLC, Vivo Asia Opportunity Fund Holdings, L.P. (“Asia
Opportunity Fund”), and Vivo Opportunity Cayman, LLC. Consists of (a) 7,955,160 shares of common stock
held by Opportunity Fund and (b)  933,728 shares of common stock held by Asia Opportunity Fund. Vivo
Opportunity, LLC is the general partner of Opportunity Fund. Vivo Opportunity Cayman, LLC is the general
partner of Asia Opportunity Fund. The voting members of each of Vivo Opportunity, LLC and Vivo Opportunity
Cayman, LLC are Kevin Dai, Gaurav Aggarwal, Frank Kung and Shan Fu, none of whom has individual voting
or investment power with respect to the shares held by Opportunity Fund or Asia Opportunity Fund. The
principal business address of these entities and persons is 192 Lytton Avenue, Palo Alto, California 94301.
(6) This information has been obtained from a Schedule 13G filed on November 22, 2024 by Rock Springs Capital
Management LP, Rock Springs Capital LLC, its general partner, and Rock Springs Capital Master Fund LP, which
states that 5,697,000 shares are held directly by Rock Springs Capital Master Fund LP and 1,064,861 shares are held
directly by Four Pines Master Fund LP. Rock Springs Capital Management LP serves as the investment manager to
each of Rock Springs Capital Master Fund LP and Four Pines Master Fund LP. The principal business address of Rock
Springs Capital Management LP and Rock Springs Capital LLC is 650 South Exeter St., Suite 1070, Baltimore, MD
21202. The principal business address of Rock Springs Capital Master Fund is c/o Walkers Corporate Limited, 190
Elgin Avenue, George Town, Grand Cayman, KY1-9008, Cayman Islands.
(7) Consists of (a) 1,460,718 shares of common stock, (b) 1,724,472 shares of common stock underlying options that are
exercisable within 60 days of February 10, 2025 and (c) 18,933 shares of common stock underlying RSUs that will
vest within 60 days of February 10, 2025.
(8) Consists of 41,813 shares of common stock.
(9) Consists of (a)  89,860 shares of common stock, (b)  157,975 shares of common stock underlying options that are
exercisable within 60 days of February 10, 2025 and (c) 3,475 shares of common stock underlying RSUs that will vest
within 60 days of February 10, 2025.
(10)Consists of (a) 28,732 shares of common stock and (b) 99,375 shares of common stock underlying options that are
exercisable within 60 days of February 10, 2025.
(11) Consists of (a) 53,163 shares of common stock and (b) 89,651 shares of common stock underlying options that are
exercisable within 60 days of February 10, 2025.
(12)Consists of (a) 710,030 shares of common stock and (b) 81,375 shares of common stock underlying options that are
exercisable within 60 days of February 10, 2025.
(13)Consists of (a) 434,455 shares of common stock owned directly by Aisling Capital IV, LP (“Aisling”), (b) 9,167 shares
of common stock owned directly by Dr. Schiff and (c) 97,375 shares of common stock underlying options held directly
by Dr. Schiff that are exercisable within 60 days of February 10, 2025. The shares owned directly by Aisling are held
indirectly by Aisling Capital Partners IV, LP (“Aisling GP”), as general partner of Aisling, Aisling Capital Partners IV,
LLC (“Aisling Partners”), as general partner of Aisling GP, and each of the individual managing members of Aisling
Partners. Dr. Schiff is one of the managing members of Aisling Partners and shares voting and dispositive power over
the shares directly held by Aisling.
(14)Consists of (a) 16,961 shares of common stock and (b) 89,375 shares of common stock underlying options that are
exercisable within 60 days of February 10, 2025.

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(15)Consists of (a) 12,523 shares of common stock and (b) 95,375 shares of common stock underlying options that are
exercisable within 60 days of February 10, 2025.
(16)Consists of (a) 3,151,103 shares of common stock, (b) 2,944,998 shares of common stock underlying options that are
exercisable within 60 days of February 10, 2025 and (c) 83,333 shares of common stock underlying RSUs that will
vest within 60 days of February 10, 2025.
Securities Authorized for Issuance Under Equity Compensation Plans
The following table provides certain information regarding our equity compensation plans in effect as of
December 31, 2024:
    
     
     
Number of securities
 
   
 
remaining available for
 
   
Weighted-average  
future issuance under
 
Number of securities to   
exercise
 
equity compensation
 
be issued upon exercise    price of outstanding 
plans
of outstanding options,    
options,
 
(excluding securities
warrants and rights
warrants and rights 
reflected in column (a))
Plan Category
(a)
(b)
 
(c)
Equity compensation plans approved by
security holders:
2012 Equity Compensation Plan(1)
 
 218,404   $
 10.66  
—
2015 Equity Incentive Plan
 
 7,644,714   $
 8.09 (2)  
 4,820,283 (3)
Equity compensation plans not approved by
security holders:
2017 Inducement Plan(4) 
 
 329,000   $
 24.61
 —
2024 Inducement Plan(5) 
 806,000
 3.08 (6)  
 1,194,000
Total
 
 8,998,118
 
 6,014,283
(1)
No additional further options or awards may be granted under the 2012 Equity Compensation Plan.
(2)
Weighted average exercise price for the 2015 Plan gives effect to outstanding restricted stock units, which have no
exercise price. Excluding the restricted stock units, the weighted average exercise price would be $11.15 per share.
(3)
On January 1 of each year ended with January 1, 2025, the number of shares reserved under the 2015 Plan
automatically increased by 4% of the total number of shares of common stock that were outstanding at that time, or a
lesser number of shares as determined by our Board. Pursuant to the terms of the 2015 Plan, an additional 4,314,004
shares were added to the number of available shares reflected in the table effective January 1, 2025.
(4)
Our Board adopted the 2017 Inducement Plan, which is a non-stockholder approved stock plan adopted pursuant to
the “inducement exception” provided under Nasdaq listing rules. All shares of common stock that were eligible for
issuance under the 2017 Inducement Plan after October 1, 2018, including any shares underlying any awards that
expire or are otherwise terminated, reacquired to satisfy tax withholding obligations, settled in cash or repurchased by
the Company in the future that would have been eligible for re-issuance under the 2017 Inducement Plan, were
retired. No additional further options or awards may be granted under the 2017 Inducement Plan; all outstanding
stock awards will continue to be governed by their existing terms.
(5)
For a description of the material terms of this plan, see “Item 8—Notes to Consolidated Financial Statements—Note
7—2024 Inducement Plan.”
(6)
Weighted average exercise price for the 2024 Inducement Plan gives effect to outstanding RSUs, which have no
exercise price. Excluding the RSUs, the weighted average exercise price would be $3.96 per share.

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Item 13. Certain Relationships and Related Transactions, and Director Independence
Related Person Transactions Policy and Procedures
We have adopted a related person transactions policy that sets forth our procedures for the identification, review,
consideration and approval or ratification of related person transactions. For purposes of our policy only, a related person
transaction is a transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships,
in which we and any related person are, were or will be participants in which the amount involved exceeds $120,000.
Transactions involving compensation for services provided to us as an employee, consultant or director are not covered by
this policy. A related person is any executive officer, director or beneficial owner of more than 5% of any class of our
voting securities, including any of their immediate family members, and any entity owned or controlled by such persons.
Under the policy, if a transaction has been identified as a related person transaction, including any transaction that
was not a related person transaction when originally consummated or any transaction that was not initially identified as a
related person transaction prior to consummation, our management must present information regarding the related person
transaction to our Audit Committee, or, if Audit Committee approval would be inappropriate, to another independent body
of our Board, for review, consideration and approval or ratification. The presentation must include a description of, among
other things, the material facts, the interests, direct and indirect, of the related persons, the benefits to us of the transaction
and whether the transaction is on terms that are comparable to the terms available to or from as the case may be, an
unrelated third party or to or from employees generally. Under the policy, we collect information that we deem reasonably
necessary from each director, executive officer and, to the extent feasible, significant stockholder to enable us to identify
any existing or potential related person transactions and to effectuate the terms of the policy. In addition, under our Code of
Business Conduct and Ethics, our employees and directors have an affirmative responsibility to disclose any potential
conflicts of interest. In considering related person transactions, our Audit Committee, or other independent body of our
Board, takes into account the relevant available facts and circumstances including, but not limited to:
●
the risks, costs and benefits to us;
●
the impact on a director’s independence in the event that the related person is a director, immediate
family member of a director or an entity with which a director is affiliated;
●
the terms of the transaction;
●
the availability of other sources for comparable services or products; and
●
the terms available to or from, as the case may be, unrelated third parties or to or from employees
generally.
The policy requires that, in determining whether to approve, ratify or reject a related person transaction, our Audit
Committee, or other independent body of our Board, must consider, in light of known circumstances, whether the
transaction is in, or is not inconsistent with, our best interests and those of our stockholders, as our Audit Committee, or
other independent body of our Board, determines in the good faith exercise of its discretion.
Certain Related Person Transactions
Except as described below, there have been no transactions since January  1, 2023 to which we have been a
participant in which the amount involved exceeded or will exceed the lesser of (1) $120,000 or (2) 1% of the average of
our total assets for the last two completed fiscal years, and in which any of our directors, executive officers or holders of
more than 5% of our capital stock, or any members of their immediate family, had or will have a direct or indirect material
interest, other than compensation arrangements which are described under “Executive Compensation” and “Non-Employee
Director Compensation.”

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131
Participation in Private Placement
In November 2024, Anand Mehra, a member of our Board, purchased 666,666 shares of our common stock at a
price per share of $2.25 in connection with a private placement for an aggregate purchase price of $1.5 million.
Indemnification Agreements
In addition to the compensation arrangements with our directors and executive officers, we have entered into
indemnity agreements with each of them which provide, among other things, that we will indemnify such officer or
director, under the circumstances and to the extent provided for therein, for expenses, damages, judgments, fines and
settlements he or she may be required to pay in actions or proceedings which he or she is or may be made a party by reason
of his or her position as our director, officer or other agent, and otherwise to the fullest extent permitted under Delaware
law and our bylaws.
Director Independence
As required under the Nasdaq Stock Market (“Nasdaq”) listing standards, a majority of the members of a listed
company’s board of directors must qualify as “independent,” as affirmatively determined by the Board. The Board consults
with the Company’s counsel to ensure that the Board’s determinations are consistent with relevant securities and other laws
and regulations regarding the definition of “independent,” including those set forth in pertinent listing standards of Nasdaq,
as in effect from time to time.
Consistent with these considerations, after review of all relevant identified transactions or relationships between
each director, or any of his or her family members, and our company, senior management and independent auditors, the
Board has affirmatively determined that six of our eight current directors are independent directors within the meaning of
the applicable Nasdaq listing standards: Mr. Humphries, Dr. Mehra, Mr. Molineaux, Dr. Schiff, Dr. Gowen and Mr. Milano.
In addition, the Board also affirmatively determined that Andrew Powell and Byran Reasons, who served on the Board
during a part of 2024, were also independent directors within the meaning of the applicable Nasdaq listing standards. In
making these determinations, the Board found that none of these directors had a material or other disqualifying relationship
with our company. Dr. Walker, as our Chief Executive Officer, and Dr. Davis, as our President and Chief Operating Officer,
are not independent as a result of their employment by our company.
Item 14. Principal Accountant Fees and Services
The following table represents aggregate fees billed to us for the fiscal years ended December 31, 2024 and 2023
by PricewaterhouseCoopers LLP, our principal accountant.
     Fiscal Year Ended December 31,
 
2024
 
2023
Audit Fees
$
507,000
$
 841,120
All audit fees were pre-approved by the Audit Committee.
Pre-Approval Policies and Procedures
The Audit Committee has adopted a policy and procedures for the pre-approval of audit and non-audit services
rendered by our independent registered public accounting firm, PricewaterhouseCoopers LLP. The policy generally pre-
approves specified services in the defined categories of audit services, audit-related services and tax services up to
specified amounts. Pre-approval may also be given as part of the Audit Committee’s approval of the scope of the
engagement of the independent auditor or on an individual, explicit, case-by-case basis before the independent auditor is
engaged to provide each service. The pre-approval of services may be delegated to one or more of the Audit Committee’s
members, but the decision must be reported to the full Audit Committee at its next scheduled meeting.

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132
PART IV
Item 15. Exhibits and Financial Statement Schedules
(a)    The following documents are filed as part of this report:
(1)    Financial Statements
Our consolidated financial statements are listed in the “Index to Consolidated Financial Statements”
under Part II. Item 8 of this Annual Report on Form 10-K.
(2)    Financial Statement Schedules
Financial statement schedules have been omitted in this report because they are not applicable, not
required under the instructions, or the information required is set forth in the consolidated financial
statements or related notes thereto.
(3)    Exhibits
See exhibits listed under part (b) below.
(b)    Exhibits
Exhibit
Number
   
Description of Document
2.1#
Agreement and Plan of Merger, dated as of August 3, 2017, by and among the Registrant, Aclaris Life
Sciences, Inc., Confluence Life Sciences, Inc. and Fortis Advisors LLC (incorporated by reference to Exhibit
2.1 to the Registrant’s Quarterly Report on Form 10-Q (File No. 001-37581), filed with the SEC on
November 7, 2017).
3.1
Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference to
Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 001-37581), filed with the SEC on
October 13, 2015).
3.2
Certificate of Amendment to Amended and Restated Certificate of Incorporation of the Registrant
(incorporated herein by reference to Exhibit 3.2 to the Registrant’s Quarterly Report on Form 10-Q (File No.
001-37581), filed with the SEC on August 7, 2023).
3.3
Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s
Current Report on Form 8-K (File No. 001-37581), filed with the SEC on June 24, 2020).
4.1
Description of Securities. (incorporated by reference to Exhibit 4.1 to the Registrant’s Annual Report on
Form 10-K (File No. 001-37581), filed with the SEC on February 27, 2024).
10.1+
Amended and Restated 2012 Equity Compensation Plan (incorporated by reference to Exhibit 10.7 to
Amendment No. 1 to the Registrant’s Registration Statement on Form S-1 (File No. 333-206437), filed with
the SEC on September 4, 2015).
10.2+
Form of Stock Option Grant under Amended and Restated 2012 Equity Compensation Plan (incorporated by
reference to Exhibit 10.8 to the Registrant’s Registration Statement on Form S-1 (File No. 333-206437), filed
with the SEC on August 17, 2015).
10.3+
2015 Equity Incentive Plan (incorporated by reference to Exhibit 4.6 to the Registrant’s Registration
Statement on Form S-8 (File No. 333-207434), filed with the SEC on October 15, 2015).
10.4+
Form of Stock Option Grant Notice and Stock Option Agreement under 2015 Equity Incentive Plan
(incorporated by reference to Exhibit 10.10 to Amendment No. 2 to the Registrant’s Registration Statement
on Form S-1 (File No. 333-206437), filed with the SEC on September 25, 2015).
10.5+
Form of Restricted Stock Unit Grant Notice and Restricted Stock Unit Award Agreement under 2015 Equity
Incentive Plan (incorporated by reference to Exhibit 10.11 to Amendment No. 2 to the Registrant’s
Registration Statement on Form S-1 (File No. 333-206437), filed with the SEC on September 25, 2015).
10.6+
Form of Performance Stock Option Grant Notice and Stock Option Agreement used in connection with the
2015 Equity Incentive Plan (incorporated by reference to Exhibit 10.11 to the Registrant’s Annual Report on
Form 10-K (File No. 001-37581), filed with the SEC on March 18, 2019).

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133
10.7+
Form of Performance Restricted Stock Unit Grant Notice and Restricted Stock Unit Award Agreement used
in connection with the 2015 Equity Incentive Plan (incorporated by reference to Exhibit 10.12 to the
Registrant’s Annual Report on Form 10-K (File No. 001-37581), filed with the SEC on March 18, 2019).
10.8+
2017 Inducement Plan (incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on
Form 8-K (File No. 001-37581), filed with the SEC on August 1, 2017).
10.9+
Form of Stock Option Grant Notice and Stock Option Agreement used in connection with the 2017
Inducement Plan (incorporated herein by reference to Exhibit 10.2 to the Registrant’s Current Report on
Form 8-K (File No. 001-37581), filed with the SEC on August 1, 2017).
10.10+
2024 Inducement Plan (incorporated herein by reference to Exhibit 10.4 to the Registrant’s Current Report on
Form 8-K (File No. 001-37581), filed with the SEC on November 18, 2024).
10.11+
Form of Stock Option Grant Notice and Stock Option Agreement used in connection with the 2024
Inducement Plan (incorporated herein by reference to Exhibit 10.5 to the Registrant’s Current Report on
Form 8-K (File No. 001-37581), filed with the SEC on November 18, 2024).
10.12+
Form of Restricted Stock Unit Grant Notice and Restricted Stock Unit Award Agreement used in connection
with the 2024 Inducement Plan (incorporated herein by reference to Exhibit 10.6 to the Registrant’s Current
Report on Form 8-K (File No. 001-37581), filed with the SEC on November 18, 2024).
10.13+
Ninth Amended and Restated Non-Employee Director Compensation Policy (incorporated herein by
reference to Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q (File No. 001-37581), filed with
the SEC on May 8, 2023).
10.14+
Form of Indemnification Agreement (incorporated by reference to Exhibit 10.12 to the Registrant’s
Registration Statement on Form S-1 (File No. 333-206437), filed with the SEC on August 17, 2015).
10.15+
Second Amended and Restated Employment Agreement, effective as of February 1, 2024, by and between
the Registrant and Joseph Monahan (incorporated herein by reference to Exhibit 10.15 to the Registrant’s
Annual Report on Form 10-K (File No. 001-37581), filed with the SEC on February 27, 2024).
10.16+
Employment Agreement, dated as of January 31, 2022, by and between the Registrant and James Loerop
(incorporated herein by reference to Exhibit 10.16 to the Registrant’s Annual Report on Form 10-K (File No.
001-37581), filed with the SEC on February 24, 2022).
10.17+
Separation Agreement, Waiver, and Release, dated as of February 4, 2024, by and between the Registrant and
Douglas Manion (incorporated herein by reference to Exhibit 10.18 to the Registrant’s Annual Report on
Form 10-K (File No. 001-37581), filed with the SEC on February 27, 2024).
10.18+
Employment Agreement, dated as of January 1, 2023, by and between the Registrant and Kevin Balthaser
(incorporated herein by reference to Exhibit 10.24 to the Registrant’s Annual Report on Form 10-K (File No.
001-37581), filed with the SEC on February 23, 2023).
10.19+
Amended and Restated Employment Agreement, dated as of January 1, 2023, by and between the Registrant
and Douglas Manion (incorporated herein by reference to Exhibit 10.23 to the Registrant’s Annual Report on
Form 10-K (File No. 001-37581), filed with the SEC on February 23, 2023).
10.20+
Letter Agreement, dated as of January 31, 2024, by and between the Registrant and Neal Walker
(incorporated herein by reference to Exhibit 10.22 to the Registrant’s Annual Report on Form 10-K (File No.
001-37581), filed with the SEC on February 27, 2024).
10.21*§+
Employment Agreement, dated as of February 26, 2025, by and between the Registrant and Neal Walker.
10.22+
Employment Agreement, dated as of November 18, 2024, by and between the Registrant and Hugh Davis
(incorporated herein by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K (File No.
001-37581), filed with the SEC on November 18, 2024).
10.23˄
Office Lease, dated May 26, 2023, by and between the Registrant and CBCC – Lee Road Acquisitions, LLC
(incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No.
001-37581), filed with the SEC on June 1, 2023).
10.24*
Amended and Restated Sales Agreement, dated February 27, 2025, by and among the Registrant, Leerink
Partners LLC and Cantor Fitzgerald & Co.
10.25˄
Royalty Purchase Agreement, effective as of July 16, 2024, by and between the Registrant and OCM IP
Healthcare Portfolio LP (incorporated herein by reference to Exhibit 10.1 to the Registrant’s Quarterly Report
on Form 10-Q (File No. 001-37581), filed with the SEC on August 7, 2024).
10.26*˄§
Exclusive License Agreement, dated as of November 18, 2024, by and between the Registrant and Biosion,
Inc.
10.27*˄§
Collaboration Agreement, dated as of November 18, 2024, by and among the Registrant, Biosion, Inc. and
Chia Tai Tianqing Pharmaceutical Group, Co., Ltd.
10.28*˄§
Form of Common Stock Purchase Warrant Agreement issued on November 18, 2024.

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134
10.29
Form of Securities Purchase Agreement, dated November 18, 2024, by and between the Registrant and the
investors named therein (incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report
on Form 8-K (File No. 001-37581), filed with the SEC on November 18, 2024).
10.30
Form of Registration Rights Agreement, dated November 18, 2024, by and between the Registrant and the
investors named therein (incorporated herein by reference to Exhibit 10.2 to the Registrant’s Current Report
on Form 8-K (File No. 001-37581), filed with the SEC on November 18, 2024).
19.1*
Insider Trading Policy, effective as of February 26, 2025.
21.1
Subsidiaries of the Registrant (incorporated herein by reference to Exhibit 21.1 to the Registrant’s Annual
Report on Form 10-K (File No. 001-37581), filed with the SEC on February 27, 2024).
23.1*
Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm.
24.1*
Power of Attorney (contained on signature page hereto).
31.1*
Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the
Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*
Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the
Securities Exchange Act of 1934, as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002.
32.1†
Certification of Principal Executive Officer and Principal Financial Officer pursuant to Rules 13a-14(b) and
15d-14(b) promulgated under the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted
pursuant to section 906 of The Sarbanes-Oxley Act of 2002.
97.1
Aclaris Therapeutics, Inc. Incentive Compensation Recoupment Policy, adopted as of October 2, 2023
(incorporated herein by reference to Exhibit 97.1 to the Registrant’s Annual Report on Form 10-K (File No.
001-37581), filed with the SEC on February 27, 2024).
101.INS
XBRL Instance Document (the instance document does not appear in the Interactive Data File because its
XBRL tags are embedded within the Inline XBRL document)
101.SCH
Inline XBRL Taxonomy Extension Schema Document
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
*
Filed herewith.
†
This certification is being furnished solely to accompany this Annual Report pursuant to 18 U.S.C. Section 1350, and
is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be
incorporated by reference into any filing of the Registrant, whether made before or after the date hereof, regardless of
any general incorporation language in such filing.
+
Indicates management contract or compensatory plan.
#
Confidential treatment has been granted with respect to portions of this exhibit (indicated by asterisks) and those
portions have been separately filed with the SEC.
˄
Pursuant to Item 601(b)(10)(iv) of Regulation S-K promulgated by the SEC, certain portions of this exhibit have been
redacted because the Company has determined that the information is both not material and is the type that the
Company treats as private or confidential. The Company hereby agrees to furnish supplementally to the SEC, upon its
request, an unredacted copy of the exhibit. 
§
Pursuant to Item 601(a)(5) of Regulation S-K promulgated by the SEC, certain exhibits and schedules to this
agreement have been omitted. The Company hereby agrees to furnish supplementally to the SEC, upon its request, any
or all of such omitted exhibits or schedules.
Item 16. Form 10-K Summary
Not applicable.

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135
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the
registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
ACLARIS THERAPEUTICS, INC.
Date:  February 27, 2025
By: /s/ Neal Walker
Neal Walker
Chief Executive Officer
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes
and appoints Neal Walker and Kevin Balthaser, jointly and severally, as his or her true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and
all capacities, to sign this Annual Report on Form 10-K of Aclaris Therapeutics, Inc., and any or all amendments thereto,
and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and
every act and thing requisite or necessary to be done in and about the premises hereby ratifying and confirming all that said
attorneys-in-fact and agents, or his, her or their substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed
below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature
  
Title
  
Date
/s/ Neal Walker
Chief Executive Officer, and Chairman of the Board
of Directors
February 27, 2025
Neal Walker
(Principal Executive Officer)
/s/ Kevin Balthaser
Chief Financial Officer
February 27, 2025
Kevin Balthaser
(Principal Financial Officer and Principal
Accounting Officer)
/s/ Christopher Molineaux
Lead Independent Director
February 27, 2025
Christopher Molineaux
/s/ Anand Mehra, M.D.
Director
February 27, 2025
Anand Mehra, M.D.
/s/ William Humphries
Director
February 27, 2025
William Humphries
/s/ Andrew Schiff
Director
February 27, 2025
Andrew Schiff
/s/ Hugh Davis
President, Chief Operating Officer and Director
February 27, 2025
Hugh Davis
/s/ Maxine Gowen
Director
February 27, 2025
Maxine Gowen
/s/ Vincent Milano
Director
February 27, 2025
Vincent Milano

1
Exhibit 10.21
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the “Employment Agreement”), effective as of February 26, 2025 (“Agreement
Effective Date”), is made by and between Aclaris Therapeutics, Inc., a corporation organized under the laws of the State of Delaware
(“Employer”) and Neal Walker (“Executive”).
WHEREAS, Executive desires to continue to provide services to Employer and Employer desires to continue to retain the
services of Executive;
WHEREAS, Executive and Employer previously entered into that letter agreement dated as of January 31, 2024 (the “Letter
Agreement”);
WHEREAS, Employer and Executive desire to formalize the terms and conditions of Executive’s employment with Employer
as Chief Executive Officer; and
WHEREAS, this Employment Agreement has been duly approved and its execution has been duly authorized by Employer’s
Board of Directors (the “Board”).
NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein Employer and Executive hereby
agree as follows:
SECTION 1. EMPLOYMENT
1.1
General. Employer hereby agrees to employ Executive in the capacity of Chief Executive Officer (“CEO”). Executive
hereby accepts such employment upon the terms and subject to the conditions herein contained.
1.2
Authority and Duties. Executive shall have full responsibility as the CEO of Employer and all authority normally
accorded to such position. Executive agrees to perform such duties and responsibilities commensurate with the position of CEO as may
reasonably be determined by the Board.
1.2.1 Reporting. During Executive’s employment with Employer, Executive will report directly to, and take direction
from, the Board.
1.2.2 Time to Be Devoted to Employment. During Executive’s Employment with Employer, Executive shall
diligently devote his efforts, business time, attention and energies to the business of Employer and will not, while employed by
Employer, undertake or engage in any other employment, occupation or business enterprise that would, as determined in the sole
discretion of Employer, interfere with Executive’s responsibilities and the performance of Executive’s duties hereunder except for (i)
reasonable time devoted to volunteer services for or on behalf of such religious, educational, non-profit and/or other charitable
organization as Executive may wish to serve, (ii) reasonable time devoted to activities in the non-profit and business communities
consistent with Executive’s duties; and (iii) reasonable time devoted to service as a member of the board of directors of the entities listed
on Exhibit A (as described in Section 1.3) or as otherwise permitted pursuant to Section 1.3. This restriction shall not, however, preclude
Executive (x) from owning less than one percent (1%) of the total outstanding shares of a publicly

2
traded company, or (y) from employment or service in any capacity with Affiliates of Employer.   As used in this Employment
Agreement, “Affiliates” means an entity under common management or control with Employer.
1.3
Other Responsibilities. Notwithstanding Section 1.2.2 above, Executive will not engage in any other for-profit
business, profession or occupation, including as a member of a board of directors of any third party, for compensation which would
materially conflict or materially interfere with the rendition of services hereunder, without the prior written consent of the Board, which
shall not be unreasonably withheld.  Any uncertainty as to whether such a conflict exists will be raised by Executive for determination by
the Board, acting reasonably. The Board acknowledges that Executive has ongoing participation in other private and public businesses
that have been disclosed by Executive and are listed on Exhibit A and that such participation does not, as of the Agreement Effective
Date, conflict with his role at Employer. Employer reserves the right to revisit Executive’s outside activities and may, in its sole, but
reasonable, discretion, revoke its approval of Executive’s outside activities (including Executive’s activities listed on Exhibit A) in the
event Employer concludes that any such activities conflict with Executive’s obligations to Employer. For avoidance of doubt, in the event
that Employer determines, in its sole, but reasonable, discretion, that a conflict of interest exists between Executive’s obligations to
Employer and Executive’s outside activities (including Executive’s activities listed on Exhibit A) then Employer may request that
Executive resign from any such role and/or terminate any such outside activity. The parties agree that Executive’s refusal to comply with
such a request from Employer will constitute Executive’s resignation without Good Reason (as defined in Section 3.1.7 herein), with
immediate effect, and Executive will not be eligible for the severance benefits set forth in either Sections 3.2.1 or 3.2.3 herein. Except for
the businesses listed on Exhibit A, which have already been approved, Executive agrees to disclose to the Board and receive prior written
consent from the Board to participate as a director, with any competing company whether it is a private or public company. Executive
further agrees to disclose any other director positions with any other company that may materially affect his ability to perform his duties
and responsibilities under this Employment Agreement.  Notwithstanding the above, nothing herein shall limit or preclude Executive
from managing any passive investments made by Executive.
1.4
Location of Employment. Executive’s principal place of employment during his employment with Employer shall be
in Wayne, Pennsylvania or such other location as Employer and Executive shall agree; provided however, that from time to time
Executive may be required to travel to Employer’s other offices, including Employer’s office in St. Louis, Missouri.
SECTION 2.  COMPENSATION AND BENEFITS
2.1
Salary. Beginning as of the Agreement Effective Date, Employer will pay to Executive an annual base salary of
$615,000 payable subject to standard federal and state payroll withholding requirements in accordance with the regular payroll practices
of Employer (“Base Salary”). The annual Base Salary may be increased (but not decreased without written consent of Executive) during
the term of this Employment Agreement by the Board in its sole discretion.
2.2
Additional Compensation. In addition to the salary set forth in Section 2.1, Executive shall be entitled to receive a
cash bonus in accordance with the terms of this Section 2.2. For each fiscal year of Employer, beginning January 1, during the
Employment Term (as

3
defined in Section 2.4 hereof), Executive shall be eligible to receive a cash bonus based on (i) the “Annual Bonus Expectancy Amount,”
which shall be an amount equal to 60% of Executive’s Base Salary for the applicable fiscal year, and (ii) Executive’s attainment of
performance targets and other reasonable criteria established by the Board, to the extent possible, by the end of the first month of such
fiscal year. Depending on the targets and criteria which are achieved or met, the amount of the cash bonus actually payable to Executive
for each fiscal year will be an amount from zero to and above the Annual Bonus Expectancy Amount. Any cash bonus amount payable
pursuant to this Section 2.2 shall be paid to Executive as soon as practicable, but in no event later than two and one-half (2 1/2) months,
following the end of the fiscal year to which it relates. For the avoidance of doubt, Executive does not have to be employed by Employer
on the date such bonus is approved or paid by Employer to receive such bonus.
2.3
Executive Benefits. In addition to the salary and additional compensation set forth in Sections 2.1 and 2.2, Executive
shall also be entitled to the following benefits during Executive’s employment hereunder:
2.3.1 Expenses. Employer will promptly reimburse Executive for expenses he reasonably incurs in connection with the
performance of his duties (including business travel and entertainment expenses), in accordance with Employer’s standard expense
reimbursement policy, as the same may be modified by Employer from time to time; provided, however, that Executive has provided
Employer with documentation of such expenses in accordance with the Employer’s expense reimbursement policies and applicable tax
requirements. For the avoidance of doubt, to the extent that any reimbursements payable to Executive are subject to the provisions of
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”): (a) any such reimbursements will be paid no later than
December 31 of the year following the year in which the expense was incurred, (b) the amount of expenses reimbursed in one year will
not affect the amount eligible for reimbursement in any subsequent year, and (c) the right to reimbursement under this Employment
Agreement will not be subject to liquidation or exchange for another benefit.
2.3.2 Employer Plans.   Executive will be eligible to participate on the same basis as similarly situated full-time
employees in Employer’s employee benefit plans and programs, as they may be interpreted, adopted, revised or deleted from time to time
in Employer’s sole discretion, subject to and on a basis consistent with the terms, conditions and overall administration of such plans and
programs. All matters of eligibility for coverage or benefits under any benefit plan shall be determined in accordance with the provisions
of such plan. Employer retains the unilateral right to amend, modify or terminate any of its employee benefit plans and programs at any
time.
2.3.3 Vacation. Executive shall be eligible for paid vacation leave (not including regular holidays) in accordance with
Employer’s applicable vacation or PTO policy and consistent with the needs of the business. Vacation must be scheduled at those times
convenient to Employer’s business as reasonably determined by the Board.
2.3.4 Coverage. Nothing in this Employment Agreement shall prevent Executive from participating in any other
compensation plan or benefit plan made available to similarly situated full-time employees of Employer.

4
2.3.5 Withholding. All compensation shall be subject to withholding of taxes and deductions of other amounts as may
be required by law.
2.4
Employment Term. Unless earlier terminated pursuant to Section 3.1, Executive’s employment by Employer pursuant
to this Employment Agreement shall continue until the second anniversary of the Agreement Effective Date (the “Initial Term”).
Thereafter, this Employment Agreement shall be automatically renewed for successive one (1) year periods (any subsequent employment
period being referred to herein as the “Renewal Term”, and together with the Initial Term, the “Employment Term”); provided, however,
that either party may elect to not renew this Employment Agreement by written notice to such effect delivered to the other party at least
ninety (90) days prior to expiration of the Initial Term or the Renewal Term.
SECTION 3.  TERMINATION OF EMPLOYMENT
3.1
Events of Termination. Executive’s employment with Employer will terminate upon the occurrence of any one or
more of the following events:
3.1.1 Death. In the event of Executive’s death, Executive’s employment will terminate on the date of death.
3.1.2 Disability. In the event of Executive’s Disability (as hereinafter defined), Employer will have the option to
terminate Executive’s employment by giving a notice of termination to Executive. The notice of termination shall specify the date of
termination, which date shall not be earlier than thirty (30) calendar days after the notice of termination is given. For purposes of this
Employment Agreement, “Disability” has the meaning set forth in Employer’s long term disability plan.
3.1.3 Termination by Employer for Cause. Employer may, at its option, terminate Executive’s employment for Cause
(as hereinafter defined) by unilateral action of the Board of Directors upon giving a notice of termination to Executive. “Cause” shall
mean (i) Executive’s conviction of, or guilty plea to, a felony (other than traffic violations); (ii) any act(s) or omission(s) by Executive
which constitutes gross negligence or a material breach of Executive’s duty of loyalty; (iii) any material breach by Executive of
Employer’s personnel policies; (iv) refusal to follow or implement a clear and reasonable directive of Employer; (v) breach of fiduciary
duty; or (vi) a material violation or breach by Executive of this Employment Agreement (other than an event described in the foregoing
clauses) or any other agreement between the parties. If Executive’s employment is terminated for Cause pursuant to this Section 3.1.3,
the effective date of such termination shall be the later of the date the notice of termination is given or the date set forth in such notice of
termination.
3.1.4 Without Cause By Employer. Employer may, at its option, terminate Executive’s employment for any reason
whatsoever (other than for the other reasons set forth above in this Section 3.1 that would constitute “Cause” to terminate) by giving a
notice of termination to Executive, and Executive’s employment shall terminate on the later of the date the notice of termination is given
or the date set forth in such notice of termination.
3.1.5 By Executive. Executive may, at any time, terminate Executive’s employment for any reason whatsoever by
giving a notice of termination to Employer. Executive’s

5
employment shall terminate on the earlier of (i) thirty (30) calendar days after the date of receipt by Employer of the notice of
termination or (ii) such earlier date as the Employer and Executive shall agree.
3.1.6 Termination Upon Non-Renewal. Either party may terminate this Employment Agreement and Executive’s
employment hereunder by providing the other party notice in accordance with Section 2.4 above, in which case this Employment
Agreement and Executive’s employment hereunder shall terminate on the last date of the Initial Term or the Renewal Term, as the case
may be. For the avoidance of doubt, Executive shall continue to be employed by Employer, on the same terms and conditions as set forth
in this Employment Agreement during the ninety (90)-day notice period provided by either party to the other party in accordance with
Section 2.4 above, unless, Employer, in its sole discretion elects to have Executive cease work for Employer, in all capacities, during
such notice period. In such event, Employer shall pay Executive all compensation in accordance with Section 3.2.3.
3.1.7 For Good Reason by Executive. Executive may, at his option, terminate Executive’s employment for “Good
Reason” by giving a notice of termination to Employer in the event that, in the absence of events that would support a termination of
Executive for Cause:
(i)
there is a material failure of Employer (or successor employer) to pay Executive’s salary or additional
compensation or benefits hereunder in accordance with this Employment Agreement;
(ii)
Executive’s Base Salary is materially decreased without his prior written consent;
(iii)
Executive is assigned duties materially inconsistent with his title and the responsibilities set forth in
Executive’s job description, without Executive’s prior written consent;
(iv)
Executive’s place of employment is changed to a location that is greater than fifty (50) miles from Executive’s
current place of employment; or
(v)
any other material violation or breach by Employer of this Employment Agreement. Notwithstanding the
foregoing, none of the events described in clauses (i) through (iv) above shall constitute Good Reason unless Executive shall have
notified Employer in writing describing the event which constitute Good Reason within thirty (30) days after Executive first becomes
aware of such event and then only if Employer shall have failed to reasonably cure such events, if curable, within thirty (30) days after
Employer’s receipt of such written notice and Executive elects to terminate his employment as a result within thirty (30) days following
the end of such thirty (30) day period (assuming, for the avoidance of doubt, that Employer does not elect to cure).
3.2
Certain Obligations of Employer Following Termination of Executive’s Employment. Following the termination
of Executive’s employment under the circumstances described below, Employer will pay to Executive, subject to standard federal and
state payroll withholding requirements and in accordance with its regular payroll practices, the following compensation and provide the
following benefits (provided that the continuing payments of

6
Executive’s then-current Base Salary, as described below, shall occur no less frequently than monthly):
3.2.1 Death; Disability; Termination by Employer Without Cause or by Executive for Good Reason. In the event
that Executive’s employment is terminated by Employer pursuant to Section 3.1.1 (“Death”), Section 3.1.2 (“Disability”), Section 3.1.4
(“Without Cause by Employer”) or by Executive pursuant to Section 3.1.7 (“Termination by Executive for Good Reason”) hereof, and
Executive, or his estate, as the case may be, executes and does not revoke a separation agreement containing a release upon such
termination, in a form provided by the Employer, of any and all claims against Employer and all related parties with respect to all matters
arising out of Executive’s employment by Employer, or the termination thereof (the “Release”) in accordance with Section 3.7,
Executive, or his estate, as the case may be, shall be entitled to the following payments and benefits, which payments and benefits shall
be paid in accordance with this Section 3.2.1 and Section 3.7:
(i)
Continuing payments of Executive’s then-current Base Salary for the Severance Period (as defined in Section
3.5 herein), payable subject to standard federal and state payroll withholding requirements in accordance with Employer’s
regular payroll practices on Employer’s normal payroll schedule over the Severance Period, subject to Section 3.7;
(ii)
In the event that the effective date of the Executive’s termination occurs on or after the last day of the fiscal
year but before any bonuses for such fiscal year have been approved or paid by Employer, then Executive will receive, as an
additional severance benefit, an amount equal to the bonus Executive would have been paid in accordance with Section 2.2 had
Executive remained employed through the last day of such fiscal year (the “Prior Year Bonus Severance”).  The Prior Year
Bonus Severance will be paid at the same time bonuses are paid to other executives and in no event later than two and one-half
(2 1/2) months following the end of the fiscal year in which the termination date occurs;
(iii)
So long as Executive is eligible, and so long as Executive remains eligible, for and upon his timely election of
coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, or, if applicable, state or local insurance laws
(“COBRA”), Employer will continue to pay, directly to the healthcare provider when due, Employer’s portion of the medical,
vision and dental coverage premiums (and Executive will be responsible for Executive’s portion) for a period of twelve (12)
months after the effective date of Executive’s termination (the “COBRA Payment Period”); provided that, if at any time
Employer determines, in its sole discretion, that the payment of the COBRA premiums would result in a violation of the
nondiscrimination rules of Section 105(h)(2) of the Code or any statute or regulation of similar effect (including but not limited
to the 2010 Patient Protection and Affordable Care Act, as amended by the 2010 Health Care and Education Reconciliation
Act), then in lieu of providing the COBRA premiums for the remainder of the COBRA Payment Period, Employer will instead
pay Executive on the first day of each month of the remainder of the COBRA Payment Period, a fully taxable cash payment
equal to the COBRA premiums for that month, subject to applicable tax withholdings, for the remainder of the COBRA
Payment Period; and

7
(iv)
In the event such termination of employment occurs on or within three (3) months prior to or within twelve
(12) months following the effective date of a Change of Control (as defined herein), Executive shall be entitled to the additional
following payments and benefits (for the avoidance of doubt, Executive shall also be entitled to the amounts set forth in Section
3.2.1(i)-(iii)):
(1)
Continuing payments of Executive’s then-current Base Salary for an additional six (6)
months following the end of the Severance Period, payable subject to standard federal and state payroll withholding
requirements in accordance with Employer’s regular payroll practices on Employer’s normal payroll schedule over the
six (6) month period immediately following the end of the Severance Period, subject to Section 3.7;
(2)
Employer shall pay to Executive a lump sum payment equal to 1.5 times the Annual
Expectancy Bonus Amount (target bonus), less applicable deductions and withholdings, paid within thirty (30) days of
the later of (a) the effective date of the Change of Control or (b) Executive’s termination, if such termination occurs on
or after the effective date of a Change of Control;
(3)
Continued payment of Employer’s portion of Executive’s COBRA premiums for an
additional six (6) months following the end of the COBRA Payment Period, subject to the terms, conditions and
payment provisions set forth in Section 3.2.1(iii); and
(4)
In the event such termination of employment occurs (A) on or within three (3) months prior
to the effective date of a Change of Control, all unvested stock options and other equity awards held by Executive and
outstanding on the effective date of termination shall become fully vested on the effective date of the Change of
Control, or (B) within twelve (12) months following the effective date of a Change of Control, provided that any
surviving corporation or acquiring corporation assumes Executive’s stock options and/or other equity awards, as
applicable, or substitutes similar stock options or equity awards for Executive’s stock options and/or equity awards, as
applicable, in accordance with the terms of Employer’s applicable equity incentive plans, all such unvested stock
options and other equity awards held by Executive and outstanding on the effective date of termination shall become
fully vested on the date of such termination.
For purposes of this Employment Agreement, “Change of Control” means, in each case as approved by the Board and the
requisite stockholders of Employer, (i) any consolidation or merger of Employer with or into any other corporation or other entity or
person, or any other corporate reorganization, in which the stockholders of Employer immediately prior to such consolidation, merger or
reorganization, own, in the aggregate, less than 50% of the surviving entity’s voting power and/or outstanding capital stock immediately
after such consolidation, merger or reorganization, or any transaction or series of related transactions (including any transaction which
results from an option agreement or binding letter of intent with a third party) to which Employer or any of its stockholders is a party in
which in excess of 50% of Employer’s

8
voting power and/or outstanding capital stock is transferred, or pursuant to which any person or group of affiliated persons obtains in
excess of 50% of Employer’s voting power and/or outstanding capital stock, excluding any consolidation or merger effected exclusively
to change the domicile of Employer; or (ii) any sale, license or other disposition (including through a Board and stockholder approved
division or spin-off transaction) of all or substantially all of the assets of Employer and/or any of its subsidiaries or any sale, exclusive
license or other disposition of all or substantially all of Employer’s intellectual property, as reasonably determined based upon the
potential earning power of the assets or intellectual property; provided, however, that none of the following shall constitute a Change of
Control: (A) transfers of capital stock by an existing stockholder as a result of death or otherwise for estate planning purposes or to such
stockholder’s affiliates or to any of Employer’s other existing stockholders, and (B) issuances of equity securities of Employer in
connection with financings for working capital and other general corporate purposes; and, provided further, that such “Change of
Control” qualifies as either a change in ownership of Employer as defined in Section 409A of the Code (“Section 409A”) or a change in
the ownership of a substantial portion of Employer’s assets as defined in Section 409A, as the case may be.
3.2.2 Termination by Executive Other than For Good Reason; Termination Upon Non-Renewal by Executive;
Termination by Employer for Cause. In the event Executive’s employment is terminated by Executive other than for Good Reason
pursuant to Section 3.1.5 hereof (“By Executive”) or by Executive pursuant to Section 3.1.6 hereof (“Termination Upon Non-Renewal”)
or by Employer pursuant to Section 3.1.3 hereof (“Termination by Employer for Cause”), Executive shall be entitled to no further
compensation or other benefits under this Employment Agreement except as to that portion of any unpaid salary and other benefits
accrued and earned by him hereunder up to and including the effective date of such termination and to offer COBRA coverage at
Executive’s cost pursuant to applicable law.
3.2.3 Termination Upon Non-Renewal by Employer. In the event Executive’s employment is terminated by
Employer pursuant to Section 3.1.6 hereof, then during the ninety (90)-day notice period of Section 2.4, Employer shall continue to pay
to Executive his then-current Base Salary and benefits subject to standard federal and state payroll withholding requirements and in
accordance with Employer’s regular payroll practices, and no later than the effective date of termination of employment, Employer shall
pay to Executive any such unpaid salary accrued and earned by him up to and including the effective date of termination. In addition, in
the event Executive’s employment is terminated by Employer pursuant to Section 3.1.6 hereof, then provided Executive executes and
does not revoke a Release in accordance with Section 3.7, Executive shall be entitled to the following, which payments and benefits shall
be paid in accordance with this Section 3.2.3 and Section 3.7:
(i)
Continuing payments of Executive’s then-current Base Salary for the Severance Period payable subject to
standard federal and state payroll withholding requirements in accordance with Employer’s regular payroll practices on
Employer’s normal payroll schedule over the Severance Period, subject to Section 3.7;
(ii)
Employer shall pay to Executive a lump sum payment equal to the gross sum of any bonuses or portion thereof
for any preceding year or for the year of termination

9
which have been or are approved by Employer, but has not been received by Executive prior to the effective date of termination,
less applicable deductions and withholdings, paid in accordance with Section 2.2 but in no event later than two and one-half (2
1/2) months following the end of the fiscal year to which it relates. For the avoidance of doubt, Executive does not have to be
employed by Employer on the date such bonuses are approved by Employer to receive such bonuses; and
(iii)
So long as Executive is eligible, and so long as Executive remains eligible, for and upon his timely election of
coverage under COBRA, Employer will continue to pay, directly to the healthcare provider when due, Employer’s portion of the
medical, vision and dental coverage premiums (and Executive will be responsible for Executive’s portion) for the COBRA
Payment Period; provided that, if at any time Employer determines, in its sole discretion, that the payment of the COBRA
premiums would result in a violation of the nondiscrimination rules of Section 105(h)(2) of the Code or any statute or regulation
of similar effect (including but not limited to the 2010 Patient Protection and Affordable Care Act, as amended by the 2010
Health Care and Education Reconciliation Act), then in lieu of providing the COBRA premiums for the remainder of the
COBRA Payment Period, Employer will instead pay Executive on the first day of each month of the remainder of the COBRA
Payment Period, a fully taxable cash payment equal to the COBRA premiums for that month, subject to applicable tax
withholdings, for the remainder of the COBRA Payment Period.
3.3
Nature of Payments. All amounts to be paid by Employer to Executive pursuant to Sections 3.2.1(i)-(iv) and 3.2.3(i)-
(iii) are considered by the parties to be severance payments and are in lieu of, and not in addition to, any benefits to which Executive may
otherwise be entitled under any Employer severance plan, policy or program.
3.4
Duties Upon Termination. During the Severance Period, if there is a Severance Period applicable to Executive’s
termination of employment from Employer, Executive shall fully cooperate with Employer in all matters relating to the winding up of
Executive’s pending work including, but not limited to, any litigation in which Employer is involved, and the orderly transfer of any such
pending work to such other employees as may be designated by Employer. Notwithstanding the foregoing, such cooperation requirement
shall not unreasonably interfere with his then current employment or business activities. With Employer’s prior approval, Executive shall
be reimbursed for all expenses reasonably incurred in connection with such cooperation. Following the end of the Severance Period,
Executive will be released from any duties and obligations hereunder (except those duties and obligations set forth in Article 4 hereof).
In the event of termination of Executive’s employment pursuant to Sections 3.1.1 through 3.1.7 hereof, the obligations of Employer to
Executive will be as set forth in Section 3.2 hereof. Upon termination, Executive shall immediately resign as a director of the Board and
from any other position he may hold with Employer.
3.5
Severance Period. “Severance Period” shall mean a period of twelve (12) months beginning on the effective date of
Executive’s termination of employment with Employer.
3.6
Release. Notwithstanding any provision of this Employment Agreement to the contrary, in no event shall the timing of
Executive’s execution of the Release, directly or indirectly,

10
result in Executive designating the calendar year of payment, and if a payment that is subject to the requirements of Section 409A of the
Code and is subject to execution of the Release could be made in more than one taxable year based on when the Release is executed or
becomes effective, payment shall be made in the later year.
3.7
Commencement of Severance Payments. The severance payments and benefits set forth in Sections 3.2.1(i)-(iv)
(Termination by Employer for Death, Disability, Without Cause, by Executive for Good Reason) and Sections 3.2.3(i)-(iii) (Termination
Upon Non-Renewal by Employer) above will not be paid or provided unless Executive executes and does not revoke the Release and the
Release is enforceable and effective as provided in the Release on or before the date that is the sixtieth (60th) day following the effective
date of termination (such 60th day, the “Severance Pay Commencement Date”). No cash severance payments will be paid pursuant to
Sections 3.2.1 or 3.2.3 prior to the Severance Pay Commencement Date. On the Severance Pay Commencement Date, Employer will pay
in a lump sum the aggregate amount of the cash severance payments that Employer would have paid Executive through such date had the
payments commenced on the effective date of termination through the Severance Pay Commencement Date, with the balance paid
thereafter on the applicable schedules described above. Notwithstanding any other provision of this Employment Agreement to the
contrary, it is intended that the payment of severance upon termination for Good Reason by Executive in accordance with Section 3.1.7
satisfy the safe harbor set forth in Treasury Regulation Section 1.409A-1(n)(2)(ii)), and any severance payment made pursuant to this
Employment Agreement shall satisfy the exemptions from the application of Section 409A of the Code provided under Treasury
Regulation Sections 1.409A-1(b)(4), and 1.409A-1 (b)(9).
SECTION 4. CONFIDENTIALITY, INVENTION RIGHTS, NON-COMPETITION AND NON-SOLICITATION
4.1
Confidentiality, Invention Rights, Non-Competition and Non-Solicitation. The parties hereto have entered into an
Amended and Restated Confidentiality, Invention Rights, Non-Competition, and Non-Solicitation Agreement, which may be amended by
the parties from time to time without regard to this Employment Agreement. The Amended and Restated Confidentiality, Invention
Rights, Non-Competition, and Non-Solicitation Agreement contains provisions that are intended by the parties to survive and do survive
termination of this Employment Agreement.
4.2
Remedies. Executive acknowledges and agrees that (a) Employer will be irreparably injured in the event of a breach
by Executive of any of his obligations under this Article 4; (b) monetary damages will not be an adequate remedy for any such breach;
and (c) in the event of any such breach, the Employer will be entitled to injunctive relief, in addition to any other remedy which it may
have, and Executive shall not oppose such injunctive relief based upon the extent of the harm or the adequacy of monetary damages.
SECTION 5. MISCELLANEOUS PROVISIONS
5.1
Severability. If in any jurisdiction any term or provision hereof is determined to be invalid or unenforceable, (a) the
remaining terms and provisions hereof shall be unimpaired, (b) any such invalidity or unenforceability in any jurisdiction shall not
invalidate or render

11
unenforceable such provision in any other jurisdiction, and (c) the invalid or unenforceable term or provision shall, for purposes of such
jurisdiction, be deemed replaced by a term or provision that is valid and enforceable and that comes closest to expressing the intention of
the invalid or unenforceable term or provision.
5.2
Execution in Counterparts. This Employment Agreement may be executed in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement (and all signatures need not appear on any one counterpart), and this Employment Agreement
shall become effective when one or more counterparts has been signed by each of the parties hereto and delivered to each of the other
parties hereto.  Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with
the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act or other applicable law) or other transmission method and any
counterpart so delivered will be deemed to have been duly and validly delivered and be valid and effective for all purposes.
5.3
Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed
duly given when delivered by hand, or when delivered if mailed by registered or certified mail, postage prepaid, return receipt requested,
or private courier service or via facsimile (with written confirmation of receipt) or email (with written confirmation of receipt) as
follows:
If to Employer, to:
Aclaris Therapeutics, Inc.
701 Lee Road, Suite 103
Wayne, PA 19087
Attention: Legal Department
E-mail: legal@aclaristx.com
If to Executive, to the current address on file with Employer,
or to such other address(es) as a party hereto shall have designated by like notice to the other parties hereto.
5.4
Amendment.  No provision of this Employment Agreement may be modified, amended, waived or discharged in any
manner except by a written instrument executed by Employer and Executive.
5.5
Entire Agreement. This Employment Agreement constitutes the entire agreement of the parties hereto with respect to
the subject matter hereof, and supersedes all prior agreements and understandings of the parties hereto, oral or written, with respect to the
subject matter hereof, including but not limited to the Letter Agreement or any other written embodiment of the employment relationship
between Executive and Employer, provided that nothing herein shall modify the terms of any equity awards granted to Executive as set
forth in the Letter Agreement. No representation, promise or inducement has been made by either party that is not embodied in this
Employment Agreement, and neither party shall be bound by or liable for any alleged representation, promise or inducement not so set
forth.

12
5.6
Applicable Law. This Employment Agreement shall be governed by and construed in accordance with the laws of the
Commonwealth of Pennsylvania applicable to contracts made and to be wholly performed therein without regard to its conflicts or choice
of law provisions.
5.7
Headings. The headings contained herein are for the sole purpose of convenience of reference, and shall not in any
way limit or affect the meaning or interpretation of any of the terms or provisions of this Employment Agreement.
5.8
Binding Effect; Successors and Assigns. Executive may not delegate his duties or assign his rights hereunder. This
Employment Agreement will inure to the benefit of, and be binding upon, the parties hereto and their respective heirs, legal
representatives, and successors. Employer may assign this Employment Agreement to any entity purchasing all or substantially all of the
assets of Employer.
5.9
Waiver, etc. The failure of either of the parties hereto to at any time enforce any of the provisions of this Employment
Agreement shall not be deemed or construed to be a waiver of any such provision, nor to in any way affect the validity of this
Employment Agreement or any provision hereof or the right of either of the parties hereto to thereafter enforce each and every provision
of this Employment Agreement. No waiver of any breach of any of the provisions of this Employment Agreement shall be effective
unless set forth in a written instrument executed by the party against whom or which enforcement of such waiver is sought, and no
waiver of any such breach shall be construed or deemed to be a waiver of any other or subsequent breach.
5.10
Continuing Effect. Provisions of this Employment Agreement which by their terms must survive the termination of
this Employment Agreement in order to effectuate the intent of the parties will survive any such termination, whether by expiration of the
term, termination of Executive’s employment, or otherwise, for such period as may be appropriate under the circumstances.
5.11
Representations and Warranties of Executive. Executive hereby represents and warrants to Employer that to the
knowledge of Executive, Executive is not bound by any non-competition or other agreement which would prevent his performance
hereunder. Executive hereby certifies that he is not under investigation by the FDA for debarment action, has not been debarred under the
Generic Drug Enforcement Act of 1992 (21 U.S.C. 301 et seq.), and is not otherwise being investigated, restricted or disqualified from
performing services relating to clinical trials by the FDA or any other regulatory authority or professional body in any other jurisdiction.
Executive will inform Employer promptly in the event of any such debarment, investigation, restriction or disqualification, which shall
constitute a breach of this Employment Agreement.
5.12
Section 409A of the Code. This Employment Agreement is intended to comply with Section 409A of the Code and its
corresponding regulations, or an exemption, and payments may only be made under this Employment Agreement upon an event and in a
manner permitted by Section 409A of the Code, to the extent applicable. Payment under this Employment Agreement is intended to be
exempt from Code Section 409A under the “short-term deferral” exception set forth in Treasury Regulation Section 1.409A-1(b)(4), to
the maximum extent applicable, and then under the “separation pay” exception set forth in

13
Treasury Regulation Section 1.409A-1(b)(9), to the maximum extent applicable. All payments to be made upon a termination of
employment under this Employment Agreement may only be made upon a “separation from service” within the meaning of Treasury
Regulation Section 1.409A-1(h) (or any successor provision) (a “Separation from Service”). For purposes of Code Section 409A, the
right to a series of installment payments under this Employment Agreement shall be treated as a right to a series of separate payments. In
no event may Executive, directly or indirectly, designate the calendar year of a payment. If the termination of employment giving rise to
the payments described in Section 3.2.1 is not a Separation from Service, then the amounts otherwise payable pursuant to Section 3.2.1
will instead be deferred without interest and paid when Executive experiences a Separation from Service. Notwithstanding anything in
this Employment Agreement to the contrary or otherwise, with respect to any expense, reimbursement or in-kind benefit provided
pursuant to this Employment Agreement that constitutes a “deferral of compensation” within the meaning of Section 409A of the Code
and its implementing regulations and guidance, (a) the expenses eligible for reimbursement or in-kind benefits provided to Executive
must be incurred during the Employment Term (or applicable survival period), (b) the amount of expenses eligible for reimbursement or
in-kind benefits provided to Executive during any calendar year will not affect the amount of expenses eligible for reimbursement or in-
kind benefits provided to Executive in any other calendar year, (c) the reimbursements for expenses for which Executive is entitled to be
reimbursed shall be made on or before the last day of the calendar year following the calendar year in which the applicable expense is
incurred and (d) the right to payment or reimbursement or in-kind benefits hereunder may not be liquidated or exchanged for any other
benefit. Notwithstanding any provision to the contrary in this Employment Agreement, if Executive is deemed by Employer at the time
of his Separation from Service to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code, and if any of the
payments due upon Separation from Service set forth herein and/or under any other agreement with Employer are deemed to be
“deferred compensation,” then to the extent delayed commencement of any portion of such payments is required to avoid a prohibited
distribution under Section 409A(a)(2)(B)(i) of the Code and the related adverse taxation under Section 409A of the Code, such payments
will not be provided to Executive prior to the earliest of (i) the expiration of the six (6)-month period measured from the date of
Executive’s Separation from Service with Employer, (ii) the date of Executive’s death or (iii) such earlier date as permitted under Section
409A of the Code without the imposition of adverse taxation. Upon the first business day following the expiration of such applicable
Code Section 409A(a)(2)(B)(i) period, all payments deferred pursuant to this Section 5.12 will be paid in a lump sum to Executive, and
any remaining payments due will be paid as otherwise provided in this Employment Agreement or in the applicable agreement. No
interest will be due on any amounts so deferred.
5.13
Section 280G. Notwithstanding any other provision of this Employment Agreement or any other plan, arrangement or
agreement to the contrary, if any of the payments or benefits provided or to be provided by Employer or its affiliates to Executive or for
Executive’s benefit pursuant to the terms of this Employment Agreement or otherwise (the “Covered Payments”) constitute parachute
payments (the “Parachute Payments”) within the meaning of Section 280G of the Code and, but for this Section 5.13, would be subject
to the excise tax imposed under Section 4999 of the Code (or any successor provision thereto) or any similar tax imposed by state or
local law or any interest or penalties with respect to such taxes (collectively, the “Excise

14
Tax”), then prior to making the Covered Payments, a calculation shall be made comparing (i) the Net Benefit (as defined below) to
Executive of the Covered Payments after payment of the Excise Tax to (ii) the Net Benefit to Executive if the Covered Payments are
limited to the extent necessary to avoid being subject to the Excise Tax. Only if the amount calculated under clause (i) above is less than
the amount under clause (ii) above will the Covered Payments be reduced to the minimum extent necessary to ensure that no portion of
the Covered Payments is subject to the Excise Tax. “Net Benefit” shall mean the present value of the Covered Payments net of all
federal, state, local, foreign income, employment and excise taxes.
(a)
Any such reduction shall be made in accordance with Section 409A and the following:
(i)
the Covered Payments consisting of cash severance benefits that do not constitute nonqualified deferred
compensation subject to Section 409A shall be reduced first, in reverse chronological order; and
(ii)
all other Covered Payments consisting of cash payments, and Covered Payments consisting of accelerated
vesting of equity based awards to which Treas. Reg. §1.280G-1 Q/A-24(c) does not apply, and that in either
case do not constitute nonqualified deferred compensation subject to Section 409A, shall be reduced second,
in reverse chronological order; and
(iii)
all Covered Payments consisting of cash payments that constitute nonqualified deferred compensation subject
to Section 409A shall be reduced third, in reverse chronological order; and
(iv)
all Covered Payments consisting of accelerated vesting of equity-based awards to which Treas. Reg. §
1.280G-1 Q/A-24(c) applies shall be the last Covered Payments to be reduced.
(b)
Any determination required under this Section 5.13 shall be made in writing in good faith by an independent
accounting firm selected by Employer and reasonably acceptable to   Executive (the “Accountants”). Employer and Executive shall
provide the Accountants with such information and documents as the Accountants may reasonably request in order to make a
determination under this Section 5.13. For purposes of making the calculations and determinations required by this Section 5.13, the
Accountants may rely on reasonable, good-faith assumptions and approximations concerning the application of Section 280G and
Section 4999 of the Code. The Accountants’ determinations shall be final and binding on Employer and Executive. Employer shall be
responsible for all fees and expenses incurred by the Accountants in connection with the calculations required by this Section 5.13.
(c)
It is possible that after the determinations and selections made pursuant to this Section 5.13. Executive will receive
Covered Payments that are in the aggregate more than the amount intended or required to be provided after application of this Section
5.13 (“Overpayment”) or less than the amount intended or required to be provided after application of this Section 5.13
(“Underpayment”).

15
(i)
In the event that: (A) the Accountants determine, based upon the assertion of a deficiency by the Internal
Revenue Service against either Employer or Executive that the Accountants believe has a high probability of
success, that an Overpayment has been made or (B) it is established pursuant to a final determination of a
court or an Internal Revenue Service proceeding that has been finally and conclusively resolved that an
Overpayment has been made, then Executive shall pay any such Overpayment to Employer together with
interest at the applicable federal rate (as defined in Section 7872(f)(2)(A) of the Code) from the date of
Executive’s receipt of the Overpayment until the date of repayment.
(ii)
In the event that: (A) the Accountants, based upon controlling precedent or substantial authority, determine
that an Underpayment has occurred or (B) a court of competent jurisdiction determines that an Underpayment
has occurred, any such Underpayment will be paid promptly by Employer to or for the benefit of Executive
together with interest at the applicable federal rate (as defined in Section 7872(f)(2)(A) of the Code) from the
date the amount should have otherwise been paid to Executive until the payment date.
5.14
Dispute Resolution. The parties recognize that litigation in federal or state courts or before federal or state
administrative agencies of disputes arising out of the Executive’s employment with the Employer or out of this Employment Agreement,
or the Executive’s termination of employment or termination of this Employment Agreement, may not be in the best interests of either
the Executive or Employer, and may result in unnecessary costs, delays, complexities, and uncertainty. The parties agree that any dispute
between the parties arising out of or relating to the negotiation, execution, performance or termination of this Employment Agreement or
the Executive’s employment, including, but not limited to, any claim arising out of this Employment Agreement, claims under Title VII
of the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967, the
Americans with Disabilities Act of 1990, Section 1981 of the Civil Rights Act of 1966, as amended, the Family Medical Leave Act, the
Executive Retirement Income Security Act, and any similar federal, state or local law, statute, regulation, or any common law doctrine,
whether that dispute arises during or after employment, shall be settled by binding arbitration in accordance with the National Rules for
the Resolution of Employment Disputes of the American Arbitration Association; provided however, that this dispute resolution
provision shall not apply to any separate agreements between the parties that do not themselves specify arbitration as an exclusive
remedy. The location for the arbitration shall be the Philadelphia, Pennsylvania metropolitan area. Any award made by such panel shall
be final, binding and conclusive on the parties for all purposes, and judgment upon the award rendered by the arbitrators may be entered
in any court having jurisdiction thereof. The arbitrators’ fees and expenses and all administrative fees and expenses associated with the
filing of the arbitration shall be borne by Employer. The parties acknowledge and agree that their obligations to arbitrate under this
Section survive the termination of this Employment Agreement and continue after the termination of the employment relationship
between Executive and Employer. The parties each further agree that the arbitration provisions of this Employment Agreement shall
provide each party

16
with its exclusive remedy, and each party expressly waives any right it might have to seek redress in any other forum, except as
otherwise expressly provided in this Employment Agreement. By election arbitration as the means for final settlement of all claims, the
parties hereby waive their respective rights to, and agree not to, sue each other in any action in a Federal, State or local court
with respect to such claims, but may seek to enforce in court an arbitration award rendered pursuant to this Employment
Agreement. The parties specifically agree to waive their respective rights to a trial by jury, and further agree that no demand,
request or motion will be made for trial by jury.
[SIGNATURE PAGE FOLLOWS]

17
IN WITNESS WHEREOF the parties have executed this Employment Agreement as of the date first above written.
ACLARIS THERAPEUTICS, INC.
By:
/s/ Christopher Molineaux
Name:Christopher Molineaux
Title
Lead Independent Director
Agreed to and Accepted this 26th day of February, 2025.
EXECUTIVE
/s/ Neal Walker
Neal Walker

1
Exhibit 10.24
ACLARIS THERAPEUTICS, INC.
Shares of Common Stock
($0.00001 par value per share)
AMENDED AND RESTATED SALES AGREEMENT
February 27, 2025
LEERINK PARTNERS LLC
1301 Avenue of the Americas, 5th Floor
New York, New York 10019
CANTOR FITZGERALD & CO.
110 East 59th Street
New York, New York 10022
Ladies and Gentlemen:
Aclaris Therapeutics, Inc., a Delaware corporation (the “Company”), and Leerink Partners LLC and Cantor Fitzgerald & Co.,
as sales agents and/or principals (collectively the “Agents,” and each individually an “Agent”), are parties to that certain Sales
Agreement dated February 23, 2023 (the “Original Agreement”).  The Company and Agents desire to amend and restate the Original
Agreement in its entirety as set forth in this Amended and Restated Sales Agreement (this “Agreement”) and propose, subject to the
terms and conditions stated herein, to issue and sell from time to time through Agents shares of the Company’s common stock, par value
$0.00001 per share (the “Common Shares”), having an aggregate offering price of up to $100,000,000 on the terms set forth in this
Agreement.
The Company confirms this Agreement with Agents as follows:
Section 1. DEFINITIONS
(a)
Certain Definitions.  For purposes of this Agreement, capitalized terms used herein and not otherwise defined shall
have the following respective meanings:
“Affiliate” of a Person means another Person that directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such first- mentioned Person.  The term “control” (including the terms “controlling,”
“controlled by” and “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction
of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
“Agency Period” means the period commencing on the date of this Agreement and expiring on the earliest to occur of (x) the
date on which the Designated Agent shall have placed the Maximum Program Amount pursuant to this Agreement and (y) the date this
Agreement is terminated pursuant to Section 7.
“Commission” means the U.S. Securities and Exchange Commission.

2
“Designated Agent” means, as of any given time, an Agent that the Company has designated as sales agent to sell Shares
pursuant to the terms of this Agreement.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission
thereunder.
“Issuance Amount” means the aggregate Sales Price of the Shares to be sold by the Designated Agent pursuant to any Issuance
Notice.
“Issuance Notice” means a written notice delivered to the Designated Agent by the Company in accordance with this
Agreement in the form attached hereto as Exhibit A that is executed by its Chief Executive Officer, President or Chief Financial Officer.
“Issuance Notice Date” means any Trading Day during the Agency Period that an Issuance Notice is delivered pursuant to
Section 3(c)(i).  “Issuance Price” means the Sales Price less the Selling Commission.
“Maximum Program Amount” means Common Shares with an aggregate Sales Price of the lesser of (a) the number or dollar
amount of Common Shares registered under the effective Registration Statement (defined below) pursuant to which the offering is being
made, (b) the number of authorized but unissued Common Shares (less Common Shares issuable upon exercise, conversion or exchange
of any outstanding securities of the Company or otherwise reserved from the Company’s authorized capital stock), (c) the number or
dollar amount of Common Shares permitted to be sold under Form S-3 (including General Instruction I.B.6 thereof, if applicable), or (d)
the number or dollar amount of Common Shares for which the Company has filed a Prospectus (defined below).
“Person” means an individual or a corporation, partnership, limited liability company, trust, incorporated or unincorporated
association, joint venture, joint stock company, governmental authority or other entity of any kind.
“Principal Market” means the Nasdaq Global Select Market or such other national securities exchange on which the Common
Shares, including any Shares, are then listed.
“Sales Price” means the actual sale execution price of each Share placed by the Designated Agent pursuant to this Agreement.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder.
“Selling Commission” means three percent (3%) of the gross proceeds of Shares sold pursuant to this Agreement, or as
otherwise agreed between the Company and the Designated Agent with respect to any Shares sold pursuant to this Agreement.
“Settlement Date” means the first business day following each Trading Day during the period set forth in the Issuance Notice
on which Shares are sold pursuant to this Agreement, when the Company shall deliver to the Designated Agent the amount of Shares
sold on such Trading

3
Day and the Designated Agent shall deliver to the Company the Issuance Price received on such sales.
“Shares” shall mean the Company’s Common Shares issued or issuable pursuant to this Agreement.
“Trading Day” means any day on which the Principal Market is open for trading.
Section 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to, and agrees with, each Agent that as of (1) the date of this Agreement, (2) each
Issuance Notice Date, (3) each Settlement Date, (4) each Triggering Event Date and (5) as of each Time of Sale (as defined below) (each
of the times referenced above is referred to herein as a “Representation Date”), except as may be disclosed in the Prospectus (including
any documents incorporated by reference therein and any supplements thereto) on or before a Representation Date:
(a)
Registration Statement.  The Company has prepared and will file with the Commission a shelf registration statement on
Form S-3 that contains a base prospectus.  Such registration statement will register the issuance and sale by the Company of certain
securities, including the Shares, under the Securities Act.  The Company has prepared a prospectus specifically relating to the Shares (the
“ATM Prospectus”) included as part of such registration statement and shall, if necessary, prepare a prospectus supplement specifically
relating to the Shares (the “Prospectus Supplement”) to the base prospectus and/or to the ATM Prospectus included as part of such
registration statement. The Company may file one or more additional registration statements from time to time that will contain a base
prospectus and related prospectus or prospectus supplement, if applicable, with respect to the Shares.   Except where the context
otherwise requires, such registration statement(s), and any post-effective amendment thereto, as amended when it becomes effective,
including any information deemed to be a part thereof pursuant to Rule 430B or Rule 462(b) under the Securities Act, or any subsequent
registration statement on Form S-3 filed pursuant to Rule 415(a)(6) under the Securities Act by the Company to cover any Shares, and
including all financial statements, exhibits and schedules thereto and all documents incorporated or deemed to be incorporated therein by
reference pursuant to Item 12 of Form S-3 under the Securities Act as from time to time amended or supplemented, is herein referred to
as the “Registration Statement.” The base prospectus included in the Registration Statement, as it may be supplemented by the ATM
Prospectus and any Prospectus Supplement, in the form in which such prospectus, ATM Prospectus and/or Prospectus Supplement have
most recently been filed with the Commission pursuant to Rule 424(b) under the Securities Act relating to a particular issuance of the
Shares, including all documents incorporated or deemed to be incorporated therein by reference pursuant to Item 12 of Form S-3 under
the Securities Act, in each case, as from time to time amended or supplemented, together with any “issuer free writing prospectus,” as
defined in Rule 433 under the Securities Act regulations (“Rule 433”), relating to the Shares that (i) is required to be filed with the
Commission by the Company or (ii) is exempt from filing pursuant to Rule 433(d)(5)(i) under the Securities Act, in each case in the form
filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s records pursuant to
Rule 433(g) under the Securities Act, is referred to herein as the “Prospectus,” except that if any revised prospectus is provided to the
Agents by the Company for

4
use in connection with the offering of the Shares that is not required to be filed by the Company pursuant to Rule 424(b) under the
Securities Act, the term “Prospectus” shall refer to such revised prospectus from and after the time it is first provided to the Agents for
such use.  The Registration Statement at the time it originally became effective is herein called the “Original Registration Statement.”
All references in this Agreement to financial statements and schedules and other information which is “contained,” “included”
or “stated” in the Registration Statement or the Prospectus (and all other references of like import) shall be deemed to mean and include
all such financial statements and schedules and other information which is or is deemed to be incorporated by reference in or otherwise
deemed under the Securities Act to be a part of or included in the Registration Statement or the Prospectus, as the case may be, as of any
specified date; and all references in this Agreement to amendments or supplements to the Registration Statement or the Prospectus shall
be deemed to mean and include, without limitation, the filing of any document under the Exchange Act which is or is deemed to be
incorporated by reference in or otherwise deemed under the Securities Act to be a part of or included in the Registration Statement or the
Prospectus, as the case may be, as of any specified date.  The Company’s obligations under this Agreement to furnish, provide, deliver or
make available (and all other references of like import) copies of any report or statement shall be deemed satisfied if the same is filed
with the Commission through its Electronic Data Gathering, Analysis and Retrieval system (“EDGAR”) (except that, upon the Agents’
request, the Company shall provide a signed and printed copy of the Registration Statement and of any signed amendment or supplement
thereto).
At the time the Registration Statement is originally declared effective and at the time the Company’s most recent annual report
on Form 10-K is filed with the Commission, the Company will meet the then-applicable requirements for use of Form S-3 under the
Securities Act.  During the Agency Period, each time the Company files an annual report on Form 10-K the Company will meet the then-
applicable requirements for use of Form S-3 under the Securities Act.
(b)
Compliance with Registration Requirements.   Prior to the issuance of any Issuance Notice by the Company, the
Original Registration Statement will have been declared effective under the Securities Act.  The Company has complied and will comply
to the Commission’s satisfaction with all requests of the Commission for additional or supplemental information.   No stop order
suspending the effectiveness of the Registration Statement has been or shall have been issued, and no proceedings for such purpose have
been instituted or are pending or, to the knowledge of the Company, contemplated or threatened by the Commission.
The Prospectus will comply or, when filed, complied, as applicable, in all material respects with the Securities Act and, if filed
with the Commission through EDGAR (except as may be permitted by Regulation S-T under the Securities Act), was identical to the
copy thereof delivered to the Agents for use in connection with the issuance and sale of the Shares.  Each of the Registration Statement
and any post-effective amendment thereto, at the time it became effective and at all subsequent times, the Prospectus and any Free
Writing Prospectus (as defined below) considered together (collectively, the “Time of Sale Information”), as amended or supplemented,
as of its date and as of each Representation Date, did not and will not contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not
misleading.  The representations

5
and warranties set forth in the two immediately preceding sentences do not apply to statements in or omissions from the Registration
Statement or any post-effective amendment thereto, or the Prospectus, or any amendments or supplements thereto, made in reliance upon
and in conformity with information relating to the Agents furnished to the Company in writing by the Agents expressly for use therein, it
being understood and agreed that the only such information furnished by the Agents to the Company consists of the information
described in Section 6 below.  There are no contracts or other documents required to be described in the Prospectus or to be filed as
exhibits to the Registration Statement which have not been described or filed as required.  The Registration Statement and the offer and
sale of the Shares as contemplated hereby meet and will meet the requirements of Rule 415 under the Securities Act and comply and will
comply in all material respects with said rule.
(c)
Ineligible Issuer Status.   The Company is not an “ineligible issuer” in connection with the offering of the Shares
pursuant to Rules 164, 405 and 433 under the Securities Act.  Any Free Writing Prospectus that the Company is required to file pursuant
to Rule 433(d) under the Securities Act has been, or will be, filed with the Commission in accordance with the requirements of the
Securities Act.  Each Free Writing Prospectus that the Company has filed, or is required to file, pursuant to Rule 433(d) under the
Securities Act or that was prepared by or behalf of or used or referred to by the Company complies or will comply in all material respects
with the requirements of Rule 433 under the Securities Act including timely filing with the Commission or retention where required and
legending, and each such Free Writing Prospectus, as of its issue date and at all subsequent times through the completion of the issuance
and sale of the Shares did not, does not and will not include any information that conflicted, conflicts with or will conflict with the
information contained in the Registration Statement or the Prospectus, including any document incorporated by reference therein.
 Except for the Free Writing Prospectuses, if any, and electronic road shows, if any, furnished to the Agents before first use, the Company
has not prepared, used or referred to, and will not, without the Agents’ prior consent, prepare, use or refer to, any Free Writing
Prospectus.
(d)
Incorporated Documents.  The documents incorporated or deemed to be incorporated by reference in the Registration
Statement and the Prospectus, at the time they were filed with the Commission, complied in all material respects with the requirements of
the Exchange Act, as applicable, and, when read together with the other information in the Prospectus, do not contain an untrue statement
of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(e)
Exchange Act Compliance.  The documents incorporated or deemed to be incorporated by reference in the Prospectus,
at the time they were or hereafter are filed with the Commission, and any Free Writing Prospectus or amendment or supplement thereto
complied and will comply in all material respects with the requirements of the Exchange Act, and, when read together with the other
information in the Prospectus, at the time the Registration Statement and any amendments thereto become effective and at each Time of
Sale, as the case may be, will not contain an untrue statement of a material fact or omit to state a material fact required to be stated
therein or necessary to make the fact required to be stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.

6
(f)
Statistical and Market-Related Data.  The statistical, demographic and market-related data included or incorporated by
reference in the Registration Statement and the Prospectus are based on or derived from sources that the Company believes to be reliable
and accurate or represent the Company’s good faith estimates that are made on the basis of data derived from such sources.
(g)
Disclosure Controls and Procedures; Deficiencies in or Changes to Internal Control Over Financial Reporting.  The
Company has established and maintains disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)),
which (i) are designed to ensure that material information relating to the Company, including its consolidated subsidiaries, is made
known to the Company’s principal executive officer and its principal financial officer by others within those entities, particularly during
the periods in which the periodic reports required under the Exchange Act are being prepared; (ii) have been evaluated by management
of the Company for effectiveness as of the end of the Company’s most recent fiscal quarter; and (iii) are effective in all material respects
to perform the functions for which they were established.  Based on the most recent evaluation of its disclosure controls and procedures,
the Company is not aware of (i) any significant deficiencies or material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report
financial information; or (ii) any fraud, whether or not material, that involves management or other employees who have a significant
role in the Company’s internal control over financial reporting.  The Company is not aware of any change in its internal control over
financial reporting that has occurred during its most recent fiscal quarter that has materially affected, or is reasonably likely to materially
affect, the Company’s internal control over financial reporting.
(h)
Authorization of the Agreement.  This Agreement has been duly authorized, executed and delivered by, and is a valid
and binding agreement of, the Company, enforceable in accordance with its terms, except as rights to indemnification hereunder may be
limited by applicable law and except as the enforcement hereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting the rights and remedies of creditors or by general equitable principles.
(i)
Authorization of the Shares.  The Shares have been duly authorized for issuance and sale pursuant to this Agreement
and, when issued and delivered by the Company against payment therefor pursuant to this Agreement, will be validly issued, fully paid
and nonassessable, and the issuance and sale of the Shares is not subject to any preemptive rights, rights of first refusal or other similar
rights to subscribe for or purchase the Shares.
(j)
XBRL.  The interactive data in eXtensible Business Reporting Language included or incorporated by reference in the
Registration Statement and the Prospectus fairly presents the information called for in all material respects and has been prepared in
accordance with the Commission’s rules and guidelines applicable thereto.
(k)
No Applicable Registration or Other Similar Rights.  There are no persons with registration or other similar rights to
have any equity or debt securities registered for sale under the Registration Statement or included in the offering contemplated by this
Agreement, except for such rights as have been duly waived.

7
(l)
No Material Adverse Change.  Except as otherwise disclosed in the Registration Statement and Prospectus, subsequent
to the respective dates as of which information is given in the Registration Statement and Prospectus: (i) there has been no material
adverse change, or any development that could reasonably be expected to result in a material adverse change, in the condition, financial
or otherwise, or in the earnings, business, operations or prospects, whether or not arising from transactions in the ordinary course of
business, of the Company and its subsidiaries, considered as one entity (any such change is called a “Material Adverse Change”); (ii)
the Company and its subsidiaries, considered as one entity, have not incurred any material liability or obligation, indirect, direct or
contingent, not in the ordinary course of business nor entered into any material transaction or agreement not in the ordinary course of
business; and (iii) there has been no dividend or distribution of any kind declared, paid or made by the Company or, except for dividends
paid to the Company or other subsidiaries, by any of its subsidiaries on any class of capital stock or repurchase or redemption by the
Company or any of its subsidiaries of any class of capital stock.
(m)
Independent Accountants.   The independent registered public accounting firm that has expressed its opinion with
respect to the financial statements (which term as used in this Agreement includes the related notes thereto) filed with the Commission or
incorporated by reference as a part of the Registration Statement and included in the Prospectus is (i) an independent public or certified
public accountant as required by the Securities Act and the Exchange Act, (ii) in compliance with the applicable requirements relating to
the qualification of accountants under Rule 2-01 of Regulation S-X; and (iii) a registered public accounting firm as defined by the Public
Company Accounting Oversight Board (the “PCAOB”) whose registration has not been suspended or revoked and who has not
requested such registration to be withdrawn.
(n)
Preparation of the Financial Statements.   The financial statements filed with the Commission as a part of or
incorporated by reference in the Registration Statement and included in the Prospectus present fairly, in all material respects, the
consolidated financial position of the Company and its subsidiaries as of and at the dates indicated and the results of their operations and
cash flows for the periods specified.  Such financial statements have been prepared in conformity with generally accepted accounting
principles as applied in the United States (“GAAP”) applied on a consistent basis throughout the periods involved, except as may be
expressly stated in the related notes thereto and except in the case of unaudited financial statements, which are subject to normal and
recurring year-end adjustments and do not contain certain footnotes as permitted by the applicable rules of the Commission.  No other
financial statements or supporting schedules are required to be included in or incorporated in the Registration Statement or the
Prospectus.  The financial data set forth or incorporated in the Prospectus fairly present, in all material respects, the information set forth
therein on a basis consistent with that of the audited financial statements contained, incorporated or deemed to be incorporated in the
Registration Statement and the Prospectus.  To the Company’s knowledge, no person who has been suspended or barred from being
associated with a registered public accounting firm, or who has failed to comply with any sanction pursuant to Rule 5300 promulgated by
the PCAOB, has participated in or otherwise aided the preparation of, or audited, the financial statements, supporting schedules or other
financial data filed with the Commission as a part of the Registration Statement and included in the Prospectus.
(o)
Company’s Accounting System.  The Company and each of its subsidiaries make and keep accurate books and records
and maintain a system of internal accounting controls

8
sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific
authorization; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to
maintain accountability for assets; (iii) access to assets is permitted only in accordance with management’s general or specific
authorization; (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences; and (v) the interactive data in eXtensible Business Reporting Language included or incorporated by
reference in the Registration Statement and the Prospectus fairly presents the information called for in all material respects and is
prepared in accordance with the Commission’s rules and guidelines applicable thereto.
(p)
Incorporation and Good Standing of the Company.  The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware and has the power and authority (corporate or other) to own, lease
and operate its properties and to conduct its business as described in the Prospectus and to enter into and perform its obligations under
this Agreement.  The Company is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction
in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except
where the failure to so qualify or to be in good standing, individually or in the aggregate, would not reasonably be expected to result in a
Material Adverse Change.
(q)
Incorporation and Good Standing of the Company’s Subsidiaries.   Each subsidiary of the Company has been duly
incorporated or organized, as the case may be, and is validly existing as a corporation, partnership or limited liability company, as
applicable, in good standing under the laws of the jurisdiction of its incorporation or organization and has the power and authority
(corporate or other) to own, lease and operate its properties and to conduct its business as described in the Prospectus and is duly
qualified as a foreign corporation, partnership or limited liability company, as applicable, to transact business and is in good standing in
each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify or be in good standing would not reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Change.  All of the issued and outstanding capital stock or other equity or ownership interests
of each subsidiary have been duly authorized and validly issued, are fully paid and nonassessable and are owned by the Company,
directly or through subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance or adverse claim.  The
Company does not own or control, directly or indirectly, any corporation, association or other entity other than (i) the subsidiaries listed
on Exhibit 21.1 to the Company’s most recent annual report on Form 10-K and (ii) such other entities omitted from Exhibit 21.1 which,
when such omitted entities are considered in the aggregate as a single subsidiary, would not constitute a “significant subsidiary” within
the meaning of Rule 1-02(w) of Regulation S-X.
(r)
Capitalization and Other Capital Stock Matters.  The authorized, issued and outstanding capital stock of the Company
is as set forth in the Prospectus under the caption “Description of Capital Stock” (other than for subsequent issuances, if any, pursuant to
employee benefit plans described in the Prospectus or upon the exercise of outstanding options or warrants, in each case as described in
the Prospectus).  The Common Shares (including the Shares) conform in all material respects to the description thereof contained in the
Prospectus.  All of the issued and

9
outstanding Common Shares have been duly authorized and validly issued, are fully paid and nonassessable and have been issued in
compliance with federal and state securities laws.  None of the outstanding Common Shares were issued in violation of any preemptive
rights, rights of first refusal or other similar rights to subscribe for or purchase securities of the Company that have not been duly waived
or satisfied.  There are no authorized or outstanding options, warrants, preemptive rights, rights of first refusal or other rights to purchase,
or equity or debt securities convertible into or exchangeable or exercisable for, any capital stock of the Company or any of its
subsidiaries other than those accurately described in all material respects in the Prospectus.  The description of the Company’s stock
option, stock bonus and other stock plans or arrangements, and the options or other rights granted thereunder, set forth in the Prospectus
accurately and fairly presents in all material respects the information required to be shown with respect to such plans, arrangements,
options and rights.
(s)
Stock Exchange Listing.  The Company is subject to and in compliance in all material respects with the reporting
requirements of Section 13 or Section 15(d) of the Exchange Act.  The Common Shares are registered pursuant to Section 12(b) of the
Exchange Act and are listed on the Principal Market, and the Company has taken no action designed to, or reasonably likely to have the
effect of, terminating the registration of the Common Shares under the Exchange Act or delisting the Common Shares from the Principal
Market, nor has the Company received any notification that the Commission or the Principal Market is contemplating terminating such
registration or listing.
(t)
Non-Contravention of Existing Instruments; No Further Authorizations or Approvals Required.  Neither the Company
nor any of its subsidiaries is in violation of its charter or by-laws, partnership agreement or operating agreement or similar organizational
document, as applicable, or is in default (or, with the giving of notice or lapse of time, would be in default) (“Default”) under any
indenture, mortgage, loan or credit agreement, note, contract, franchise, lease or other instrument to which the Company or any of its
subsidiaries is a party or by which it or any of them may be bound (including, without limitation, any credit agreement, indenture, pledge
agreement, security agreement or other instrument or agreement evidencing, guaranteeing, securing or relating to indebtedness of the
Company or any of its subsidiaries ), or to which any of the property or assets of the Company or any of its subsidiaries is subject (each,
an “Existing Instrument”), except for such Defaults as would not, individually or in the aggregate, result in a Material Adverse Change.
 The Company’s execution, delivery and performance of this Agreement, consummation of the transactions contemplated hereby and by
each applicable Prospectus and the issuance and sale of the Shares (i) have been duly authorized by all necessary corporate action and
will not result in any violation of the provisions of the charter or by-laws, partnership agreement or operating agreement or similar
organizational document of the Company or any subsidiary, as applicable; (ii) will not conflict with or constitute a breach of, or Default
under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, or require the consent of any other party to, any Existing Instrument, except for such conflicts, breaches,
Defaults, liens, charges or encumbrances as would not, individually or in the aggregate, result in a Material Adverse Change; and (iii)
will not result in any violation of any law, administrative regulation or administrative or court decree applicable to the Company or any
subsidiary, except as would not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Change.  No
consent, approval, authorization or other order of, or registration or filing with, any court or other

10
governmental or regulatory authority or agency, is required for the Company’s execution, delivery and performance of this Agreement
and consummation of the transactions contemplated hereby and by the Prospectus, except such as have been obtained or made by the
Company and are in full force and effect under the Securities Act, applicable state securities or blue sky laws, and from the Financial
Industry Regulatory Authority (“FINRA”).
(u)
No Material Actions or Proceedings.  Except as otherwise disclosed in the Prospectus, there are no material legal or
governmental actions, suits or proceedings pending or, to the Company’s knowledge, threatened (i) against or affecting the Company or
any of its subsidiaries; (ii) which have as the subject thereof any officer or director of, or property owned or leased by, the Company or
any of its subsidiaries; or (iii) relating to environmental or discrimination matters; where in any such case (A) there is a reasonable
possibility that such action, suit or proceeding might be determined adversely to the Company, such subsidiary or such officer or director,
(B) any such action, suit or proceeding, if so determined adversely, would reasonably be expected to result in a Material Adverse Change
or adversely affect the consummation of the transactions contemplated by this Agreement or (C) any such action, suit or proceeding is or
would be material in the context of the sale of Shares. Except as otherwise disclosed in the Prospectus, no material labor dispute with the
employees of the Company or any of its subsidiaries, or with the employees of any principal supplier, manufacturer, customer or
contractor of the Company, exists or, to the Company’s knowledge, is threatened or imminent.
(v)
Intellectual Property Rights.  The Company and its subsidiaries own or possess the valid right to use all (i) patents,
patent applications, trademarks, trademark registrations, service marks, service mark registrations, Internet domain name registrations,
copyrights, copyright registrations, licenses, trade secret rights (“Intellectual Property Rights”) and (ii) inventions, software, works of
authorships, trademarks, service marks, trade names, databases, formulae, know how, Internet domain names and other intellectual
property (including trade secrets and other unpatented and/or unpatentable proprietary confidential information, systems, or procedures)
(collectively, “Intellectual Property Assets”) necessary to conduct their respective businesses described in the Prospectus, except where
the failure to own or possess the valid right to use the Intellectual Property Assets would not, individually or in the aggregate, result in a
Material Adverse Change.  The Company and its subsidiaries have not received any opinion from their legal counsel concluding that any
activities of their respective businesses infringe, misappropriate, or otherwise violate, valid and enforceable Intellectual Property Rights
of any other person.  The Company and its subsidiaries have not received written notice of any challenge, which is to their knowledge
still pending, by any other person to the rights of the Company and its subsidiaries with respect to any Intellectual Property Rights or
Intellectual Property Assets owned or used by the Company or its subsidiaries that would reasonably be expected to result in a Material
Adverse Change.  To the knowledge of the Company, the Company and its subsidiaries’ respective businesses as now conducted do not
give rise to any infringement of, any misappropriation of, or other violation of, any valid and enforceable Intellectual Property Rights of
any other person.  All licenses for the use of the Intellectual Property Rights described in the Prospectus are valid, binding upon, and
enforceable by or against the parties thereto in accordance to its terms.  The Company has complied in all material respects with, and is
not in breach nor has received any asserted or threatened claim of breach of any Intellectual Property Rights license, and the Company
has no knowledge of any breach or anticipated breach by any other person to any Intellectual Property Rights license.   Except as
described in the Prospectus, no claim has been made against the

11
Company alleging the infringement by the Company of any patent, trademark, service mark, trade name, copyright, trade secret, license
in or other intellectual property right or franchise right of any person that would reasonably be expected to result in a Material Adverse
Change.  The Company has taken all reasonable steps to protect, maintain and safeguard its Intellectual Property Rights, including the
execution of appropriate nondisclosure and confidentiality agreements.  The consummation of the transactions contemplated by this
Agreement will not result in the loss or impairment of or payment of any additional amounts with respect to, nor require the consent of
any other person in respect of, the Company’s right to own, use, or hold for use any of the Intellectual Property Rights as owned, used or
held for use in the conduct of the business as currently conducted.
(w)
All Necessary Permits, etc.  Except as otherwise disclosed in the Prospectus, the Company and each subsidiary possess
such valid and current certificates, authorizations or permits issued by the appropriate state, federal or foreign regulatory agencies or
bodies necessary for the ownership or lease of its properties or the conduct of its businesses (“Permits”) as described in the Registration,
Statement and the Prospectus, or to permit all clinical and nonclinical studies and trials conducted by or on behalf of the Company and its
subsidiaries, except where failure to so possess would not reasonably be expected to, individually or in the aggregate, result in a Material
Adverse Change; and neither the Company nor any subsidiary has received, or has any reason to believe that it will receive, any notice of
proceedings relating to the revocation or modification of, or non-compliance with, any such certificate, authorization or permit which,
singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, could result in a Material Adverse Change.
(x)
Title to Properties.  The Company and its subsidiaries have good and marketable title to all of the real and personal
property and other assets reflected as owned in the financial statements referred to in Section 2(n) above (or elsewhere in the Registration
Statement or the Prospectus), in each case free and clear of any security interests, mortgages, liens, encumbrances, equities, adverse
claims and other defects, except such as would not reasonably be expected, individually or in the aggregate, to have a Material Adverse
Change.  The real property, improvements, equipment and personal property held under lease by the Company or any of its subsidiaries
are held under valid and enforceable leases, with such exceptions as are not material and do not materially interfere with the use made or
proposed to be made of such real property, improvements, equipment or personal property by the Company or such subsidiary.
(y)
Tax Law Compliance.   The Company and its consolidated subsidiaries have filed all necessary federal, state and
foreign income, property and franchise tax returns (or have properly requested extensions thereof) and have paid all taxes required to be
paid by any of them and, if due and payable, any related or similar assessment, fine or penalty levied against any of them except as may
be being contested in good faith and by appropriate proceedings.  The Company has made adequate charges, accruals and reserves in the
applicable financial statements referred to in Section 2(n) above in respect of all federal, state and foreign income, property and franchise
taxes for all periods as to which the tax liability of the Company or any of its consolidated subsidiaries has not been finally determined.

12
(z)
Company Not an “Investment Company.”  The Company is not, and after receipt of payment for the Shares will not be,
an “investment company” within the meaning of the Investment Company Act of 1940, as amended (the “Investment Company Act”).
(aa)
Insurance.  Except as otherwise disclosed in the Prospectus, each of the Company and its subsidiaries are insured by
recognized, financially sound and reputable institutions with policies in such amounts and with such deductibles and covering such risks
as are generally deemed adequate and customary for their businesses including, but not limited to, policies covering real and personal
property owned or leased by the Company and its subsidiaries against theft, damage, destruction, acts of vandalism and earthquakes and
policies covering the Company and its subsidiaries for product liability claims and clinical trial liability claims.  The Company has no
reason to believe that it or any subsidiary will not be able (i) to renew its existing insurance coverage as and when such policies expire;
or (ii) to obtain comparable coverage from similar institutions as may be necessary or appropriate to conduct its business as now
conducted and at a cost that would not result in a Material Adverse Change.  Neither of the Company nor any subsidiary has been denied
any insurance coverage which it has sought or for which it has applied.
(bb)
No Price Stabilization or Manipulation; Compliance with Regulation M.   Neither the Company nor any of its
subsidiaries has taken, directly or indirectly, any action designed to or that would reasonably be expected to cause or result in
stabilization or manipulation of the price of the Common Shares or any other “reference security” (as defined in Rule 100 of Regulation
M under the Exchange Act (“Regulation M”)), whether to facilitate the sale or resale of the Shares or otherwise, and has taken no action
which would directly or indirectly violate Regulation M.  The Company acknowledges that the Agents may engage in passive market
making transactions in the Shares on the Principal Market in accordance with Regulation M.  The Common Shares are “actively traded
securities” (as defined in Regulation M).
(cc)
Related Party Transactions.  There are no business relationships or related-party transactions involving the Company or
any of its subsidiaries or any other person required to be described in the Prospectus which have not been described as required.
(dd)
FINRA Matters.  All of the information provided to the Agents or to counsel for the Agents by the Company, its
officers and directors and the holders of any securities (debt or equity) or options to acquire any securities of the Company in connection
with letters, filings or other supplemental information provided to FINRA pursuant to FINRA Rules 5110, 5190 and 5121 is true,
complete and correct.  The Company meets the definition of an “experienced issuer” as specified in FINRA Rule 5110(j)(6).  Neither the
Company nor any of its Affiliates directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under
common control with, or is a person associated with any member firm of FINRA.
(ee)
No Unlawful Contributions or Other Payments.  Except as otherwise disclosed in the Prospectus, neither the Company
nor any of its subsidiaries nor, to the Company’s knowledge, any employee or agent of the Company or any subsidiary, has made any
contribution or other payment to any official of, or candidate for, any federal, state or foreign office in violation of any law or of the
character required to be disclosed in the Registration Statement and the Prospectus.

13
(ff)
Compliance with Environmental Laws.  Except as otherwise described in the Prospectus, and except as would not,
individually or in the aggregate, result in a Material Adverse Change (i) neither the Company nor any of its subsidiaries is in violation of
any federal, state, local or foreign law or regulation relating to pollution or protection of human health or the environment (including,
without limitation, ambient air, surface water, groundwater, land surface or subsurface strata) or wildlife, including without limitation,
laws and regulations relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, wastes,
toxic substances, hazardous substances, petroleum and petroleum products (collectively, “Materials of Environmental Concern”), or
otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Materials of
Environmental Concern (collectively, “Environmental Laws”), which violation includes, but is not limited to, noncompliance with any
permits or other governmental authorizations required for the operation of the business of the Company or its subsidiaries under
applicable Environmental Laws, or noncompliance with the terms and conditions thereof, nor has the Company or any of its subsidiaries
received any written communication, whether from a governmental authority, citizens group, employee or otherwise, that alleges that the
Company or any of its subsidiaries is in violation of any Environmental Law; (ii) there is no claim, action or cause of action filed with a
court or governmental authority, no investigation with respect to which the Company has received written notice, and no written notice
by any person or entity alleging potential liability for investigatory costs, cleanup costs, governmental responses costs, natural resources
damages, property damages, personal injuries, attorneys’ fees or penalties arising out of, based on or resulting from the presence, or
release into the environment, of any Material of Environmental Concern at any location owned, leased or operated by the Company or
any of its subsidiaries, now or in the past (collectively, “Environmental Claims”), pending or, to the Company’s knowledge, threatened
against the Company or any of its subsidiaries or any person or entity whose liability for any Environmental Claim the Company or any
of its subsidiaries has retained or assumed either contractually or by operation of law; and (iii) to the Company’s knowledge, there are no
past or present actions, activities, circumstances, conditions, events or incidents, including, without limitation, the release, emission,
discharge, presence or disposal of any Material of Environmental Concern, that reasonably could result in a violation of any
Environmental Law or form the basis of a potential Environmental Claim against the Company or any of its subsidiaries or against any
person or entity whose liability for any Environmental Claim the Company or any of its subsidiaries has retained or assumed either
contractually or by operation of law.
(gg)
ERISA Compliance.   The Company and its subsidiaries and any “employee benefit plan” (as defined under the
Employee Retirement Income Security Act of 1974, as amended, and the regulations and published interpretations thereunder
(collectively, “ERISA”)) established or maintained by the Company, its subsidiaries or their “ERISA Affiliates” (as defined below), are
in compliance in all material respects with ERISA.  “ERISA Affiliate” means, with respect to the Company or any of its subsidiaries, any
member of any group of organizations described in Sections 414(b), (c), (m) or (o) of the Internal Revenue Code of 1986, as amended,
and the regulations and published interpretations thereunder (the “Code”) of which the Company or such subsidiary is a member.  No
“reportable event” (as defined under ERISA) has occurred or is reasonably expected to occur with respect to any “employee benefit
plan” established or maintained by the Company, its subsidiaries or any of their ERISA Affiliates.  Except as would not reasonably be
expected, individually or in the aggregate, to result in a Material Adverse Change, no “employee benefit plan” established or maintained
by the Company, its subsidiaries

14
or any of their ERISA Affiliates, if such “employee benefit plan” were terminated, would have any “amount of unfunded benefit
liabilities” (as defined under ERISA).  Neither the Company, its subsidiaries nor any of their ERISA Affiliates has incurred or reasonably
expects to incur any liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any “employee benefit plan”
or (ii) Sections 412, 4971, 4975 or 4980B of the Code.  Each employee benefit plan established or maintained by the Company, its
subsidiaries or any of their ERISA Affiliates that is intended to be qualified under Section 401(a) of the Code is so qualified and nothing
has occurred, whether by action or failure to act, which would cause the loss of such qualification.
(hh)
Brokers.  Except for the Agents, there is no broker, finder or other party that is entitled to receive from the Company
any brokerage or finder’s fee or other fee or commission as a result of any transactions contemplated by this Agreement.
(ii)
No Outstanding Loans or Other Extensions of Credit.  Except as described in the Prospectus, there are no outstanding
loans, advances (except normal advances for business expenses in the ordinary course of business) or guarantees or indebtedness by the
Company to or for the benefit of any of the officers or directors of the Company or any of the immediate family members of any of them.
(jj)
Compliance with Laws.  The Company has not been advised, and has no reason to believe, that it and each of its
subsidiaries are not conducting business in compliance with all applicable laws, rules and regulations of the jurisdictions in which it is
conducting business, except where failure to be so in compliance would not be reasonably expected to result in a Material Adverse
Change.
(kk)
Dividend Restrictions.  Except as disclosed in the Prospectus, no subsidiary of the Company is prohibited or restricted,
directly or indirectly, from paying dividends to the Company, or from making any other distribution with respect to such subsidiary’s
equity securities or from repaying to the Company or any other subsidiary of the Company any amounts that may from time to time
become due under any loans or advances to such subsidiary from the Company or from transferring any property or assets to the
Company or to any other subsidiary.
(ll)
Anti-Corruption and Anti-Bribery Laws.  Neither the Company nor any of its subsidiaries nor, to the knowledge of the
Company, any director, officer, agent, employee, affiliate or other person acting on behalf of the Company or any of its subsidiaries has,
in the course of its actions for, or on behalf of, the Company or any of its subsidiaries (i) used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expenses relating to political activity; (ii) made or taken any act in furtherance of an
offer, promise, or authorization of any direct or indirect unlawful payment or benefit to any foreign or domestic government official or
employee, including of any government-owned or controlled entity or public international organization, or any political party, party
official, or candidate for political office; (iii) violated or is in violation of any provision of the U.S.  Foreign Corrupt Practices Act of
1977, as amended (the “FCPA”), the UK Bribery Act 2010, or any other applicable anti-bribery or anti-corruption law; or (iv) made,
offered, authorized, requested, or taken an act in furtherance of any unlawful bribe, rebate, payoff, influence payment, kickback or other
unlawful payment or benefit.  The Company and its subsidiaries and, to the knowledge of the Company, the Company’s affiliates

15
have conducted their respective businesses in compliance with the FCPA and have instituted and maintain policies and procedures
designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.
(mm)
Money Laundering Laws.  The operations of the Company and its subsidiaries are, and have been conducted at all
times, in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions
Reporting Act of 1970, as amended, the money laundering statutes of all applicable jurisdictions, the rules and regulations thereunder
and any related or similar applicable rules, regulations or guidelines, issued, administered or enforced by any governmental agency
(collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is
pending or, to the knowledge of the Company, threatened.
(nn)
Clinical Studies.  The preclinical tests and clinical trials, and other studies (collectively, “studies”) conducted by or on
behalf of or sponsored by the Company or any of its subsidiaries or in which the Company or any of its subsidiaries or their products or
product candidates have participated were and, if still pending, are being conducted in all material respects in accordance with the
protocols, procedures and controls designed and approved for such studies and all applicable laws and regulations, including, without
limitation, 21 C.F.R. Parts 50, 54, 56, 58, 312 and 812; each description of the results of such studies is accurate and complete in all
material respects and fairly presents the data derived from such studies, and the Company and its subsidiaries have no knowledge of any
other studies the results of which are inconsistent with, or otherwise call into question, the results described or referred to in the
Registration Statement or the Prospectus; no investigational new drug application filed by or on behalf of the Company or any of its
subsidiaries with the U.S. Food and Drug Administration (“FDA”) has been terminated or suspended by the FDA, and neither the FDA
nor any applicable foreign regulatory agency has commenced, or, to the knowledge of the Company, threatened to initiate, any action to
place a clinical hold order on, or otherwise terminate, delay or suspend, any proposed or ongoing studies conducted or proposed to be
conducted by or on behalf of the Company or any of its subsidiaries; the Company and its subsidiaries have made all such filings and
hold all such Permits for the operation of its business required by the FDA or any committee thereof or from any other U.S. or foreign
government or drug or medical device regulatory agency, or health care facility Institutional Review Board (collectively, the
“Regulatory Agencies”); and the Company and its subsidiaries have fulfilled and performed all of their material obligations with respect
to such Permits, and no event has occurred which allows, or after notice or lapse of time would allow, revocation or termination thereof
or results in any other material impairment of the rights of the holder of any such Permit.
(oo)
Compliance with Health Care Laws.  The Company and its subsidiaries are, and at all times have been, in compliance
in all respects with all applicable Health Care Laws, and have not engaged in activities which are, as applicable, cause for false claims
liability, civil penalties, or mandatory or permissive exclusion from Medicare, Medicaid, or any other state health care program or federal
health care program, except as would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Change.
  For purposes of this Agreement, “Health Care Laws” means: (i) the Federal Food, Drug, and Cosmetic Act and the regulations
promulgated thereunder; (ii) all applicable federal, state, local and all applicable foreign health care related fraud

16
and abuse laws, including, without limitation, the U.S.  Anti-Kickback Statute (42 U.S.C. Section 1320a-7b(b)), the U.S. Physician
Payments Sunshine Act (42 U.S.C. § 1320a-7h), the U.S. Civil False Claims Act (31 U.S.C. Section 3729 et seq.), the criminal False
Claims Law (42 U.S.C. § 1320a-7b(a)), all criminal laws relating to health care fraud and abuse, including but not limited to 18 U.S.C.
Sections 286 and 287, and the health care fraud criminal provisions under the U.S. Health Insurance Portability and Accountability Act
of 1996 (“HIPAA”) (42 U.S.C. Section 1320d et seq.), the exclusions law (42 U.S.C. § 1320a-7), the civil monetary penalties law (42
U.S.C. § 1320a-7a), HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (42 U.S.C.
Section 17921 et seq.) (“HITECH”), and the regulations promulgated pursuant to such statutes; (iii) Medicare (Title XVIII of the Social
Security Act); (iv) Medicaid (Title XIX of the Social Security Act); and (v) any and all other applicable health care laws and regulations.
 Neither the Company nor any of its subsidiaries have received notice of any claim, action, suit, proceeding, hearing, enforcement, audit,
investigation, arbitration or other action from any court or arbitrator or governmental or regulatory authority or third party alleging that
any product operation or activity is in material violation of any Health Care Laws, and, to the Company’s knowledge, no such claim,
action, suit, proceeding, hearing, enforcement, audit, investigation, arbitration or other action is threatened.  Neither the Company nor
any of its subsidiaries are a party to or have any ongoing reporting obligations pursuant to any corporate integrity agreements, deferred
prosecution agreements, monitoring agreements, consent decrees, settlement orders, plans of correction or similar agreements with or
imposed by any Regulatory Agency or other governmental or regulatory authority.  Additionally, neither the Company nor any of its
subsidiaries, nor any of their respective employees, officers or directors has been excluded, suspended or debarred from participation in
any U.S. federal health care program or human clinical research or, to the knowledge of the Company, is subject to a governmental
inquiry, investigation, proceeding, or other similar action that could reasonably be expected to result in debarment, suspension, or
exclusion.
(pp)
[Reserved.]
(qq)
Sanctions.  Neither the Company nor any of its subsidiaries, directors, officers, or employees, nor, to the knowledge of
the Company, after due inquiry, any agent, affiliate or other person acting on behalf of the Company or any of its subsidiaries is currently
the subject or the target of any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the
Treasury (“OFAC”) or the U.S. Department of State, the United Nations Security Council, the European Union, His Majesty’s Treasury
of the United Kingdom, or other relevant sanctions authority (collectively, “Sanctions”); nor is the Company or any of its subsidiaries
located, organized or resident in a country or territory that is the subject or the target of Sanctions, currently, the so-called Donetsk
People’s Republic, the so-called Luhansk People’s Republic, the non-government controlled areas of the Zaporizhzhia and Kherson
Regions, Cuba, Iran, North Korea or Syria (collectively, “Sanctioned Countries” and each, a “Sanctioned Country”); and the
Company will not directly or indirectly use the proceeds of this offering, or lend, contribute or otherwise make available such proceeds to
any subsidiary, or any joint venture partner or other person or entity, for the purpose of financing the activities of or business with any
person, or in any country or territory, that at the time of such financing, is the subject or the target of Sanctions or in any other manner
that will result in a violation by any person (including any person participating in the transaction whether as underwriter, advisor,
investor or otherwise) of applicable Sanctions.  For the past five years, the Company and its subsidiaries have not knowingly

17
engaged in and are not now knowingly engaged in any dealings or transactions with any person that at the time of the dealing or
transaction is or was the subject or the target of Sanctions or with any Sanctioned Country.
(rr)
Sarbanes-Oxley.   The Company is in compliance, in all material respects, with all applicable provisions of the
Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations promulgated thereunder.
(ss)
Duties, Transfer Taxes, Etc.   No stamp or other issuance or transfer taxes or duties and no capital gains, income,
withholding or other taxes are payable by the Agents in the United States or any political subdivision or taxing authority thereof or
therein in connection with the execution, delivery or performance of this Agreement by the Company or the sale and delivery by the
Company of the Shares.
(tt)
Cybersecurity.  To the Company’s knowledge, the Company and its subsidiaries’ information technology assets and
equipment, computers, systems, networks, hardware, software, websites, applications, and databases (collectively, “IT Systems”) are
adequate for, and operate and perform in all material respects as required in connection with the operation of the business of the
Company and its subsidiaries as currently conducted, free and clear of all material bugs, errors, defects, Trojan horses, time bombs,
malware and other corruptants.  The Company and its subsidiaries have implemented and maintained commercially reasonable physical,
technical and administrative controls, policies, procedures, and safeguards to maintain and protect their material confidential information
and the integrity, continuous operation, redundancy and security of all IT Systems and data, including “Personal Data,” used in
connection with their businesses.  “Personal Data” means (i) a natural person’s name, street address, telephone number, e-mail address,
photograph, social security number or tax identification number, driver’s license number, passport number, credit card number, bank
information, or customer or account number; (ii) any information which would qualify as “personally identifying information” under the
Federal Trade Commission Act, as amended; (iii) if applicable to the Company, “personal data” as defined by GDPR (as defined below);
(iv) if applicable to the Company, any information which would qualify as “protected health information” under HIPAA, as amended by
HITECH; and (v) any other piece of information that allows the identification of such natural person, or his or her family, or permits the
collection or analysis of any data related to an identified person’s health or sexual orientation.  To the Company’s knowledge, there have
been no breaches, violations, outages or unauthorized uses of or accesses to same, except for those that have been remedied without
material cost or liability or the duty to notify any other person, and there are no incidents under internal review or investigations relating
to the same.   The Company and its subsidiaries are presently in material compliance with all applicable laws or statutes and all
judgments, orders, rules and regulations of any court or arbitrator or governmental or regulatory authority, internal policies and
contractual obligations relating to the privacy and security of IT Systems and Personal Data and to the protection of such IT Systems and
Personal Data from unauthorized use, access, misappropriation or modification.
(uu)
Compliance with Data Privacy Laws.  The Company and its subsidiaries are, and at all prior times were, in material
compliance with all applicable state and federal data privacy and security laws and regulations, including without limitation HIPAA as
amended by HITECH, and the Company and its subsidiaries have taken commercially reasonable actions to prepare to

18
comply with, and since May 25, 2018, have been and currently are in compliance with, the European Union General Data Protection
Regulation (“GDPR”) (EU 2016/679) (collectively, the “Privacy Laws”) in all material respects.  To ensure compliance with the Privacy
Laws, the Company and its subsidiaries have in place, comply with, and take appropriate steps reasonably designed to ensure compliance
in all material respects with their policies and procedures relating to data privacy and security and the collection, storage, use, disclosure,
handling, and analysis of Personal Data (the “Policies”).  The Company and its subsidiaries have at all times made all disclosures to users
or customers required by applicable laws and regulatory rules or requirements, and none of such disclosures made or contained in any
Policy have, to the knowledge of the Company, been inaccurate or in violation of any applicable laws and regulatory rules or
requirements in any material respect.  The Company further certifies that neither it nor any subsidiary: (i) has received notice of any
actual or potential liability under or relating to, or actual or potential violation of, any of the Privacy Laws, and has no knowledge of any
event or condition that would reasonably be expected to result in any such notice; (ii) is currently conducting or paying for, in whole or in
part, any investigation, remediation, or other corrective action pursuant to any Privacy Law; or (iii) is a party to any order, decree, or
agreement that imposes any obligation or liability under any Privacy Law.
(vv)
No Reliance.   The Company has not relied upon the Agents or the Agents’ legal counsel for any legal, tax or
accounting advice in connection with the offering and sale of the Shares.
(ww)
Other Underwriting Agreements.  The Company is not a party to any agreement with an agent or underwriter for any
other “at the market” or continuous equity transaction.
Any certificate signed by any officer or representative of the Company or any of its subsidiaries and delivered to the Agents or
their counsel in connection with an issuance of Shares shall be deemed a representation and warranty by the Company to the Agents as to
the matters covered thereby on the date of such certificate.
The Company acknowledges that the Agents and, for purposes of the opinions to be delivered pursuant to Section 4(p) hereof,
counsel to the Company and counsel to the Agents, will rely upon the accuracy and truthfulness of the foregoing representations and
hereby consents to such reliance.
Section 3. ISSUANCE AND SALE OF COMMON SHARES
(a)
Sale of Securities.  On the basis of the representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company and the Designated Agent agree that the Company may from time to time seek to sell
Shares through the Designated Agent, acting as sales agent, or directly to the Designated Agent, acting as principal, as follows, with an
aggregate Sales Price of up to the Maximum Program Amount, based on and in accordance with Issuance Notices as the Company may
deliver, during the Agency Period.
(b)
Sales through Agents.  With respect to the offering and sale of Shares pursuant to this Agreement, the Company agrees
that any offer to sell Shares, any solicitation of an offer to buy Shares, and any sales of Shares shall only be effected by or through a
single Agent on any

19
single given day, and the Company shall in no event request that more than one Agent offer or sell Shares pursuant to this Agreement on
the same day.
(c)
Mechanics of Issuances.
(i)
Issuance Notice.  Upon the terms and subject to the conditions set forth herein, on any Trading Day during the Agency
Period on which the conditions set forth in Section 5(a) and Section 5(b) shall have been satisfied, the Company may exercise its right to
request an issuance of Shares by delivering to the Designated Agent an Issuance Notice; provided, however, that (A) in no event may the
Company deliver an Issuance Notice to the extent that (I) the sum of (x) the aggregate Sales Price of the requested Issuance Amount,
plus (y) the aggregate Sales Price of all Shares issued under all previous Issuance Notices effected pursuant to this Agreement, would
exceed the Maximum Program Amount; and (B) prior to delivery of any Issuance Notice, the period set forth for any previous Issuance
Notice shall have expired or been terminated.  An Issuance Notice shall be considered delivered on the Trading Day that it is received by
e-mail to the persons set forth in Schedule A hereto for such Designated Agent and confirmed by the Company by telephone (including a
voicemail message to the persons so identified), with the understanding that, with adequate prior written notice, the Designated Agent
may modify the list of such persons from time to time.
(ii)
Designated Agent Efforts.  Upon the terms and subject to the conditions set forth in this Agreement, upon the receipt of
an Issuance Notice, the Designated Agent will use its commercially reasonable efforts consistent with its normal sales and trading
practices to place the Shares with respect to which the Designated Agent has agreed to act as sales agent, subject to, and in accordance
with the information specified in, the Issuance Notice, unless the sale of the Shares described therein has been suspended, cancelled or
otherwise terminated in accordance with the terms of this Agreement.   For the avoidance of doubt, the Designated Agent and the
Company may modify an Issuance Notice at any time provided they both agree in writing to any such modification.
(iii)
Method of Offer and Sale.  The Shares may be offered and sold (A) in privately negotiated transactions with the
consent of the Company; (B) as block transactions; or (C) by any other method permitted by law deemed to be an “at the market
offering” as defined in Rule 415(a) (4) under the Securities Act, including sales made directly on the Principal Market or sales made into
any other existing trading market of the Common Shares.  Nothing in this Agreement shall be deemed to require any party to agree to the
method of offer and sale specified in the preceding sentence, and (except as specified in clauses (A) and (B) above) the method of
placement of any Shares by the Designated Agent shall be at the Designated Agent’s discretion.
(iv)
Confirmation to the Company.   If acting as sales agent hereunder, the Designated Agent will provide written
confirmation to the Company no later than the opening of the Trading Day next following the Trading Day on which it has placed Shares
hereunder setting forth the number of shares sold on such Trading Day, the corresponding Sales Price and the Issuance Price payable to
the Company in respect thereof.
(v)
Settlement.  Each issuance of Shares will be settled on the applicable Settlement Date for such issuance of Shares and,
subject to the provisions of Section 5, on or before each

20
Settlement Date, the Company will, or will cause its transfer agent to, electronically transfer the Shares being sold by crediting the
Designated Agent or its designee’s account at The Depository Trust Company through its Deposit/Withdrawal At Custodian (DWAC)
System, or by such other means of delivery as may be mutually agreed upon by the Designated Agent and the Company and, upon
receipt of such Shares, which in all cases shall be freely tradable, transferable, registered shares in good deliverable form, the Designated
Agent will deliver, by wire transfer of immediately available funds, the related Issuance Price in same day funds delivered to an account
designated by the Company prior to the Settlement Date.  The Company may sell Shares to the Designated Agent as principal at a price
agreed upon at each relevant time Shares are sold pursuant to this Agreement (each, a “Time of Sale”).
(vi)
Suspension or Termination of Sales.   Consistent with standard market settlement practices, the Company or the
Designated Agent may, upon notice to the other party in writing or by telephone (confirmed immediately by verifiable email), suspend
any sale of Shares, and the period set forth in an Issuance Notice shall immediately terminate; provided, however, that (A) such
suspension and termination shall not affect or impair either party’s obligations with respect to any Shares placed or sold hereunder prior
to the receipt of such notice; (B) if the Company suspends or terminates any sale of Shares after the Designated Agent confirms such sale
to the Company, the Company shall still be obligated to comply with Section 3(c)(v) with respect to such Shares; and (C) if the Company
defaults in its obligation to deliver Shares on a Settlement Date, the Company agrees that it will hold the Designated Agent harmless
against any loss, claim, damage or expense (including, without limitation, penalties, interest and reasonable legal fees and expenses), as
incurred, arising out of or in connection with such default by the Company.   The parties hereto acknowledge and agree that, in
performing its obligations under this Agreement, the Designated Agent may borrow Common Shares from stock lenders in the event that
the Company has not delivered Shares to settle sales as required by subsection (v) above, and may use the Shares to settle or close out
such borrowings.  The Company agrees that no such notice shall be effective against the Designated Agent unless it is made to the
persons identified in writing by the Designated Agent pursuant to Section 3(c)(i).
(vii)
No Guarantee of Placement, Etc.  The Company acknowledges and agrees that (A) there can be no assurance that the
Designated Agent will be successful in placing Shares; (B) the Designated Agent will incur no liability or obligation to the Company or
any other Person if it does not sell Shares; and (C) the Designated Agent shall be under no obligation to purchase Shares on a principal
basis pursuant to this Agreement, except as otherwise specifically agreed by the Designated Agent and the Company.
(viii)
Material Non-Public Information.   Notwithstanding any other provision of this Agreement, the Company and the
Agents agree that the Company shall not deliver any Issuance Notice to the Agents, and the Agents shall not be obligated to place any
Shares, during any period in which the Company is in possession of material non-public information.
(d)
Fees.  As compensation for services rendered, the Company shall pay to the Designated Agent, on the applicable
Settlement Date, the Selling Commission for the applicable Issuance Amount (including with respect to any suspended or terminated sale
pursuant to Section 3(c)(vi)) by the Designated Agent deducting the Selling Commission from the applicable Issuance Amount.

21
(e)
Expenses.  The Company agrees to pay all costs, fees and expenses incurred in connection with the performance of its
obligations hereunder and in connection with the transactions contemplated hereby, including without limitation (i) all expenses incident
to the issuance and delivery of the Shares (including all printing and engraving costs); (ii) all fees and expenses of the registrar and
transfer agent of the Shares; (iii) all necessary issue, transfer and other stamp taxes in connection with the issuance and sale of the
Shares; (iv) all fees and expenses of the Company’s counsel, independent public or certified public accountants and other advisors; (v) all
costs and expenses incurred in connection with the preparation, printing, filing, shipping and distribution of the Registration Statement
(including financial statements, exhibits, schedules, consents and certificates of experts), the Prospectus, any Free Writing Prospectus (as
defined below) prepared by or on behalf of, used by, or referred to by the Company, and all amendments and supplements thereto, and
this Agreement; (vi) all filing fees, attorneys’ fees and expenses incurred by the Company or the Agents in connection with qualifying or
registering (or obtaining exemptions from the qualification or registration of) all or any part of the Shares for offer and sale under the
state securities or blue sky laws or the provincial securities laws of Canada, and, if requested by the Agents, preparing and printing a
“Blue Sky Survey” or memorandum and a “Canadian wrapper”, and any supplements thereto, advising the Agents of such
qualifications, registrations, determinations and exemptions; (vii) the reasonable fees and disbursements of the Agents’ counsel,
including the reasonable fees and expenses of counsel for the Agents in connection with, FINRA review, if any, and approval of the
Agents’ participation in the offering and distribution of the Shares; (viii) the filing fees incident to FINRA review, if any; and (ix) the
fees and expenses associated with listing the Shares on the Principal Market.  The fees and disbursements of Agents’ counsel pursuant to
subsections (vi) and (vii) above shall not exceed $75,000 in connection with the execution of this Agreement and shall not exceed
$25,000 in connection with any Triggering Event Date that occurs pursuant to the filing by the Company of an Annual Report on Form
10-K and $15,000 in connection with any Triggering Event Date that occurs pursuant to the filing by the Company of a Quarterly Report
on Form 10-Q for any fiscal quarter during which an Issuance Notice is in effect.
Section 4. ADDITIONAL COVENANTS
The Company covenants and agrees with the Agents as follows, in addition to any other covenants and agreements made
elsewhere in this Agreement:
(a)
Exchange Act Compliance.   During the Agency Period, the Company shall (i) file, on a timely basis, with the
Commission all reports and documents required to be filed under Section 13, 14 or 15 of the Exchange Act in the manner and within the
time periods required by the Exchange Act; and (ii) either (A) include in its quarterly reports on Form 10-Q and its annual reports on
Form 10-K, a summary detailing, for the relevant reporting period, (1) the number of Shares sold through the Agents pursuant to this
Agreement and (2) the net proceeds received by the Company from such sales or (B) prepare a prospectus supplement containing, or
include in such other filing permitted by the Securities Act or Exchange Act (each an “Interim Prospectus Supplement”), such
summary information and, at least once a quarter and subject to this Section 4, file such Interim Prospectus Supplement pursuant to Rule
424(b) under the Securities Act (and within the time periods required by Rule 424(b) and Rule 430B under the Securities Act).

22
(b)
Securities Act Compliance.  After the date of this Agreement, the Company shall promptly advise the Agents in writing
(i) of the receipt of any comments of, or requests for additional or supplemental information from, the Commission; (ii) of the time and
date of any filing of any post-effective amendment to the Registration Statement or any amendment or supplement to the Prospectus, any
Free Writing Prospectus; (iii) of the time and date that any post-effective amendment to the Registration Statement becomes effective;
and (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or any post-
effective amendment thereto or any amendment or supplement to the Prospectus or of any order preventing or suspending the use of any
Free Writing Prospectus or the Prospectus, or of any proceedings to remove, suspend or terminate from listing or quotation the Common
Shares from any securities exchange upon which they are listed for trading or included or designated for quotation, or of the threatening
or initiation of any proceedings for any of such purposes.  If the Commission shall enter any such stop order at any time, the Company
will use its reasonable efforts to obtain the lifting of such order as soon as practicable.  Additionally, the Company agrees that it shall
comply with the provisions of Rule 424(b) and Rule 433, as applicable, under the Securities Act and will use its reasonable efforts to
confirm that any filings made by the Company under such Rule 424(b) or Rule 433 were received in a timely manner by the
Commission.
(c)
Amendments and Supplements to the Prospectus and Other Securities Act Matters.   If any event shall occur or
condition exist as a result of which it is necessary to amend or supplement the Prospectus so that the Prospectus does not include an
untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not misleading, or if in the opinion of the Agents or their counsel it is
otherwise necessary to amend or supplement the Prospectus to comply with applicable law, including the Securities Act, the Company
agrees (subject to Section 4(d) and 4(f)) to promptly prepare, file with the Commission and furnish at its own expense to the Agents,
amendments or supplements to the Prospectus so that the statements in the Prospectus as so amended or supplemented will not include an
untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be misleading or so that the Prospectus, as amended or supplemented, will
comply with applicable law including the Securities Act.   Neither the Agents’ consent to, or delivery of, any such amendment or
supplement shall constitute a waiver of any of the Company’s obligations under Sections 4(d) and 4(f).
(d)
Agents’ Review of Proposed Amendments and Supplements.  Prior to amending or supplementing the Registration
Statement or the Prospectus (excluding any amendment or supplement through incorporation of any report filed under the Exchange
Act), the Company shall furnish to the Agents for review, a reasonable amount of time prior to the proposed time of filing or use thereof,
a copy of each such proposed amendment or supplement, and, if such proposed amendment or supplement relates to the matters
contemplated by this Agreement, the Company shall not file or use any such proposed amendment or supplement without the Agents’
prior consent, and to file with the Commission within the applicable period specified in Rule 424(b) under the Securities Act any
prospectus required to be filed pursuant to such Rule.
(e)
Use of Free Writing Prospectus.  Neither the Company nor either Agent has prepared, used, referred to or distributed,
or will prepare, use, refer to or distribute, without the other party’s prior written consent, any “written communication” that constitutes a
“free writing

23
prospectus” as such terms are defined in Rule 405 under the Securities Act with respect to the offering contemplated by this Agreement
(any such free writing prospectus being referred to herein as a “Free Writing Prospectus”).
(f)
Free Writing Prospectuses.  The Company shall furnish to the Agents for review, a reasonable amount of time prior to
the proposed time of filing or use thereof, a copy of each proposed free writing prospectus or any amendment or supplement thereto to be
prepared by or on behalf of, used by, or referred to by the Company and the Company shall not file, use or refer to any proposed free
writing prospectus or any amendment or supplement thereto without the Agents’ consent.  The Company shall furnish to the Agents,
without charge, as many copies of any free writing prospectus prepared by or on behalf of, or used by the Company, as the Agents may
reasonably request.  If at any time when a prospectus is required by the Securities Act (including, without limitation, pursuant to Rule
173(d)) to be delivered in connection with sales of the Shares (but in any event if at any time through and including the date of this
Agreement) there occurred or occurs an event or development as a result of which any free writing prospectus prepared by or on behalf
of, used by, or referred to by the Company conflicted or would conflict with the information contained in the Registration Statement or
included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances prevailing at that subsequent time, not misleading, the Company shall
promptly amend or supplement such free writing prospectus to eliminate or correct such conflict or so that the statements in such free
writing prospectus as so amended or supplemented will not include an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the circumstances prevailing at such subsequent time, not misleading, as
the case may be; provided, however, that prior to amending or supplementing any such free writing prospectus, the Company shall
furnish to the Agents for review, a reasonable amount of time prior to the proposed time of filing or use thereof, a copy of such proposed
amended or supplemented free writing prospectus and the Company shall not file, use or refer to any such amended or supplemented free
writing prospectus without the Agents’ consent.
(g)
Filing of Agent Free Writing Prospectuses.  The Company shall not take any action that would result in the Agents or
the Company being required to file with the Commission pursuant to Rule 433(d) under the Securities Act a free writing prospectus
prepared by or on behalf of the Agents that the Agents otherwise would not have been required to file thereunder.
(h)
Copies of Registration Statement and Prospectus.   After the date of this Agreement through the last time that a
prospectus is required by the Securities Act (including, without limitation, pursuant to Rule 173(d)) to be delivered by the Designated
Agent in connection with sales of the Shares, the Company agrees to furnish the Agents with copies (which may be electronic copies) of
the Registration Statement and each amendment thereto, and with copies of the Prospectus and each amendment or supplement thereto in
the form in which it is filed with the Commission pursuant to the Securities Act or Rule 424(b) under the Securities Act, both in such
quantities as the Agents may reasonably request from time to time; and, if the delivery of a prospectus is required under the Securities
Act or under the blue sky or securities laws of any jurisdiction at any time on or prior to the applicable Settlement Date for any period set
forth in an Issuance Notice in connection with the offering or sale of the Shares and if at such time any event has occurred as a result of
which the Prospectus as then amended or supplemented would include

24
an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made when such Prospectus is delivered, not misleading, or, if for any other reason it is
necessary during such same period to amend or supplement the Prospectus or to file under the Exchange Act any document incorporated
by reference in the Prospectus in order to comply with the Securities Act or the Exchange Act, to notify the Agents and to request that
the Designated Agent suspend offers to sell Shares (and, if so notified, the Designated Agent shall cease such offers as soon as
practicable); and if the Company decides to amend or supplement the Registration Statement or the Prospectus as then amended or
supplemented, to advise the Designated Agent promptly by telephone (with confirmation in writing) and to prepare and cause to be filed
promptly with the Commission an amendment or supplement to the Registration Statement or the Prospectus as then amended or
supplemented that will correct such statement or omission or effect such compliance; provided, however, that if during such same period
the Designated Agent is required to deliver a prospectus in respect of transactions in the Shares, the Company shall promptly prepare and
file with the Commission such an amendment or supplement.
(i)
Blue Sky Compliance.  The Company shall cooperate with the Agents and counsel for the Agents to qualify or register
the Shares for sale under (or obtain exemptions from the application of) the state securities or blue sky laws or Canadian provincial
securities laws of those jurisdictions designated by the Agents, shall comply with such laws and shall continue such qualifications,
registrations and exemptions in effect so long as required for the distribution of the Shares.  The Company shall not be required to qualify
as a foreign corporation or to take any action that would subject it to general service of process in any such jurisdiction where it is not
presently qualified or where it would be subject to taxation as a foreign corporation.  The Company will advise the Agents promptly of
the suspension of the qualification or registration of (or any such exemption relating to) the Shares for offering, sale or trading in any
jurisdiction or any initiation or threat of any proceeding for any such purpose, and in the event of the issuance of any order suspending
such qualification, registration or exemption, the Company shall use its reasonable efforts to obtain the withdrawal thereof as soon as
practicable.
(j)
Earnings Statement.  As soon as practicable, the Company will make generally available to its security holders and to
the Agents an earnings statement (which need not be audited) covering a period of at least twelve months beginning with the first fiscal
quarter of the Company occurring after the date of this Agreement which shall satisfy the provisions of Section 11(a) of the Securities
Act and Rule 158 under the Securities Act.
(k)
Listing; Reservation of Shares.  (a) The Company will maintain the listing of the Shares on the Principal Market; and
(b) the Company will reserve and keep available at all times, free of preemptive rights, Shares for the purpose of enabling the Company
to satisfy its obligations under this Agreement. At any time that the Company issues an Issuance Notice prior to effecting an amendment
to its Amended and Restated Certificate of Incorporation to increase the authorized number of Common Shares, the Company shall
advise the Agents of the number of Common Shares available for issuance pursuant to this Agreement.
(l)
Transfer Agent.  The Company shall engage and maintain, at its expense, a registrar and transfer agent for the Shares.

25
(m)
Due Diligence.  During the term of this Agreement, the Company will reasonably cooperate with any reasonable due
diligence review conducted by the Agents in connection with the transactions contemplated hereby, including, without limitation,
providing information and making available documents and senior corporate officers, during normal business hours and at the
Company’s principal offices, as the Agents may reasonably request from time to time.
(n)
Representations and Warranties.   The Company acknowledges that each delivery of an Issuance Notice and each
delivery of Shares on a Settlement Date shall be deemed to be (i) an affirmation to the Designated Agent that the representations and
warranties of the Company contained in or made pursuant to this Agreement are true and correct as of the date of such Issuance Notice or
of such Settlement Date, as the case may be, as though made at and as of each such date, except as may be disclosed in the Prospectus
(including any documents incorporated by reference therein and any supplements thereto); and (ii) an undertaking that the Company will
advise the Designated Agent if any of such representations and warranties will not be true and correct as of the Settlement Date for the
Shares relating to such Issuance Notice, as though made at and as of each such date (except that such representations and warranties shall
be deemed to relate to the Registration Statement and the Prospectus as amended and supplemented relating to such Shares).
(o)
Deliverables at Triggering Event Dates; Certificates.  The Company agrees that on or prior to the date of the first
Issuance Notice and, during the term of this Agreement after the date of the first Issuance Notice, upon:
(A)
the filing of the Prospectus or the amendment or supplement of any Registration Statement or Prospectus
(other than a prospectus supplement relating solely to an offering of securities other than the Shares or a prospectus filed pursuant to
Section 4(a)(ii)(B)), by means of a post-effective amendment, sticker or supplement, but not by means of incorporation of documents by
reference into the Registration Statement or Prospectus;
(B)
the filing with the Commission of an annual report on Form 10-K or a quarterly report on Form 10-Q
(including any Form 10-K/A or Form 10-Q/A containing amended financial information or a material amendment to the previously filed
annual report on Form 10-K or quarterly report on Form 10-Q), in each case, of the Company; or
(C)
the filing with the Commission of a current report on Form 8-K of the Company containing amended financial
information (other than information “furnished” pursuant to Item 2.02 or 7.01 of Form 8-K or to provide disclosure pursuant to Item 8.01
of Form 8-K relating to reclassification of certain properties as discontinued operations in accordance with Statement of Financial
Accounting Standards No. 144) that is material to the offering of securities of the Company in the Agents’ reasonable discretion;
(any such event, a “Triggering Event Date”), the Company shall furnish the Agents (but in the case of clause (C) above only if the
Agents reasonably determine that the information contained in such current report on Form 8-K of the Company is material) with a
certificate as of the Triggering Event Date, in the form and substance satisfactory to the Agents and their counsel, substantially similar to
the form previously provided to the Agents and their counsel, modified, as necessary, to relate to the Registration Statement and the
Prospectus as amended or supplemented, (A) confirming that the representations and warranties of the Company contained in this

26
Agreement are true and correct, (B) that the Company has performed all of its obligations hereunder to be performed on or prior to the
date of such certificate and as to the matters set forth in Section 5(a)(iii) hereof, and (C) containing any other certification that the Agents
shall reasonably request.  The requirement to provide a certificate under this Section 4(o) shall be waived for any Triggering Event Date
occurring at a time when no Issuance Notice is pending or a suspension is in effect, which waiver shall continue until the earlier to occur
of the date the Company delivers instructions for the sale of Shares hereunder (which for such calendar quarter shall be considered a
Triggering Event Date) and the next occurring Triggering Event Date.  Notwithstanding the foregoing, if the Company subsequently
decides to sell Shares following a Triggering Event Date when a suspension was in effect and did not provide the Agents with a
certificate under this Section 4(o), then before the Company delivers the instructions for the sale of Shares or the Agents sell any Shares
pursuant to such instructions, the Company shall provide the Agents with a certificate in conformity with this Section 4(o) dated as of the
date that the instructions for the sale of Shares are issued.
(p)
Legal Opinions.  On or prior to the date of the first Issuance Notice and on or prior to each Triggering Event Date with
respect to which the Company is obligated to deliver a certificate pursuant to Section 4(o) for which no waiver is applicable and
excluding the date of this Agreement, a negative assurance letter and the written legal opinion of Cooley LLP (the “Corporate
Opinion”), counsel to the Company, and DLA Piper LLP, intellectual property counsel to the Company (the “IP Opinion”), each dated
the date of delivery, in form and substance reasonably satisfactory to Agents and their counsel, substantially similar to the form
previously provided to the Agents and their counsel, modified, as necessary, to relate to the Registration Statement and the Prospectus as
then amended or supplemented shall be furnished to the Agents; provided, however, the Company shall be required to furnish no more
than one Corporate Opinion hereunder per calendar year and shall otherwise be required to only furnish a negative assurance letter and
one IP Opinion hereunder per calendar year, including on or prior to the first Issuance Notice hereunder.  In lieu of such opinions for
subsequent periodic filings, in the discretion of the Agents, the Company may furnish a reliance letter from such counsel to the Agents,
permitting the Agents to rely on a previously delivered opinion letter, modified as appropriate for any passage of time or Triggering
Event Date (except that statements in such prior opinion shall be deemed to relate to the Registration Statement and the Prospectus as
amended or supplemented as of such Triggering Event Date).
(q)
Comfort Letter.  On or prior to the date of the first Issuance Notice and on or prior to each Triggering Event Date with
respect to which the Company is obligated to deliver a certificate pursuant to Section 4(o) for which no waiver is applicable and
excluding the date of this Agreement, the Company shall cause PricewaterhouseCoopers LLP, the independent registered public
accounting firm who has audited the financial statements included or incorporated by reference in the Registration Statement, to furnish
the Agents a comfort letter, dated the date of delivery, in form and substance reasonably satisfactory to the Agents and their counsel,
substantially similar to the form previously provided to the Agents and their counsel; provided, however, that any such comfort letter will
only be required on the Triggering Event Date specified to the extent that it contains financial statements filed with the Commission
under the Exchange Act and incorporated or deemed to be incorporated by reference into a Prospectus.  If requested by the Agents, the
Company shall also cause a comfort letter to be furnished to the Agents within ten (10) Trading Days of the date of occurrence of any
material transaction or event requiring the

27
filing of a current report on Form 8-K containing material amended financial information of the Company, including the restatement of
the Company’s financial statements.  The Company shall be required to furnish no more than one comfort letter hereunder per calendar
quarter.
(r)
Secretary’s Certificate.  On or prior to the date of the first Issuance Notice and on or prior to each Triggering Event
Date, the Company shall furnish the Agents a certificate executed by the Secretary of the Company, signing in such capacity, dated the
date of delivery (i) certifying that attached thereto are true and complete copies of the resolutions duly adopted by the Board of Directors
of the Company authorizing the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby
(including, without limitation, the issuance of the Shares pursuant to this Agreement), which authorization shall be in full force and effect
on and as of the date of such certificate, (ii) certifying and attesting to the office, incumbency, due authority and specimen signatures of
each Person who executed this Agreement for or on behalf of the Company, and (iii) containing any other certification that the Agents
shall reasonably request.
(s)
Agents’ Own Account; Clients’ Account.  The Company consents to the Agents trading, in compliance with applicable
law, in the Common Shares for the Agents’ own account and for the account of its clients at the same time as sales of the Shares occur
pursuant to this Agreement.
(t)
Investment Limitation.  The Company shall not invest, or otherwise use the proceeds received by the Company from its
sale of the Shares in such a manner as would require the Company or any of its subsidiaries to register as an investment company under
the Investment Company Act.
(u)
Market Activities.   The Company will not take, directly or indirectly, any action designed to or that might be
reasonably expected to cause or result in stabilization or manipulation of the price of the Shares or any other reference security, whether
to facilitate the sale or resale of the Shares or otherwise, and the Company will, and shall cause each of its affiliates to, comply with all
applicable provisions of Regulation M.  If the limitations of Rule 102 of Regulation M (“Rule 102”) do not apply with respect to the
Shares or any other reference security pursuant to any exception set forth in Section (d) of Rule 102, then promptly upon notice from the
Agents (or, if later, at the time stated in the notice), the Company will, and shall cause each of its affiliates to, comply with Rule 102 as
though such exception were not available but the other provisions of Rule 102 (as interpreted by the Commission) did apply.  The
Company shall promptly notify the Agents if it no longer meets the requirements set forth in Section (d) of Rule 102.
(v)
Notice of Other Sale.  Without the written consent of the Agents, the Company will not, directly or indirectly, offer to
sell, sell, contract to sell, grant any option to sell or otherwise dispose of any Common Shares or securities convertible into or
exchangeable for Common Shares (other than Shares hereunder), warrants or any rights to purchase or acquire Common Shares, during
the period beginning on the third Trading Day immediately prior to the date on which any Issuance Notice is delivered to the Designated
Agent hereunder and ending on the third Trading Day immediately following the Settlement Date with respect to Shares sold pursuant to
such Issuance Notice; and will not directly or indirectly enter into any other “at the market” or continuous equity transaction to offer to
sell, sell, contract to sell, grant any option to sell or

28
otherwise dispose of any Common Shares (other than the Shares offered pursuant to this Agreement) or securities convertible into or
exchangeable for Common Shares, warrants or any rights to purchase or acquire Common Shares prior to the termination of this
Agreement; provided, however, that such restrictions will not be required in connection with the Company’s (i) issuance or sale of
Common Shares, options to purchase Common Shares or Common Shares issuable upon the exercise of options or other equity awards
pursuant to any employee or director share option, incentive or benefit plan, share purchase or ownership plan, long-term incentive plan,
dividend reinvestment plan, inducement award under Nasdaq rules or other compensation plan of the Company or its subsidiaries, as in
effect on the date of this Agreement, (ii) issuance or sale of Common Shares issuable upon exchange, conversion or redemption of
securities or the exercise or vesting of warrants, options or other equity awards outstanding at the date of this Agreement, (iii) issuance or
sale of Common Shares or securities convertible into or exchangeable for Common Shares as consideration for mergers, acquisitions,
other business combinations, joint ventures or strategic alliances (each a “Business Transaction”) occurring after the date of this
Agreement which are not used for capital raising purposes; provided, that the aggregate number of Common Shares issued, or issuable
pursuant to the conversion or exchange of securities convertible into or exchangeable for Common Shares, in connection with such
Business Transaction does not exceed 5% of the aggregate number of Common Shares outstanding immediately prior to such Business
Transaction and (iv) modification of any outstanding options, warrants of any rights to purchase or acquire Common Shares.
Section 5. CONDITIONS TO DELIVERY OF ISSUANCE NOTICES AND TO SETTLEMENT
(a)
Conditions Precedent to the Right of the Company to Deliver an Issuance Notice and the Obligation of the Designated
Agent to Sell Shares.  The right of the Company to deliver an Issuance Notice hereunder is subject to the satisfaction, on the date of
delivery of such Issuance Notice, and the obligation of the Designated Agent to use its commercially reasonable efforts to place Shares
during the applicable period set forth in the Issuance Notice is subject to the satisfaction, on each Trading Day during the applicable
period set forth in the Issuance, of each of the following conditions:
(i)
Accuracy of the Company’s Representations and Warranties; Performance by the Company.  The Company shall have
delivered the certificate required to be delivered pursuant to Section 4(o) on or before the date on which delivery of such certificate is
required pursuant to Section 4(o).  The Company shall have performed, satisfied and complied with all covenants, agreements and
conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to such date, including,
but not limited to, the covenants contained in Section 4(p), Section 4(q) and Section 4(r).
(ii)
No Injunction.   No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted,
entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction or any self-regulatory organization
having authority over the matters contemplated hereby that prohibits or directly and materially adversely affects any of the transactions
contemplated by this Agreement, and no proceeding shall have been commenced that may have the effect of prohibiting or materially
adversely affecting any of the transactions contemplated by this Agreement.

29
(iii)
Material Adverse Changes.   Except as disclosed in the Prospectus and the Time of Sale Information, (a) in the
judgment of the Agents there shall not have occurred any Material Adverse Change; and (b) there shall not have occurred any
downgrading, nor shall any notice have been given of any intended or potential downgrading or of any review for a possible change that
does not indicate the direction of the possible change, in the rating accorded any securities of the Company or any of its subsidiaries by
any “nationally recognized statistical rating organization” as such term is defined for purposes of Section 3(a)(62) of the Exchange Act.
(iv)
No Suspension of Trading in or Delisting of Common Shares; Other Events.  The trading of the Common Shares
(including without limitation the Shares) shall not have been suspended by the Commission, the Principal Market or FINRA and the
Common Shares (including without limitation the Shares) shall have been approved for listing or quotation on and shall not have been
delisted from the Nasdaq Stock Market, the New York Stock Exchange or any of their constituent markets.  There shall not have occurred
(and be continuing in the case of occurrences under clauses (i) and (ii) below) any of the following: (i) trading or quotation in any of the
Company’s securities shall have been suspended or limited by the Commission or by the Principal Market or trading in securities
generally on either the Principal Market shall have been suspended or limited, or minimum or maximum prices shall have been generally
established on any of such stock exchanges by the Commission or FINRA; (ii) a general banking moratorium shall have been declared by
any of federal or New York, authorities; or (iii) there shall have occurred any outbreak or escalation of national or international hostilities
or any crisis or calamity, or any change in the United States or international financial markets, or any substantial change or development
involving a prospective substantial change in United States’ or international political, financial or economic conditions, as in the
judgment of the Agents is material and adverse and makes it impracticable to market the Shares in the manner and on the terms described
in the Prospectus or to enforce contracts for the sale of securities.
(b)
Documents Required to be Delivered on each Issuance Notice Date.  The Designated Agent’s obligation to use its
commercially reasonable efforts to place Shares hereunder shall additionally be conditioned upon the delivery to the Designated Agent
on or before the Issuance Notice Date of a certificate in form and substance reasonably satisfactory to the Designated Agent, executed by
the Chief Executive Officer, President or Chief Financial Officer of the Company, to the effect that all conditions to the delivery of such
Issuance Notice shall have been satisfied as at the date of such certificate (which certificate shall not be required if the foregoing
representations shall be set forth in the Issuance Notice).
(c)
No Misstatement or Material Omission.  Agents shall not have advised the Company that the Registration Statement,
the Prospectus or the Time of Sale Information, or any amendment or supplement thereto, contains an untrue statement of fact that in the
Agents’ reasonable opinion is material, or omits to state a fact that in the Agents’ reasonable opinion is material and is required to be
stated therein or is necessary to make the statements therein not misleading.
Section 6. INDEMNIFICATION AND CONTRIBUTION
(a)
Indemnification of the Agents.  The Company agrees to indemnify and hold harmless each Agent, each of their officers
and employees, and each person, if any, who controls

30
the applicable Agent within the meaning of the Securities Act or the Exchange Act against any loss, claim, damage, liability or expense,
as incurred, joint or several, to which the Agents or such officer, employee or controlling person may become subject, under the
Securities Act, the Exchange Act, other federal or state statutory law or regulation, or the laws or regulations of foreign jurisdictions
where Shares have been offered or sold or at common law or otherwise (including in settlement of any litigation), insofar as such loss,
claim, damage, liability or expense (or actions in respect thereof as contemplated below) arises out of or is based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the Registration Statement, or any amendment thereto, including any
information deemed to be a part thereof pursuant to Rule 430B under the Securities Act, or the omission or alleged omission therefrom of
a material fact required to be stated therein or necessary to make the statements therein not misleading; (ii) any untrue statement or
alleged untrue statement of a material fact contained in any Free Writing Prospectus that the Company has used, referred to or filed, or is
required to file, pursuant to Rule 433(d) of the Securities Act or the Prospectus (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; or (iii) any act or failure to act or any alleged act or failure to act by an
Agent in connection with, or relating in any manner to, the Common Shares or the offering contemplated hereby, and which is included
as part of or referred to in any loss, claim, damage, liability or action arising out of or based upon any matter covered by clause (i) or (ii)
above, provided that the Company shall not be liable under this clause (iii) to the extent that a court of competent jurisdiction shall have
determined by a final judgment that such loss, claim, damage, liability or action resulted directly from any such acts or failures to act
undertaken or omitted to be taken by such Agent through its bad faith or willful misconduct, and to reimburse such Agent and each such
officer, employee and controlling person for any and all documented expenses (including the fees and disbursements of counsel chosen
by such Agent) as such expenses are reasonably incurred by such Agent or such officer, employee or controlling person in connection
with investigating, defending, settling, compromising or paying any such loss, claim, damage, liability, expense or action; provided,
however, that the foregoing indemnity agreement shall not apply to any loss, claim, damage, liability or expense to the extent, but only to
the extent, arising out of or based upon any untrue statement or alleged untrue statement or omission or alleged omission made in
reliance upon and in conformity with written information furnished to the Company by such Agent expressly for use in the Registration
Statement, any such Free Writing Prospectus or the Prospectus (or any amendment or supplement thereto), it being understood and
agreed that the only such information furnished by such Agent to the Company consists solely of the name of such Agent and the last
sentence of the eighth paragraph under the caption “Plan of Distribution” in the Prospectus (collectively, the “Agents Information”).
 The indemnity agreement set forth in this Section 6(a) shall be in addition to any liabilities that the Company may otherwise have.
(b)
Indemnification of the Company, its Directors and Officers.  Each Agent, severally and not jointly, agrees to indemnify
and hold harmless the Company, each of its directors, each of its officers who signed the Registration Statement and each person, if any,
who controls the Company within the meaning of the Securities Act or the Exchange Act against any loss, claim, damage, liability or
expense, as incurred, to which the Company or any such director, officer or controlling person may become subject, under the Securities
Act, the Exchange Act, or other federal or state statutory law or regulation, or the laws or regulations of foreign jurisdictions where
Shares have been offered or sold or at common law or otherwise (including in settlement of any

31
litigation), insofar as such loss, claim, damage, liability or expense arises out of or is based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement, or any amendment thereto, including any information deemed
to be a part thereof pursuant to Rule 430B under the Securities Act, or the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements therein not misleading, or (ii) any untrue statement or alleged untrue
statement of a material fact contained in any Free Writing Prospectus that the Company has used, referred to or filed, or is required to
file, pursuant to Rule 433(d) of the Securities Act or the Prospectus (or any amendment or supplement thereto), or the omission or
alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, but only to the extent arising out of or based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in reliance upon and in conformity with written information furnished to the Company
by the Agents expressly for use in the Registration Statement, any such Free Writing Prospectus or the Prospectus (or any amendment or
supplement thereto), it being understood and agreed that the only such information furnished by the Agents to the Company consists
solely of the Agents Information, and to reimburse the Company and each such director, officer and controlling person for any and all
documented expenses (including the fees and disbursements of counsel chosen by the Company) as such expenses are reasonably
incurred by the Company or such officer, director or controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or action.  The indemnity agreement set forth in this Section
6(b) shall be in addition to any liabilities that the Agents may otherwise have.
(c)
Notifications and Other Indemnification Procedures.  Promptly after receipt by an indemnified party under this Section
6 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party under this Section 6, notify the indemnifying party in writing of the commencement thereof, but the omission so to
notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party for contribution or
otherwise than under the indemnity agreement contained in this Section 6 or to the extent it is not prejudiced as a proximate result of
such failure.  In case any such action is brought against any indemnified party and such indemnified party seeks or intends to seek
indemnity from an indemnifying party, the indemnifying party will be entitled to participate in, and, to the extent that it shall elect,
jointly with all other indemnifying parties similarly notified, by written notice delivered to the indemnified party promptly after receiving
the aforesaid notice from such indemnified party, to assume the defense thereof with counsel reasonably satisfactory to such indemnified
party; provided, however, if the defendants in any such action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that a conflict may arise between the positions of the indemnifying party and the
indemnified party in conducting the defense of any such action or that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to the indemnifying party, the indemnified party or parties
shall have the right to select separate counsel to assume such legal defenses and to otherwise participate in the defense of such action on
behalf of such indemnified party or parties.  Upon receipt of notice from the indemnifying party to such indemnified party of such
indemnifying party’s election so to assume the defense of such action and approval by the indemnified party of counsel (not to be
unreasonably withheld, delayed or conditioned), the indemnifying party will not be liable to such indemnified party under this Section 6
for any legal or other expenses

32
subsequently incurred by such indemnified party in connection with the defense thereof unless (i) the indemnified party shall have
employed separate counsel in accordance with the proviso to the preceding sentence (it being understood, however, that the indemnifying
party shall not be liable for the fees and expenses of more than one separate counsel (together with local counsel), representing the
indemnified parties who are parties to such action), which counsel (together with any local counsel) for the indemnified parties shall be
selected by the Agents (in the case of counsel for the indemnified parties referred to in Section 6(a) above) or the Company (in the case
of counsel for the indemnified parties referred to in Section 6(b) above), (ii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of
commencement of the action or (iii) the indemnifying party has authorized in writing the employment of counsel for the indemnified
party at the expense of the indemnifying party, in each of which cases the fees and expenses of counsel shall be at the expense of the
indemnifying party and shall be paid as they are incurred.
(d)
Settlements.  The indemnifying party under this Section 6 shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party against any loss, claim, damage, liability or expense by reason of such settlement or
judgment.  Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as contemplated by Section 6(c) hereof, the indemnifying party agrees
that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more
than 30 days after receipt by such indemnifying party of the aforesaid request; and (ii) such indemnifying party shall not have reimbursed
the indemnified party in accordance with such request prior to the date of such settlement.  No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement, compromise or consent to the entry of judgment in any pending or
threatened action, suit or proceeding in respect of which any indemnified party is or could have been a party and indemnity was or could
have been sought hereunder by such indemnified party, unless such settlement, compromise or consent includes an unconditional release
of such indemnified party from all liability on claims that are the subject matter of such action, suit or proceeding.
(e)
Contribution.   If the indemnification provided for in this Section 6 is for any reason held to be unavailable to or
otherwise insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate amount paid or payable by such indemnified party, as incurred, as
a result of any losses, claims, damages, liabilities or expenses referred to therein (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company, on the one hand, and the Agents, on the other hand, from the offering of the Shares pursuant
to this Agreement; or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company, on the one
hand, and such Agent, on the other hand, in connection with the statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.  The relative benefits received by the Company, on the one
hand, and such Agent, on the other hand, in connection with the offering of the Shares pursuant to this Agreement shall be deemed to be
in the same respective proportions as the total gross proceeds from the offering of the Shares (before

33
deducting expenses) received by the Company from the applicable Agent bear to the total commissions received by such Agent.  The
relative fault of the Company, on the one hand, and such Agent, on the other hand, shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact
relates to information supplied by the Company, on the one hand, or such Agent, on the other hand, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such statement or omission.  The Agents’ respective obligations
to contribute pursuant to this Section 6(e) are several in proportion to the respective number of Shares they have sold hereunder, and not
joint.
The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall
be deemed to include, subject to the limitations set forth in Section 6(c), any documented legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any action or claim.  The provisions set forth in Section 6(c) with
respect to notice of commencement of any action shall apply if a claim for contribution is to be made under this Section 6(e); provided,
however, that no additional notice shall be required with respect to any action for which notice has been given under Section 6(c) for
purposes of indemnification.
The Company and the Agents agree that it would not be just and equitable if contribution pursuant to this Section 6(e) were
determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations
referred to in this Section 6(e).
Notwithstanding the provisions of this Section 6(e), an Agent shall not be required to contribute any amount in excess of the
agent fees received by such Agent in connection with the offering contemplated hereby.   No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.  For purposes of this Section 6(e), each officer and employee of such Agent and each
person, if any, who controls such Agent within the meaning of the Securities Act or the Exchange Act shall have the same rights to
contribution as such Agent, and each director of the Company, each officer of the Company who signed the Registration Statement, and
each person, if any, who controls the Company with the meaning of the Securities Act and the Exchange Act shall have the same rights to
contribution as the Company.
Section 7. TERMINATION & SURVIVAL
(a)
Term.  Subject to the provisions of this Section 7, the term of this Agreement shall continue from the date of this
Agreement until the end of the Agency Period, unless earlier terminated by the parties to this Agreement pursuant to this Section 7.
(b)
Termination; Survival Following Termination.
(i)
The Company may terminate this Agreement prior to the end of the Agency Period, by giving written notice as
required by this Agreement, upon ten (10) Trading Days’ notice to the Agents; provided that (A) if the Company terminates this
Agreement after the Designated Agent confirms to the Company any sale of Shares, the Company shall remain obligated to comply with

34
Section 3(c)(v) with respect to such Shares and (B) Section 2, Section 6, Section 7 and Section 8 shall survive termination of this
Agreement.   If termination shall occur prior to the Settlement Date for any sale of Shares, such sale shall nevertheless settle in
accordance with the terms of this Agreement.
(ii)
Each Agent may terminate its rights and obligations under this Agreement prior to the end of the Agency Period, by
giving written notice as required by this Agreement, upon ten (10) Trading Days’ notice to the Company.  If termination shall occur prior
to the Settlement Date for any sale of Shares, such sale shall nevertheless settle in accordance with the terms of this Agreement.  For
avoidance of doubt, the termination by one Agent of its rights and obligations under this Agreement pursuant to this Section 7(b) shall
not affect the rights and obligations of the other Agent under this Agreement.
(iii)
In addition to the survival provision of Section 7(b)(i), the respective indemnities, agreements, representations,
warranties and other statements of the Company, of its officers and of the Agents set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on behalf of the Agents or the Company or any of its or their
partners, officers or directors or any controlling person, as the case may be, and, anything herein to the contrary notwithstanding, will
survive delivery of and payment for the Shares sold hereunder and any termination of this Agreement.
Section 8. MISCELLANEOUS
(a)
Press Releases and Disclosure.   The Company may issue a press release describing the material terms of the
transactions contemplated hereby as soon as practicable following the date of this Agreement, and may file with the Commission a
Current Report on Form 8-K, with this Agreement attached as an exhibit thereto, describing the material terms of the transactions
contemplated hereby, and the Company shall consult with the Agents prior to making such disclosures, and the parties hereto shall use all
commercially reasonable efforts, acting in good faith, to agree upon a text for such disclosures that is reasonably satisfactory to all parties
hereto.  No party hereto shall issue thereafter any press release or like public statement (including, without limitation, any disclosure
required in reports filed with the Commission pursuant to the Exchange Act) related to this Agreement or any of the transactions
contemplated hereby without the prior written approval of the other parties hereto, except as may be necessary or appropriate in the
reasonable opinion of the party seeking to make disclosure to comply with the requirements of applicable law or stock exchange rules.  If
any such press release or like public statement is so required, the party making such disclosure shall consult with the other parties prior to
making such disclosure, and the parties shall use all commercially reasonable efforts, acting in good faith, to agree upon a text for such
disclosure that is reasonably satisfactory to all parties hereto.
(b)
No Advisory or Fiduciary Relationship.  The Company acknowledges and agrees that (i) the transactions contemplated
by this Agreement, including the determination of any fees, are arm’s-length commercial transactions between the Company and the
Agents, (ii) when acting as a principal under this Agreement, each Agent is and has been acting solely as a principal is not the agent or
fiduciary of the Company, or its stockholders, creditors, employees or any other party, (iii) such Agent has not assumed nor will assume
an advisory or fiduciary responsibility in favor of the Company with respect to the transactions contemplated hereby or the process
leading thereto

35
(irrespective of whether such Agent has advised or is currently advising the Company on other matters) and such Agent does not have
any obligation to the Company with respect to the transactions contemplated hereby except the obligations expressly set forth in this
Agreement, (iv) such Agent and its respective affiliates may be engaged in a broad range of transactions that involve interests that differ
from those of the Company, and (v) such Agent has not provided any legal, accounting, regulatory or tax advice with respect to the
transactions contemplated hereby and the Company has consulted its own legal, accounting, regulatory and tax advisors to the extent it
deemed appropriate.
(c)
Research Analyst Independence.   The Company acknowledges that each Agent’s respective research analysts and
research departments are required to and should be independent from their respective investment banking divisions and are subject to
certain regulations and internal policies, and as such, such Agent’s research analysts may hold views and make statements or investment
recommendations and/or publish research reports with respect to the Company or the offering that differ from the views of their
respective investment banking divisions.  The Company understands that each Agent is a full service securities firm and as such from
time to time, subject to applicable securities laws, may effect transactions for its own account or the account of its customers and hold
long or short positions in debt or equity securities of the companies that may be the subject of the transactions contemplated by this
Agreement.
(d)
Notices.  All communications hereunder shall be in writing and shall be mailed, hand delivered, e-mailed or telecopied
and confirmed to the parties hereto as follows:
If to the Agents:
Leerink Partners LLC
1301 Avenue of the Americas, 5th Floor
New York, New York 10019
Attention: Peter M. Fry
E-mail:
with copies (which shall not constitute notice) to:
Leerink Partners LLC
1301 Avenue of the Americas, 5th Floor
New York, New York 10019
Attention: Legal Department
E-mail:
and:
Cantor Fitzgerald & Co.
499 Park Avenue
New York, New York 10022
Attention: Capital Markets
Facsimile: (212) 307-3730
Email:

36
Cantor Fitzgerald & Co.
499 Park Avenue
New York, New York 10022
Attention: General Counsel
Facsimile: (212) 307-3730
Email: and:
Covington & Burling LLP
620 Eighth Avenue
New York, New York 10018
Attention:  Brian K. Rosenzweig E-mail:
If to the Company:
Aclaris Therapeutics, Inc.
701 Lee Road, Suite 103
Wayne, Pennsylvania 19087
Attention: Matthew Rothman
E-mail:
with a copy (which shall not constitute notice) to:
Cooley LLP
11951 Freedom Drive, 14th Floor
Reston, Virginia 20190-5640
Facsimile: (703) 456-8100
Attention: Mark Ballantyne, Esq.
E-mail:
Any party hereto may change the address for receipt of communications by giving written notice to the others in accordance with this
Section 8(d).
(e)
Successors.  This Agreement will inure to the benefit of and be binding upon the parties hereto, and to the benefit of
the employees, officers and directors and controlling persons referred to in Section 6, and in each case their respective successors, and no
other person will have any right or obligation hereunder.  The term “successors” shall not include any purchaser of the Shares as such
from the Agents merely by reason of such purchase.
(f)
Partial Unenforceability.  The invalidity or unenforceability of any Article, Section, paragraph or provision of this
Agreement shall not affect the validity or enforceability of any other Article, Section, paragraph or provision hereof.  If any Article,
Section, paragraph or provision of this Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed to
be made such minor changes (and only such minor changes) as are necessary to make it valid and enforceable.
(g)
Governing Law Provisions.  This Agreement shall be governed by and construed in accordance with the internal laws
of the State of New York applicable to agreements made and to be performed in such state.  Any legal suit, action or proceeding arising
out of or based upon

37
this Agreement or the transactions contemplated hereby (“Related Proceedings”) may be instituted in the federal courts of the United
States of America located in the Borough of Manhattan in the City of New York or the courts of the State of New York in each case
located in the Borough of Manhattan in the City of New York (collectively, the “Specified Courts”), and each party irrevocably submits
to the exclusive jurisdiction (except for proceedings instituted in regard to the enforcement of a judgment of any such court (a “Related
Judgment”), as to which such jurisdiction is non-exclusive) of such courts in any such suit, action or proceeding.   Service of any
process, summons, notice or document by mail to such party’s address set forth above shall be effective service of process for any suit,
action or other proceeding brought in any such court.  The parties irrevocably and unconditionally waive any objection to the laying of
venue of any suit, action or other proceeding in the Specified Courts and irrevocably and unconditionally waive and agree not to plead or
claim in any such court that any such suit, action or other proceeding brought in any such court has been brought in an inconvenient
forum.
(h)
General Provisions.  This Agreement constitutes the entire agreement of the parties to this Agreement and supersedes
all prior written or oral and all contemporaneous oral agreements, understandings and negotiations with respect to the subject matter
hereof.  This Agreement may be executed in two or more counterparts, each one of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument, and may be delivered by facsimile transmission or by electronic
delivery of a portable document format (PDF) file.  This Agreement may not be amended or modified unless in writing by all of the
parties hereto, and no condition herein (express or implied) may be waived unless waived in writing by each party whom the condition is
meant to benefit.  The Article and Section headings herein are for the convenience of the parties only and shall not affect the construction
or interpretation of this Agreement.
[Signature Page Immediately Follows]

38
If the foregoing is in accordance with your understanding of our agreement, kindly sign and return to the Company the enclosed
copies hereof, whereupon this instrument, along with all counterparts hereof, shall become a binding agreement in accordance with its
terms.
Very truly yours,
ACLARIS THERAPEUTICS, INC.
By:
/s/ Neal Walker
Name:Neal Walker
Title: Chief Executive Officer
The foregoing Agreement is hereby confirmed and accepted by the Agents in New York, New York as of the date first above
written.
LEERINK PARTNERS LLC
By:
/s/ Peter Fry
Name:Peter Fry
Title: Head of Alt Equities
CANTOR FITZGERALD & CO.
By:
/s/ Sameer Vasudev
Name:Sameer Vasudev
Title: Managing Director

A-1
EXHIBIT A
FORM OF ISSUANCE NOTICE
From:
[ ]
[TITLE]
Aclaris Therapeutics, Inc.
Cc:
[ ]
To:
[Designated Agent Name] (the “Designated Agent”)
Subject:
At the Market Offering— Issuance Notice
Ladies and Gentlemen:
Pursuant to the terms and subject to the conditions contained in the Amended and Restated Sales Agreement, dated February 27, 2025
(the “Agreement”), by and among Aclaris Therapeutics, Inc., a Delaware corporation (the “Company”), Leerink Partners LLC and
Cantor Fitzgerald & Co. (collectively the “Agents,” and each individually an “Agent”), I hereby request on behalf of the Company that
the Designated Agent sell up to [ ] shares of common stock, $0.00001 par value per share, of the Company (the “Shares”), at a minimum
market price of $[ ] per share [; provided that no more than [ ] Shares shall be sold in any one Trading Day (as such term is defined in the
Agreement)].  Sales should begin [on the date of this Issuance Notice] and end on [DATE] [until all Shares that are the subject of this
Issuance Notice are sold].

A-2
Schedule A
Notice Parties
The Company
Kevin Balthaser
The Agents
Leerink Partners LLC
Cantor Fitzgerald & Co.
With copies to:

Exhibit 10.26
EXECUTION VERSION
CERTAIN IDENTIFIED INFORMATION HAS BEEN OMITTED FROM THIS EXHIBIT BECAUSE IT IS (I) NOT
MATERIAL AND (II) OF THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.
“[***]” INDICATES THAT INFORMATION HAS BEEN OMITTED
EXCLUSIVE LICENSE AGREEMENT
BY AND BETWEEN
BIOSION, INC.
AND
ACLARIS THERAPEUTICS, INC.
November 18, 2024

i
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS
1
ARTICLE 2 LICENSES AND OTHER RIGHTS
19
2.1
Grant of License to Company
19
2.2
Sublicenses
19
2.3
Retained Rights; No Implied Licenses
19
2.4
Exclusivity.
20
2.5
Technology Transfer
21
2.6
Transition Services.
22
2.7
Biosion Materials Transfer.
24
2.8
Existing Inventory
24
2.9
CTTQ Agreements.
25
ARTICLE 3 DEVELOPMENT, MANUFACTURE AND COMMERCIALIZATION OF LICENSED PRODUCTS
25
3.1
Development
25
3.2
Commercialization
25
3.3
Manufacturing
26
3.4
Diligence
26
3.5
Subcontracting
26
3.6
Trademarks
26
3.7
Information Rights
26
3.8
Recordkeeping
27
3.9
Compliance with Laws
27
3.10
Regulatory Matters.
28
3.11
Alliance Managers
29
ARTICLE 4 FINANCIALS
29
4.1
Upfront
29
4.2
Equity Consideration
29
4.3
Transition Services Fees
29
4.4
Biosion Materials; Existing Inventory
29
4.5
Regulatory Milestones
29
4.6
Sales Milestones
30
4.7
Royalties.
31
4.8
Sublicense Income
32
4.9
Development, Manufacture and Commercialization Costs
33
4.10
Mode of Payment and Currency
33
4.11
Blocked Payments
34
4.12
Late Payments
34
4.13
Records; Audits
34
4.14
Taxes
35

ii
ARTICLE 5 INTELLECTUAL PROPERTY
36
5.1
Inventions
36
5.2
Prosecution and Maintenance of Biosion Patents
36
5.3
Enforcement of Biosion Licensed Technology
37
5.4
Defense of Third Party Actions
39
5.5
Third Party Agreements
39
5.6
CTTQ Patents
40
ARTICLE 6 CONFIDENTIALITY
40
6.1
Confidentiality Obligations
40
6.2
Authorized Disclosures
41
6.3
Clinical Trial Data
42
6.4
Public Disclosures
42
6.5
Publications
42
6.6
Use of Name
43
6.7
Equitable Relief
43
ARTICLE 7 REPRESENTATIONS AND WARRANTIES
43
7.1
Mutual Representations and Warranties
43
7.2
Additional Representations and Warranties
44
7.3
Additional Representations and Warranties
44
7.4
DISCLAIMER
46
ARTICLE 8 INDEMNIFICATION
47
8.1
Indemnification by Biosion
47
8.2
Indemnification by Company
47
8.3
Notification of Claims; Conditions to Indemnification Obligations
47
8.4
Certain Limitations
48
8.5
Insurance
48
8.6
No Consequential Damages
48
ARTICLE 9 TERM AND TERMINATION
49
9.1
Term and Expiration
49
9.2
Termination.
49
9.3
Effects of Termination
51
9.4
Survival
54
9.5
Effect of Bankruptcy or Insolvency
54
ARTICLE 10 DISPUTE RESOLUTION
55
10.1
Disputes
55
10.2
Escalation to Executive Officers
55
10.3
Arbitration
55
10.4
Injunctive Relief
56
10.5
Patent and Trademark Disputes
56

iii
ARTICLE 11 MISCELLANEOUS PROVISIONS
56
11.1
Relationship of the Parties
56
11.2
Assignment
56
11.3
Performance and Exercise by Affiliates
56
11.4
Further Actions
57
11.5
Accounting Procedures
57
11.6
Force Majeure
57
11.7
No Trademark Rights
57
11.8
Entire Agreement; Amendments
57
11.9
Governing Law
57
11.10
Notices
58
11.11
Waiver
59
11.12
Severability
59
11.13
Binding Effect; No Third Party Beneficiaries
59
11.14
Interpretation
59
11.15
Counterparts
60
Schedules
Schedule 1.18
Biosion Materials
Schedule 1.19
Existing Biosion Patents
Schedule 1.22
Existing BSI-045B Antibody
Schedule 1.24
Existing BSI-502 Antibody
Schedule 1.43
Tripartite CTTQ Agreement
Schedule 1.68
Existing Inventory
Schedule 1.90
Knowledge
Schedule 2.5
Initial Technology Transfer Plan
Schedule 2.6
Transition Services
Schedule 2.7
Form of MTR
Schedule 4.1
Upfront Reimbursement Costs
Schedule 4.2
Warrant
Schedule 4.10
Payment Instructions

1
EXCLUSIVE LICENSE AGREEMENT
This Exclusive License Agreement (this “Agreement”) is dated as of November 18, 2024 (the “Effective Date”), by
and between Biosion, Inc. (博奥信生物技术（南京）有限公司), a company organized and existing under the laws of the
People’s Republic of China and having a place of business at 5th Floor, Building D, 3-1 Zhongdan Unit, South Longshan Rd,
Jiangbei New District, Nanjing, Jiangsu, China 210061 (“Biosion”), and Aclaris Therapeutics, Inc., a corporation organized
under the laws of the State of Delaware and having a place of business at 701 Lee Road, Suite 103, Wayne, Pennsylvania
19087, United States of America (“Company”). Each of Biosion and Company may be individually referred to herein as a
“Party” or, collectively, as “Parties”.
RECITALS
WHEREAS, Biosion possess certain Patents, Know-How and expertise with respect to the Licensed Products;
WHEREAS, Company and its Affiliates have expertise in the Development, Manufacture and Commercialization of
therapeutic products in the pharmaceutical industry; and
WHEREAS, Biosion desires to grant to Company, and Company desires to receive from Biosion, an exclusive license under
the Biosion Licensed Technology to Develop, Manufacture and Commercialize Licensed Products in the Field in the
Company Territory in accordance with the terms set forth herein.
NOW, THEREFORE, in consideration of the mutual promises and undertakings set forth herein, the receipt and sufficiency
of which are hereby acknowledged, and intending to be legally bound hereby, the Parties agree as follows:
ARTICLE 1
DEFINITIONS
Unless otherwise defined elsewhere in the Agreement, all capitalized terms shall have the following meanings (and cognates
of such terms shall have correlative meanings):
1.1.
“AAA Rules” has the meaning set forth in Section 10.3.
1.2.
“Accounting Standard” means, with respect to a Party (or a Selling Party, as applicable), depending on which
accounting standard is normally applied by such Party (or Selling Party) with respect to the filing of its reporting: (a)
United States Generally Accepted Accounting Principles; or (b) International Financial Reporting Standards, as
applicable, in each case ((a) or (b)), consistently applied.
1.3.
“Acquiree” has the meaning set forth in Section 2.4(b)(ii)(B).
1.4.
“Acquirer” means, collectively, the Third Party referenced in the definition of Change of Control and any Affiliates
of such Third Party, other than the applicable Party in the definition of Change of Control and such Party’s
Affiliates, determined as of immediately prior to the closing of such Change of Control.
1.5.
“Additional Biosion Bispecific Antibody” has the meaning set forth in Section 1.24.

2
1.6.
“Adverse Event” means any untoward medical occurrence in a patient or subject who is administered any product,
whether or not considered drug related or serious as defined by applicable Law.
1.7.
“Affiliate” means, with respect to any Person, any other Person who, directly or indirectly, controls, is controlled by
or is under common control with such Person, but only for so long as such control exists. For the purposes of this
Section 1.7, the word “control” (including, with correlative meaning, the terms “controlled by” or “under the
common control with”) means the actual power, either directly or indirectly through one or more intermediaries, to
direct the management and policies of such Person or entity, whether by the ownership of more than fifty percent
(50%) of the voting stock of such entity, or by contract or otherwise.
1.8.
“Agreement” has the meaning set forth in the preamble.
1.9.
“Alliance Manager” has the meaning set forth in Section 3.11.
1.10.
“Antibody” means any antibody, including [***].
1.11.
“Bankruptcy Code” means Title 11 of the United States Code, as amended, or analogous provisions of Law outside
the United States.
1.12.
“Bankruptcy Event” has the meaning set forth in Section 9.2(c).
1.13.
“Biosimilar Product” means, with respect to a particular Licensed Product in a particular country in the Company
Territory, any product that is (a) sold by a Third Party not authorized by any Selling Party and that did not purchase
such product in a chain of distribution that included any Selling Party; and (b) (i) approved by the applicable
Regulatory Authority for such country as interchangeable with such Licensed Product, as set forth in 42 U.S.C. §
262(k) or successor Law, or other analogous Law outside of United States, (ii) a “biosimilar” to such Licensed
Product, as the term “biosimilar” is defined in 42 U.S.C. §262(i) or successor Law, or other analogous Law outside
of the United States, or (iii) the approval of such product is based, in whole or in substantial part, on the prior
Marketing Approval of such Licensed Product by such Regulatory Authority.
1.14.
“Biosion” has the meaning set forth in the preamble.
1.15.
“Biosion Indemnitees” has the meaning set forth in Section 8.2.
1.16.
“Biosion Know-How” means (a) any Know-How (other than Materials) that is (i) Controlled by Biosion as of the
Effective Date and (ii) necessary or reasonably useful to Develop, Manufacture or Commercialize the Existing BSI-
045B Product, the Existing BSI-502 Product or any Licensed Product that incorporates, constitutes, contains,
comprises or utilizes any Additional Biosion Bispecific Antibodies (such Know-How, the “Existing Biosion Know-
How”); and (b) any other Know-How (other than Materials or the Existing Biosion Know-How) that is (i)
Controlled by Biosion as of the Effective Date or during the Term and (ii) necessary or reasonably useful to
Develop, Manufacture or Commercialize the Licensed Products.
1.17.
“Biosion Licensed Technology” means (a) the Biosion Know-How; (b) the Biosion Materials; and (c) the Biosion
Patents.
1.18.
“Biosion Materials” means any Materials that (a) are Controlled by Biosion (or any of its Affiliates) as of the
Effective Date; and (b) (i) were transferred to Company (or any of its Affiliates) pursuant

3
to the Existing MTA or (ii) are set forth on Schedule 1.18; provided that Biosion Materials shall exclude any
Existing Inventory.
1.19.
“Biosion Patents” means all Patents that (i) are Controlled by Biosion (or any of its Affiliates) as of the Effective
Date or during the Term and (ii) (A) claim any Biosion Know-How, or (B) are otherwise necessary or reasonably
useful to Develop, Manufacture or Commercialize any Licensed Product; provided that all Biosion Patents that are
owned by Biosion and in existence as of the Effective Date are set forth on Schedule 1.19 (the “Existing Biosion
Patents”); provided that, for clarity, the Existing Biosion Patents exclude any CTTQ Patents.
1.20.
“BPCIA” means the Biologics Price Competition and Innovation Act of 2009 (42 U.S.C. § 262 et seq) or any
similar provisions in a country outside the United States.
1.21.
“Breaching Party” has the meaning set forth in Section 9.2(b)(i).
1.22.
“BSI-045B Antibody” means (a) the Antibody identified on Schedule 1.22 (the “Existing BSI-045B Antibody”);
and (b) [***]; provided that, for the avoidance of doubt, in each case ((a) or (b)), BSI-045B Antibodies shall exclude
any BSI-502 Antibodies or Derived BSI-045B Antibodies.
1.23.
“BSI-045B Product” means any product that incorporates, constitutes, contains, comprises or utilizes a BSI-045B
Antibody, in any and all forms, presentations, strengths, doses, formulations or regimens, including any
Combination Product thereof, including for the avoidance of doubt, the Existing BSI-045B Product; provided that
for the avoidance of doubt BSI-045B Products shall exclude any product that incorporates, constitutes, contains,
comprises or utilizes any BSI-502 Antibody or TSLP Antibody (including any Derived BSI-045B Antibody).
1.24.
“BSI-502 Antibody” means (a) the Antibody identified on Schedule 1.24 (the “Existing BSI-502 Antibody”);
[***].
1.25.
“BSI-502 Product” means any product that incorporates, constitutes, contains, comprises or utilizes a BSI-502
Antibody, in any and all forms, presentations, strengths, doses, formulations or regimens, including any
Combination Product thereof, including for the avoidance of doubt, the Existing BSI-502 Product.
1.26.
“Business Day” means a day other than (a) Saturday or Sunday; (b) any public holiday in Shanghai, China or New
York, NY, United States; or (c) any day on which banking institutions in Shanghai, China or New York, NY, United
States are authorized or required by Law to close.
1.27.
“Calendar Quarter” means each three (3) month period commencing January 1, April 1, July 1 or October 1 of any
Calendar Year; provided that (a) the first Calendar Quarter of the Term shall extend from the Effective Date to the
end of the first full Calendar Quarter thereafter; and (b) the last Calendar Quarter of the Term shall end upon the
earlier effective date of expiration or termination of this Agreement.
1.28.
“Calendar Year” means the period beginning on January 1 and ending on December 31 of the same year; provided
that (a) the first Calendar Year of the Term shall commence on the Effective Date and end on December 31 of the
same year; and (b) the last Calendar Year of the Term shall commence on January 1 of the Calendar Year in which
this Agreement terminates or expires and end on the earlier effective date of termination or expiration of this
Agreement.

4
1.29.
“Change of Control” means, with respect to a Person, (a) the closing of a sale of all or substantially all of the assets
of such Person to a Third Party in one transaction or series of transactions; (b) the closing of a merger or other
business combination or transaction that results in a Third Party owning, directly or indirectly, more than fifty
percent (50%) of the voting securities of such Person; or (c) the closing of a transaction following which a Third
Party acquires direct or indirect ability or power to direct or cause the direction of the management and policies of
such Person or otherwise to direct the affairs of such Person, whether through ownership of equity, voting securities,
beneficial interest, by contract or otherwise. Notwithstanding the foregoing, Change of Control shall not include any
of the following transactions: (i) the reincorporation of such Person in a different state or its change of name or
reorganization in the same state; provided that such Person will continue to be owned by the then-current
stockholders of such Person, which will hold all of the outstanding shares of capital stock of such Person, (ii) the
formation of a holding company that will be owned exclusively by the then-current stockholders of such Person,
which will hold all of the outstanding shares of capital stock of such Person, (iii) a bona fide debt or equity financing
primarily for capital raising purposes or (iv) any underwritten public offering of equity of such Person on any
internationally recognized stock exchange (including the New York Stock Exchange and the National Association of
Securities Dealers Automated Quotations Stock Market).
1.30.
“Clinical Trial” means a clinical trial in human subjects that has been approved by an institutional review board or
ethics committee, as applicable, and is designed to measure the safety or efficacy of a therapeutic product, including
any Phase I Clinical Trial, Phase II Clinical Trial, Phase III Clinical Trial, any study incorporating more than one (1)
of these phases, or any clinical trial (whether required or optional) commenced after Marketing Approval.
1.31.
“Combination Product” means any Licensed Product that is sold in the form of a combination (whether co-
formulated, co-packaged or otherwise sold for a single price) containing or comprising a Licensed Antibody
together with one or more other therapeutically active agents that is not itself a Licensed Antibody (each such
additional therapeutically active agent, an “Other Component”); or defined as a “combination product” by the FDA
pursuant to 21 C.F.R. §3.2(e) or its foreign equivalent but, in any event, excluding devices, delivery vehicles and
excipients.
1.32.
“Commercialize” means, with respect to any product, any and all activities directed or related to promoting,
marketing, distributing, selling (including offering for sale or contracting to sell), importing, exporting or otherwise
commercially exploiting such product, or providing product support for such product and to conduct activities in
preparation for conducting the foregoing activities, including interactions with Regulatory Authorities prior to or
following the receipt of Marketing Approval in the applicable country or region for such product or activities to
produce commercialization support data or to secure or maintain market access and reimbursement; provided that
Commercialization does not include Development or interacting with Regulatory Authorities regarding the
foregoing.
1.33.
“Commercially Reasonable Efforts” means, with respect to applicable activities or obligations of a Party under
this Agreement, such efforts and resources that are consistent with the commercially reasonable practices of a
pharmaceutical or biotechnology company of similar size and resources as such Party, in the exercise of its
reasonable business discretion, in connection with performance of similar activities or obligations relating to the
Development and Commercialization of a similarly situated compound or product owned by it or to which it has
exclusive rights, with similar characteristics as the applicable Licensed Antibody or Licensed Product hereunder,
that is of similar market potential at a similar stage in its development or product life as such Licensed Antibody or
Licensed Product, taking into account relevant commercial, legal and regulatory factors, including the
competitiveness of the marketplace (including the number of competing

5
products), the proprietary position of such product, issues of safety and efficacy, the regulatory environment, actual
or projected profitability of such product, manufacturing status, the nature and extent of market exclusivity
(including patent coverage), the cost and likelihood of obtaining Marketing Approval (including pricing and
reimbursement approval) and the costs and expenses associated with the Development and Commercializing such
product. Commercially Reasonable Efforts shall be determined on a Licensed Product-by-Licensed Product and
country-by-country basis, and may change over time.
1.34.
“Company” has the meaning set forth in the preamble.
1.35.
“Company Indemnitees” has the meaning set forth in Section 8.1.
1.36.
“Company Territory” means worldwide but excluding the Excluded Territory.
1.37.
“Competing Product” has the meaning set forth in Section 2.4(b)(i).
1.38.
“Competing Program” has the meaning set forth in Section 2.4(b)(ii).
1.39.
“Confidential Information” means, with respect to a given Disclosing Party, any and all non-public or confidential
information relating to the business, operations or products of such Disclosing Party or any of its Affiliates,
including any Know-How, that such Disclosing Party or its Affiliate previously disclosed to the Receiving Party
under this Agreement (or, with respect to Company as the Receiving Party, any such information disclosed to
Company or any of its Affiliates under the Existing Confidentiality Agreement), or otherwise becomes known to the
Receiving Party by virtue of this Agreement, as applicable; provided that, notwithstanding the foregoing, the
existence and the terms and conditions of this Agreement constitute both Parties’ Confidential Information, with
both Parties deemed to be the Receiving Party, unless and to the extent any such information is disclosed in any
press release, presentation or other form of public disclosure permitted under Article 6.
1.40.
“Control” means, with respect to any Know-How, Patent, Regulatory Documents, Regulatory Approval or other
intellectual property, the possession (whether by sole or joint ownership or license or otherwise, other than the
licenses granted hereunder) of the ability to grant access, a right to use, or a license, sublicense or any other right to
exploit, as set forth in this Agreement, such Know-How, Patent, Regulatory Documents, Regulatory Approval or
other intellectual property, as applicable, in each case, without: (a) violating the terms of any agreement or other
arrangement with any Third Party or any Law; or (b) incurring any incremental payment obligation to a Third Party
associated with making such grant (unless, and except to the extent, the Parties have agreed in writing to an
allocation of such payment obligation); provided that, notwithstanding anything in this Agreement to the contrary, a
Party or its Affiliates will be deemed not to Control any Know-How, Patents, Regulatory Documents, Regulatory
Approval or other intellectual property that are owned or in-licensed by an Acquirer except (i) if such Know-How,
Patents, Regulatory Documents, Regulatory Approval or other intellectual property owned or in-licensed by the
Acquirer were generated from participation by employees or agents of such Acquirer in furtherance of Development
or Manufacturing activities with respect to any Licensed Antibody or Licensed Product, or Commercialization
activities with respect to any Licensed Product, under this Agreement after such Change of Control, (ii) for any
Know-How, Patents, Regulatory Documents, Regulatory Approval or other intellectual property owned or in-
licensed by such Acquirer not used in the performance of Development or Manufacturing activities with respect to
any Licensed Antibody or Licensed Product, or Commercialization activities with respect to any Licensed Product,
under this Agreement prior to the consummation of such Change of Control that, after the

6
consummation of such Change of Control, are used by such acquired Party or any of its Affiliates in the performance
of Development or Manufacturing activities with respect to any Licensed Antibody or Licensed Product, or
Commercialization activities with respect to any Licensed Product, under this Agreement, or (iii) if, prior to the
consummation of such Change of Control, such acquired Party or any of its Affiliates also Controlled such Know-
How, Patents, Regulatory Documents, Regulatory Approval or other intellectual property owned or in-licensed by
such Acquirer, in each of which cases ((i)–(iii)), such Know-How, Patents, Regulatory Documents, Regulatory
Approval or other intellectual property owned or in-licensed by such Acquirer will be deemed Controlled by the
acquired Party or its Affiliates for purposes of this Agreement.
1.41.
“Cover” means, with respect to a given Licensed Antibody or Licensed Product in a given country and a given
Patent, that the making, offering for sale, selling, importing or using of such Licensed Antibody or Licensed Product
would, but for a license granted under such Patent (assuming, with respect to a patent application, as if such
application was then issued), infringe any claim of such Patent in such country in which that activity occurs.
1.42.
“CTTQ” means Chia Tai Tianqing Pharmaceutical Group, Co., Ltd., together with its successors and permitted
assigns under the CTTQ Agreements.
1.43.
“CTTQ Agreements” means [***] that certain Cooperation Agreement, by and among Biosion, CTTQ and
Company, dated on or around the date hereof, attached hereto as Schedule 1.43 (the “Tripartite CTTQ
Agreement”).
1.44.
“CTTQ Patents” means any Patents that are owned or otherwise controlled by CTTQ (or any of its Affiliates) under
which CTTQ has granted either Party a covenant not to sue pursuant to the Tripartite CTTQ Agreement.
1.45.
“Data Protections Laws” means any Laws relating to privacy and data protection, direct marketing or the
interception or communication of electronic messages, including, to the extent applicable, (a) the United States
Health Insurance Portability and Accountability Act of 1996 and its implementing regulations; (b) the California
Consumer Privacy Act of 2018; (c) the General Data Protection Regulation 2016/679, the e-Privacy Directive
2002/58/EC, the Privacy and Electronic Communications Regulations 2003, the UK Data Protection Act 2018
(“DPA”), the UK General Data Protection Regulation as defined by the DPA, as amended by the Data Protection,
Privacy and Electronic Communications (EU Exit) Regulations 2019; and (d) any relevant law, statute, declaration,
decree, directive, legislative enactment, order, ordinance, regulation, rule or other binding instrument which
implements such Laws from time to time.
1.46.
“Default Notice” has the meaning set forth in Section 9.2(b)(i).
1.47.
“Defending Party” has the meaning set forth in Section 5.4(c).
1.48.
“Derived BSI-045B Antibody” means any [***]; provided that Derived BSI-045B Antibodies shall exclude any
BSI-502 Antibodies.
1.49.
“Develop” means, with respect to any Antibody or product, the performance of any and all research, discovery, pre-
clinical or clinical development activities (including toxicology, pharmacology, statistical analysis, Clinical Trials
and all other regulatory trials), as well as any and all activities pertaining to supporting, securing or maintaining
Regulatory Approval of such Antibody or product in a given country or territory or any Manufacturing activities in
connection with any of the foregoing (including development of test methods, stability testing, formulation
development,

7
process development, quality assurance activities, quality control activities, qualification and validation activities,
analytic process development, Manufacturing process validation, scale-up, and all other similar activities).
1.50.
“Development Plan” has the meaning set forth in Section 3.1.
1.51.
“Development Report” has the meaning set forth in Section 3.7.
1.52.
“Disclosing Party” has the meaning set forth in Section 6.1.
1.53.
“Dispute” has the meaning set forth in Section 10.1.
1.54.
“Dollars” or “$” means the official currency of the United States of America.
1.55.
“Effective Date” has the meaning set forth in the preamble.
1.56.
“EMA” means the European Medicines Agency, or any successor entity thereto performing similar functions for the
European Union.
1.57.
“Enforcement Action” has the meaning set forth in Section 5.3(b).
1.58.
“European Union” or “E.U.” means the economic, scientific, and political organization of member states of the
European Union as it may be constituted from time to time.
1.59.
“Excluded Territory” means Mainland China, Macau, Hong Kong and Taiwan.
1.60.
“Executive Officers” means (a) with respect to Biosion, its [***] (or their designee); and (b) with respect to
Company, its [***] (or their designee).
1.61.
“Existing Biosion Know-How” has the meaning set forth in Section 1.16.
1.62.
“Existing Biosion Patents” has the meaning set forth in Section 1.19.
1.63.
“Existing BSI-045B Antibody” has the meaning set forth in Section 1.22.
1.64.
“Existing BSI-045B Product” means the BSI-045B Product as Developed by or on behalf of Biosion (or any of its
Affiliates) as of the Effective Date, solely in the form that such BSI-045B Product exists as of the Effective Date.
1.65.
“Existing BSI-502 Antibody” has the meaning set forth in Section 1.24.
1.66.
“Existing BSI-502 Product” means the BSI-502 Product as Developed by or on behalf of Biosion (or any of its
Affiliates) as of the Effective Date, solely in the form that such BSI-502 Product exists as of the Effective Date.
1.67.
“Existing Confidentiality Agreement” means that certain Mutual Confidentiality Agreement, dated as of [***], by
and between Biosion and Company.
1.68.
“Existing Inventory” means any (a) finished Existing BSI-045B Product or applicable precursor materials for the
Existing BSI-045B Product; and (b) finished Existing BSI-502 Product or applicable precursor materials for the
Existing BSI-502 Product, in each case ((a) and (b)), that is, as of the Effective Date, (i) Controlled by Biosion (or
any of its Affiliates), (ii) in the possession of

8
Biosion (or any of its Affiliates or its or their Third Party subcontractors) and (iii) set forth on Schedule 1.68.
1.69.
“Existing MTA” means that certain Materials Transfer Agreement, by and between Biosion and Company, dated as
of [***], as the same may be amended from time to time, including pursuant to that certain Amendment No. 1 to the
Materials Transfer Agreement, by and between Biosion and Company, dated as of [***].
1.70.
“Existing Regulatory Material” has the meaning set forth in Section 7.3(j).
1.71.
“FDA” means the U.S. Food and Drug Administration, or any successor entity thereto performing similar functions
in the United States.
1.72.
“Field” means any and all diagnostic, palliative, prophylactic or therapeutic human uses.
1.73.
“First Commercial Sale” means, with respect to a Licensed Product, on a country-by-country basis, the first
commercial sale for monetary value in an arms-length transaction of such Licensed Product to a Third Party end
user by or on behalf of a Selling Party in such country; provided, however, that the following shall not constitute a
First Commercial Sale: (a) sales as so-called “treatment IND sales,” “named patient sales,” and “compassionate use
sales,” (including as part of a named patient program or single patient program), bona fide charitable donations, or
for similar purposes in accordance with Law pertaining to any expanded access program or indigent program; or (b)
transfers of Licensed Product to Third Parties at or below cost for use as bona fide samples, for the performance of
Clinical Trials, or for similar purposes in accordance with Law.
1.74.
“FTE” means employees or other personnel of Biosion (or any of its Affiliates) performing specific activities in
connection with the Transition Services provided by Biosion pursuant to Section 2.6. For clarity, FTEs shall not
include human resources, financial or legal personnel.
1.75.
“FTE Costs” means, with respect to a given period, the applicable FTE Rate multiplied by the actual total number
of hours of services performed by the applicable FTEs; provided that FTE Costs shall only apply with respect to the
time actually spent by such FTEs to the extent directly devoted to performing the specific activities in connection
with the Transition Services provided by Biosion pursuant to Section 2.6.
1.76.
“FTE Rate” means the hourly rates as set forth on Schedule 2.6.
1.77.
“GCP” means all applicable then-current good clinical practice standards, practices, and procedures promulgated or
endorsed by the applicable Regulatory Authority as set forth in the guidelines imposed by such Regulatory
Authority, as may be updated from time-to-time, including those as set forth in FDA regulations in 21 C.F.R. Parts
11, 50, 54, 56 and 312 and all related FDA rules, regulations, orders, and guidance, and by the International Council
for Harmonization Guidelines (the “ICH Guidelines”), including E6: Guideline for Good Clinical Practice.
1.78.
“GLP” means all applicable then-current good laboratory practice standards, practices, and procedures promulgated
or endorsed by the applicable Regulatory Authority as set forth in the guidelines imposed by such Regulatory
Authority, as may be updated from time-to-time, including those as set forth in FDA regulations in 21 C.F.R. Part 58
and all applicable FDA rules, regulations, orders, and guidance, and the requirements with respect to good
laboratory practices prescribed by the European Community, the OECD (Organization for Economic Cooperation
and Development Council) and the ICH Guidelines.

9
1.79.
“GMP” means all applicable then-current good manufacturing practices, including: (a) the applicable part of quality
assurance to ensure that products are consistently produced and controlled in accordance with the quality standards
appropriate for their intended use, as defined in European Commission Directive 2003/94/EC laying down the
principles and guidelines of good manufacturing practice; (b) the principles detailed in the U.S. Current Good
Manufacturing Practices, 21 C.F.R. Sections 210, 211, 601, 610 and 820; (c) the Rules Governing Medicinal
Products in the European Community, Volume IV, Good Manufacturing Practice for Medicinal Products; (d) the
principles detailed in the ICH Q7A guidelines; and (e) the equivalent applicable Laws in any relevant country, each
as may be amended and applicable from time to time.
1.80.
“Government Official” means: (a) any officer or employee of a Governmental Body or any department, agency or
instrumentality of a Governmental Body (which includes public enterprises, and entities owned or controlled by the
state); (b) any officer or employee of a public international organization such as the World Bank or United Nations;
(c) any officer or employee of a political party, or any candidate for public office; (d) any person defined as a
government or public official under applicable local Laws (including anti-bribery and corruption Laws) and not
already covered by any of the above; or (e) any person acting in an official capacity for or on behalf of any of the
above. For the purposes of clarity, “Government Official” shall include any person with close family members who
are Government Officials with the capacity, actual or perceived, to influence or make official decisions affecting
Company’s or its Affiliates’ business.
1.81.
“Governmental Body” means any (a) nation, principality, state, commonwealth, province, territory, county,
municipality, district or other jurisdiction of any nature; (b) supranational, federal, state, local, municipal, foreign or
other government; (c) governmental or quasi-governmental authority of any nature (including any governmental
division, subdivision, department, agency, bureau, branch, office, commission, council, board, instrumentality,
officer, official, representative, organization, unit, body or entity and any court or other tribunal); (d) multi-national
or supranational organization or body; or (e) individual, entity, or body exercising, or entitled to exercise, any
executive, legislative, judicial, administrative, regulatory, police, military or Tax Authority or power of any nature.
1.82.
“ICH” means International Council for Harmonization.
1.83.
“ICH Guidelines” has the meaning set forth in Section 1.77.
1.84.
“IL4R” means interleukin-4 receptor.
1.85.
“IND” means, in the United States, an effective Notice of a Claimed Investigational New Drug Application filed
with the FDA as more fully defined in 21 C.F.R. § 312.3, and, with respect to every other country or jurisdiction, the
Clinical Trial notification, Clinical Trial application or other equivalent application (i.e., a filing that must be made
prior to commencing clinical testing of any product in humans) filed with the applicable Regulatory Authority in
such country.
1.86.
“Indemnitees” means (a) with respect to Company as the indemnifying Party, the Biosion Indemnitees; and (b) with
respect to Biosion as the indemnifying Party, the Company Indemnitees.
1.87.
“Indication” means an entirely separate and distinct disease or medical condition in humans (including having a
separate histology) for which a product may be filed to obtain a separate and distinct Marketing Approval with an
approved label claim to treat such disease or condition, as applicable; provided that, all variants of a single disease,
disorder or condition (whether classified by severity or otherwise), regardless of the patient population, shall be
treated as the same

10
Indication; provided, further, that (a) by way of example, (i) the treatment of a disease, disorder, or condition in a
particular patient population and the treatment of the same disease, disorder, or condition in another population (e.g.,
adult population and pediatric population) shall be treated as the same Indication, and (ii) different stages of disease
and different treatment settings (e.g., adjuvant and metastatic) shall be treated as the same Indication; and (b) for
clarity, an Indication is only distinct from another Indication if the diseases associated with such Indications are (i)
listed in two different blocks of [***] and (ii) developed under separate clinical studies.
1.88.
“Initiation” means, with respect to a given Clinical Trial, the dosing of the first patient with the applicable product
for the first time in such Clinical Trial.
1.89.
“Know-How” means any: (a) proprietary, scientific or technical information, results and data of any type
whatsoever, in any tangible or intangible form whatsoever, including discoveries, inventions, trade secrets, devices,
databases, practices, protocols, regulatory filings, methods, processes (including Manufacturing processes,
specifications and techniques), techniques, concepts, ideas, specifications, formulations, formulae, data (including
pharmacological, biological, chemical, toxicological, clinical and analytical information, quality control, trial and
stability data), case reports forms, medical records, data analyses, reports, studies and procedures, designs for
experiments and tests and results of experimentation and testing (including results of research or other
Development), summaries and information contained in submissions to and information from ethical committees, or
Regulatory Authorities, and Manufacturing process and Development information, results and data, whether or not
patentable, all to the extent not claimed or disclosed in any Patent; and (b) Materials, in each case ((a) or (b)), that is
not in the public domain or otherwise publicly known; provided, however, that the fact that an item is known to the
public shall not be taken to exclude the possibility that a compilation including the item, or a development relating
to the item, is (and remains) not known to the public; provided, further, that “Know-How” includes any rights (other
than Patents but including any trade secret, copyright, database or design rights) protecting such Know-How.
1.90.
“Knowledge” means, with respect to Biosion, the actual knowledge (after making a reasonable inquiry into the
relevant subject matter) of each of the individuals listed on Schedule 1.90, in each case, as of the Effective Date.
1.91.
“Law” means, individually or collectively, any and all applicable national, supranational, regional, state and local
laws, statutes, rules, regulations, ordinances, treaties, administrative codes, guidance, judgments, decrees, directives,
injunctions, orders, permits, of or from any court, Regulatory Authority or Governmental Body having jurisdiction
over or that may be in effect from time to time and apply to a Party’s applicable activities or obligations under or in
connection with this Agreement, including GCP, GLP, GMP, Data Protection Laws, export control and economic
sanctions regulations, anti-bribery and anti-corruption laws, in each case, together with all applicable implementing
regulations for the foregoing and any foreign equivalents to any of the foregoing, as applicable.
1.92.
“Licensed Antibody” means any (a) BSI-045B Antibody; (b) BSI-502 Antibody; or (c) TSLP Antibody, as
applicable.
1.93.
“Licensed Product” means any (a) BSI-045B Product; (b) BSI-502 Product; or (c) TSLP Product, as applicable.
1.94.
“Losses” has the meaning set forth in Section 8.1.

11
1.95.
“MAA” means an application to the appropriate Regulatory Authority for approval to sell a product in any particular
country or regulatory jurisdiction, including (a) with respect to the U.S., a Biologics License Application (as more
fully defined in 21 C.F.R. 601.2 et seq. or its successor regulation) and all amendments and supplements thereto
filed pursuant to the requirements of the FDA; (b) with respect to the European Union, an application for Marketing
Approval for a biologic product filed with the EMA pursuant to the centralized approval procedure or with the
applicable national Regulatory Authority of a country in the European Union with respect to the mutual recognition
procedure, decentralized procedure or any other national approval; or (c) any equivalent marketing authorization
application submitted in any such country or regulatory jurisdiction, in each case ((a), (b) or (c)), including all
additions, deletions or supplements thereto, and as any and all such requirements may be amended, or supplemented,
at any time.
1.96.
“Manufacture” means, with respect to any compound or product (including active pharmaceutical ingredient and
other material contained therein), the performance of all activities directed to any stage of manufacture of such
compound or product, as applicable, including the planning, purchasing of materials or intermediates, making,
having made, producing, manufacturing, process development, processing, filling, finishing, packaging, labeling,
leafleting, in-process testing, waste disposal, quality control testing and quality assurance release, disposition,
sample retention, stability testing, preparation for shipping, shipping or storage of such compound or product.
1.97.
“Marketing Approval” means, with respect to a given product in a given country or regulatory jurisdiction, (a) the
approval of the applicable MAA for such product by the applicable Regulatory Authority in such country or
regulatory jurisdiction, including (i) in the United States by the FDA; or (ii) the European Union, by (x) the EMA
pursuant to the centralized approval procedure or (y) the applicable national Regulatory Authority of a country in the
European Union with respect to the mutual recognition procedure, decentralized procedure or any other national
approval and (b) receipt of any pricing or reimbursement approval, where applicable, for such product in such
country or regulatory jurisdiction (provided, however, that this clause (b) shall not apply with respect to any
Marketing Approval for a product in the United States).
1.98.
“Materials” means any physical, biological or chemical materials, including compositions of matter, assays, animal
models, drug or biologic substance samples, intermediates of drug or biologic substance samples, drug or biologic
product samples, and intermediates of drug or biologic product samples.
1.99.
“MTR” has the meaning set forth in Section 2.7(a).
1.100. “Necessary Third Party IP” has the meaning set forth in Section 5.5.
1.101. “Net Sales” means, with respect to any Licensed Product during a stated time period, the gross invoiced sales
amounts for such Licensed Product sold by or on behalf of Company, any of its Affiliates or Sublicensees (or such
Sublicensees’ Affiliates) (each, a “Selling Party”) in an arm’s length transaction to a Third Party (but not including
sales among Selling Parties unless such Selling Party is the last entity in the distribution chain of such Licensed
Product), less the following deductions from such gross amounts, in each case, to the extent such deductions are
actually incurred or accrued with respect to such Licensed Product as reported by such Selling Party in its financial
statements in accordance with such Selling Party’s applicable Accounting Standard, applied on a consistent basis:
[***]

12
provided that, in no event shall any particular amount identified above be deducted more than once in
calculating Net Sales (i.e., no “double counting” of deductions).
To the extent that a Selling Party receives consideration other than or in addition to cash upon the sale or
disposition of a Licensed Product, Net Sales will be calculated based on the average price charged for such
Licensed Product, as applicable, during the preceding royalty period, or in the absence of such sales, based
on such Selling Party’s reasonable determination of the fair market value of such Licensed Product.
Notwithstanding anything to the contrary, (A) sales of Licensed Products among Selling Parties (including
sales by any Affiliate of Company or Sublicensee to Company or another Selling Party) for resale by such
entity to a Third Party shall not be deemed a sale for purposes of this definition of “Net Sales”; provided that
the resale of such Licensed Products by such entity to such Third Party (other than a Sublicensee, but
including wholesalers and distributors) shall be deemed a sale for the purposes of this definition of “Net
Sales”; and (B) transfers or dispositions of Licensed Product for no monetary consideration: (1) in
connection with patient assistance programs, (2) for charitable or promotional purposes, (3) for preclinical,
clinical, regulatory or governmental purposes or under so-called “named patient” or other limited access
programs or (4) for use in any tests or studies, including Clinical Trials, necessary to comply with any Law
or request by a Regulatory Authority, in each case ((1), (2), (3) or (4)), shall not be deemed sales of such
Licensed Product for purposes of this definition of “Net Sales”.
For purposes of the definition of Net Sales: If any Licensed Product under this Agreement is sold in the
form of a Combination Product, and such Licensed Product and Other Components are sold separately, the
Net Sales of such Combination Product for any period shall be determined by multiplying the Net Sales (as
defined above in this Section 1.101) of such Combination Product for such period by the fraction, A/(A+B)
where A is the weighted (by sales volume) average gross sale price in a particular country of such Licensed
Product during such period when sold separately in finished form and B is the weighted average gross sale
price in such country during such period of the Other Components sold separately in finished form.
In the event that the weighted average gross sale price of such Licensed Product for a period can be
determined but the weighted average gross sale price of the Other Components cannot be determined, the
Net Sales of such Licensed Product for such period shall be calculated by multiplying the Net Sales of such
Combination Product for such period by the fraction A/C where A is the weighted average gross sale price
of such Licensed Product during such period when sold separately in finished form and C is the weighted
average gross sale price of such Combination Product during such period.
In the event that the weighted average gross sale price of the Other Components for a period can be
determined but the weighted average gross sale price of such Licensed Product for such period cannot be
determined, the Net Sales of such Licensed Product for such period shall be calculated by multiplying the
Net Sales of such Combination Product for such period by a fraction determined by the following formula:
one (1) minus B/C where B is the weighted average gross sale price of the Other Components during such
period when sold separately in finished form and C is the weighted average gross sale price of such
Combination Product during such period.

13
In the event that the weighted average gross sale price of both such Licensed Product and the Other
Components in such Combination Product cannot be determined for a period, the Net Sales of such
Licensed Product for such period shall be based upon the relative value contributed by each component.
Company shall propose to Biosion in writing a value for the weighted average gross sale price of such
Licensed Product and the Other Components in such Combination Product and the Parties shall promptly
meet to discuss, acting reasonably and in good faith, and agree upon (which agreement shall not be
unreasonably withheld) the weighted average gross sales price of such Licensed Product and the Other
Components in such Combination Product for such period. The weighted average gross sale price for such
Licensed Product, Other Components, or Combination Product for such period shall be calculated [***]
each Calendar Year and such price shall be used during all applicable reporting periods for the entire
following Calendar Year. When determining the weighted average gross sale price of a Licensed Product,
Other Components, or Combination Product for a period, the weighted average gross sale price shall be
calculated by dividing the sales by the units of active ingredient sold during the twelve (12) months (or the
number of months sold in a partial Calendar Year) of the preceding Calendar Year for such Licensed
Product, Other Components, or Combination Product. In the initial Calendar Year, a forecasted weighted
average gross sale price will be used for such Licensed Product, Other Components, or Combination
Product. Any over or under payment due to a difference between forecasted and actual weighted average
gross sale prices will be paid or credited in the first applicable payment of the following Calendar Year.
1.102. “New Affiliate” has the meaning set forth in Section 2.4(b)(ii).
1.103. “Non-Breaching Party” has the meaning set forth in Section 9.2(b)(i).
1.104. “Other Component” has the meaning set forth in Section 1.31.
1.105. “Out-of-Pocket Costs” means the actual amounts paid by or on behalf of Biosion (or any its Affiliates) to a Third
Party in connection with the performance of the applicable specific activities in connection with (a) the transfer of
Biosion Licensed Technology or other additional support provided by Biosion under the Technology Transfer Plan
pursuant to Section 2.5; or (b) the Transition Services provided by Biosion pursuant to Section 2.6, as applicable.
1.106. “Party” and “Parties” have the meaning set forth in the preamble.
1.107. “Patent Challenge” means any Proceeding (including any patent opposition or re-examination proceeding), or other
assertion of a claim in writing, challenging or denying the validity or enforceability of any claim of any Biosion
Patent, in each case, other than any such Proceeding or written assertion that (a) is in response to a subpoena or
order of a Governmental Body or Regulatory Authority with respect to a Proceeding initiated by such Governmental
Body or Regulatory Authority and not at the instigation of Company or any of its Affiliates; or (b) constitutes a
defense or counterclaim against a claim by Biosion (or any of its Affiliates) that Company or its Affiliate is
infringing such Biosion Patent.
1.108. “Patents” means any and all (a) issued or granted patents, including any extensions, supplemental protection
certificates, registrations, confirmations, reissues, reexaminations or renewals thereof; (b) pending patent
applications, including any continuations, divisionals, continuations-in-part, substitutes or provisional applications;
and (c) counterparts or foreign equivalents of any of the foregoing issued by or filed in any country or other
jurisdiction.

14
1.109. “Person” means any natural person, corporation, firm, business trust, joint venture, association, organization,
company, partnership or other business entity, or any government or agency or political subdivision thereof.
1.110.
“Phase I Clinical Trial” means any Clinical Trial of any product, the principal purpose of which is a preliminary
determination of safety, pharmacokinetics, and pharmacodynamic parameters in healthy individuals or patients, or a
similar Clinical Trial prescribed by the relevant Regulatory Authority in a country or regulatory jurisdiction, from
time to time, pursuant to Law or otherwise, including those trials referred to in 21 C.F.R. § 312.21(a), as amended,
or analogous provisions outside the United States.
1.111.
“Phase Ib Clinical Trial” means a Clinical Trial of any product, (a) the principal purpose of which is to evaluate
safety and tolerability following repeat dosing in subjects in Phase I Clinical Trial and (b) the secondary purpose of
which may be to evaluate biomarker-based or clinical endpoint-based trends of efficacy of such product on one or
more cohorts of patients or subjects, or a similar Clinical Trial prescribed by the relevant Regulatory Authority in a
country, from time to time.
1.112.
“Phase II Clinical Trial” means a Clinical Trial of any product, the principal purpose of which is a determination of
safety and efficacy in the target patient population, or a similar Clinical Trial prescribed by the relevant Regulatory
Authority in a country, from time to time, pursuant to Law or otherwise, including the trials referred to in 21 C.F.R.
§ 312.21(b), as amended, or analogous provisions outside the United States. A Phase II Clinical Trial can be
conducted as a Phase IIa Clinical Trial and Phase IIb Clinical Trial.
1.113.
“Phase IIa Clinical Trial” means a Clinical Trial of any product the principal purpose of which is to evaluate
preliminary proof of efficacy and safety of such product of patients prior to Initiation of a Phase IIb Clinical Trial, or
a similar Clinical Trial prescribed by the relevant Regulatory Authority in a country, from time to time. A Phase IIa
Clinical Trial is typically designed as a proof-of-concept study.
1.114.
“Phase IIb Clinical Trial” means a Clinical Trial of any product, the principal purpose of which is a determination
of efficacy and safety in the target population, at the intended clinical dose or doses or range of doses, on a sufficient
number of subjects and for a sufficient period of time to confirm the optimal manner of use of such product (dose
and dose regimen) prior to Initiation of the pivotal Phase III Clinical Trials, or a similar Clinical Trial prescribed by
the relevant Regulatory Authority in a country, from time to time.
1.115.
“Phase III Clinical Trial” means a registration-enabling Clinical Trial of any product that would satisfy the
requirements of U.S. 21 C.F.R. Part 312.21(c), or analogous provisions outside the United States, and is designed to:
(a) establish that the product is safe and efficacious for its intended use; (b) define contraindications, warnings,
precautions and adverse reactions that are associated with the product in the dosage range to be prescribed; and (c)
support Marketing Approval for such product in a given country or regulatory jurisdiction, or a similar Clinical Trial
prescribed by the relevant Regulatory Authority in a given country or regulatory jurisdiction.
1.116.
“Proceeding” means any action, arbitration, investigation, litigation or suit commenced, brought, conducted, or
heard by or before, or otherwise involving, any Governmental Body or arbitrator.
1.117.
“Receiving Party” has the meaning set forth in Section 6.1.
1.118.
“Region” means each of [***].

15
1.119.
“Regulatory Approval” means any and all approvals, licenses, registrations, or authorizations of the relevant
Regulatory Authority necessary for the Development, Manufacture, storage, transport or Commercialization of a
product in a particular country or regulatory jurisdiction, including any Marketing Approval or any pricing or
reimbursement approval or determination, as applicable.
1.120. “Regulatory Authority” means (a) in the U.S., the FDA; (b) in the E.U., the EMA; or (c) in any other jurisdiction
anywhere in the world, any regulatory body with similar regulatory authority over pharmaceutical products
(including the Pharmaceuticals and Medical Devices Agency in Japan).
1.121. “Regulatory Documents” means, with respect a given product, any and all applications and filings (and any
supplement or amendment thereto) made with any Regulatory Authority in a given country or regulatory
jurisdiction, including any IND, MAA or orphan drug designations, import/export applications, or any other
application for regulatory consultations or consideration (including sponsorship thereof) and any and all associated
source documents, related communication, correspondence and documentation submitted to or received from
Regulatory Authorities (including minutes and official contact reports relating to any communications with any
Regulatory Authority), regulatory drug lists, Adverse Event files and complaint files, and submissions to regulatory
advisory boards, in each case, for such compound or product.
1.122. “Regulatory Exclusivity” means, with respect to a given Licensed Product in a given country or regulatory
jurisdiction in the Territory, any exclusive marketing, data protection or other exclusive market protection conferred
by a Regulatory Authority in such country or regulatory jurisdiction with respect to such Licensed Product,
including any reference product exclusivity, pediatric exclusivity or orphan drug exclusivity, but excluding any
rights in such country or regulatory jurisdiction conferred by or based on any Patents.
1.123. “Regulatory Milestone Event” has the meaning set forth in Section 4.5.
1.124. “Regulatory Milestone Payment” has the meaning set forth in Section 4.5.
1.125. “Representatives” has the meaning set forth in Section 6.1.
1.126. “Royalty Report” has the meaning set forth in Section 4.7(c).
1.127. “Royalty Term” means, on a Licensed Product-by-Licensed Product and country-by-country basis, the period from
the First Commercial Sale of such Licensed Product in such country until the latest to occur of (a) the expiration of
the last to expire Valid Claim of a Biosion Patent exclusively licensed to Company under Section 2.1 that Covers
such Licensed Product in such country; (b) ten (10) years following the First Commercial Sale of such Licensed
Product in such country; or (c) the expiration of the last to expire Regulatory Exclusivity with respect to such
Licensed Product in such country.
1.128. “Sales Milestone Event” has the meaning set forth in Section 4.6.
1.129. “Sales Milestone Payment” has the meaning set forth in Section 4.6.
1.130. “Selling Party” has the meaning set forth in Section 1.101.
1.131. “Sublicense Agreement” means any sublicense or other agreement or arrangement pursuant to which Company (or
any of its Affiliates or Sublicensees) grants a Sublicensee a sublicense or similar rights under any of the rights or
licenses granted to Company under this Agreement,

16
including pursuant to Section 2.1; provided, however, that Sublicense Agreements shall not include any agreements
or arrangements (a) under which Company (or any of its Affiliates or Sublicensees) grant a Third Party the mere
right to purchase Licensed Antibodies or Licensed Products from Company (or any of its Affiliates or Sublicensees),
without the inclusion of any sublicense under any of the rights or licenses granted to Company under this
Agreement; and (b) with Third Party subcontractors that act solely for or on behalf of Company (or any of its
Affiliates or Sublicensees) in the supply chain for the Development, Manufacture or Commercialization of Licensed
Antibodies or Licensed Products, or that perform discrete services (as opposed to being granted broad rights or
responsibilities) on behalf of Company (or any of its Affiliates or Sublicensees).
1.132. “Sublicense Income” means the gross amount of cash consideration and the monetary value of any in-kind or non-
monetary (e.g., equity) consideration that is paid by any Sublicensee to Company or any of its Affiliates under a
Sublicense Agreement in consideration for the grant of a sublicense or similar rights under any of the rights or
licenses granted to Company under this Agreement, including any such consideration in the form of up-front fees,
annual fees, milestone payments (including development, regulatory and commercial milestones), earn-outs,
contingent payments or other monetary or non-monetary consideration; provided, however, that “Sublicense
Income” shall not include (a) any sales-based income, including royalties or profit/revenue share payments based on
sales of Licensed Products; (b) milestone payments for the achievement by a Sublicensee of a regulatory milestone
event or sales milestone event that is the same as, or substantially similar to, any Regulatory Milestone Event or
Sales Milestone Event for which Company is obligated to pay Biosion a Regulatory Milestone Payment or Sales
Milestone Payment hereunder, as applicable (provided, however, that, Sublicense Income shall include any portion
of such milestone payment paid by such Sublicensee to Company which exceeds the applicable Regulatory
Milestone Payment or Sales Milestone Payment payable by Company to Biosion for such Sublicensee’s
achievement of such same, or substantially similar, Regulatory Milestone Event or Sales Milestone Event, as
applicable); (c) amounts actually paid, or stipulated in a sublicense to be paid, specifically to cover actual,
reasonable and documented fully-burdened costs incurred by Company or its Affiliates after the execution of such
sublicense in the performance of Development, Manufacturing or Commercialization of a Licensed Product that is
covered by such Sublicense Agreement; (d) payments for supply of Licensed Antibodies or Licensed Products (other
than with respect to any commercial sale of Licensed Product for monetary value in an arms-length transaction to a
Third Party end-user); (e) reimbursement of out-of-pocket costs and expenses incurred by Company in the
prosecution or enforcement of Biosion Patents within the scope of such licenses granted to Company under Article
5; (f) amounts received from a Sublicensee in consideration for the issuance of equity in Company or any Affiliate
in connection with the issuance, sale or distribution of capital stock of Company or any of its Affiliates at its then-
current fair market value; and (g) amounts received from a Sublicensee in connection with a bona fide, fully
repayable, market rate loan made by Sublicensee to Company or any of its Affiliates; provided, further, that in the
case of Sublicense Income in the form of a premium paid solely by Sublicensee in exchange for the issuance of
equity in Company or any of its Affiliates, or Sublicense Income in the form of in-kind or non-monetary
consideration, the monetary value of such equity and consideration will be agreed by the Parties, acting reasonably
and in good faith or, in the event that no such agreement can be achieved after a reasonable time, determined by an
independent Third Party accounting or valuation firm reasonably acceptable to Biosion and Company and the
conclusion of such firm shall be binding on the Parties. For purposes of this Agreement, if a Sublicense Agreement
grants a sublicense under the Biosion Licensed Technology, on the one hand, together with any other intellectual
property that is necessary or useful to exploit the applicable Licensed Antibodies or Licensed Products in the Field
in the Company Territory or any compound or product that is not a Licensed Antibody or Licensed Product, on the
other hand, then, Sublicense Income will exclude consideration received by Company from a Sublicensee that is
allocable to such other intellectual property, compound or

17
product; provided that, in such event, the Parties will discuss the matter in good faith and use reasonable efforts to
agree upon an allocation of such consideration under which a portion of such consideration will be allocated to the
sublicense of the rights granted pursuant to this Agreement (i.e., as Sublicense Income) and the remainder of such
consideration will be allocated to such other intellectual property, compounds or products; provided, further, that, if
the Parties cannot agree on such allocation after a reasonable time, then, such allocation shall be determined by an
independent Third Party accounting or valuation firm reasonably acceptable to Biosion and Company and the
conclusion of such firm shall be binding on the Parties.
1.133. “Sublicensee” means (a) any Third Party to which Company or any of its Affiliates has granted or grants any
sublicense or similar rights under any of the rights or licenses granted to Company under this Agreement, including
pursuant to Section 2.1; and (b) any further sublicensee of such Third Party or any of its respective Affiliates
(regardless of the number of tiers, layers or levels of sublicenses), in each case, as permitted under this Agreement;
provided that “Sublicensee” shall exclude any Third Party subcontractors performing on behalf of Company (or any
of its Affiliates or Sublicensees) for purposes of this Agreement.
1.134. “Tax” means any federal, state, local or foreign income, gross receipts, license, payroll, employment, excise,
severance, stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock, franchise,
profits, withholding, social security, unemployment, disability, real property, personal property, sales, use, transfer,
registration, value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever imposed,
collected or assessed by, or payable to a Tax Authority, including any interest, penalty, or addition thereto, whether
disputed or not.
1.135. “Tax Authority” means any government, state or municipality or any local state, federal or other authority, body or
official anywhere in the world exercising a fiscal, revenue, customs or excise function (including, but not limited to,
His Majesty’s Revenue & Customs).
1.136. “Technology Transfer Plan” has the meaning set forth in Section 2.5(a).
1.137. “Term” has the meaning set forth in Section 9.1(a).
1.138. “Terminated Antibody” has the meaning set forth in Section 9.3(a).
1.139. “Terminated Product” has the meaning set forth in Section 9.3(a).
1.140. “Terminated Territory” has the meaning set forth in Section 9.3(a).
1.141. “Termination and Wind-Down Plan” has the meaning set forth in Section 9.3(b).
1.142. “Third Party” means any Person other than Company, Biosion or any of their respective Affiliates.
1.143. “Third Party Action” means any claim or other similar action made by a Third Party against either Party (or any of
its Affiliates or Sublicensees) that claims that any Licensed Antibody or Licensed Product, or its Development,
Manufacture or Commercialization, infringes or misappropriates such Third Party’s intellectual property rights.
1.144. “Third Party Agreement” has the meaning set forth in Section 5.5.

18
1.145. “Third Party CDMO” means any Third Party performing Manufacturing of any Licensed Antibody or Licensed
Product on behalf of Biosion or any of its Affiliates immediately prior to the Effective Date, including [***].
1.146. “Third Party Claims” has the meaning set forth in Section 8.1.
1.147. “Third Party Infringement” has the meaning set forth in Section 5.3(a).
1.148. “Third Party Payments” has the meaning set forth in Section 4.7(e).
1.149. “Transition Period” has the meaning set forth in Section 2.6(a).
1.150. “Transition Services” has the meaning set forth in Section 2.6(a).
1.151. “Tripartite CTTQ Agreement” has the meaning set forth in Section 1.43.
1.152. “TSLP” means thymic stromal lymphopoietin.
1.153. “TSLP Antibody” means [***]; provided that, in each case ((a), (b) or (c)), TSLP Antibodies shall exclude any
BSI-045B Antibody or BSI-502 Antibody.
1.154. “TSLP Product” means any product that incorporates, constitutes, contains, comprises or utilizes a TSLP Antibody,
in any and all forms, presentations, strengths, doses, formulations or regimens, including any Combination Product
thereof; provided that TSLP Product shall exclude any product that incorporates, constitutes, contains, comprises or
utilizes any BSI-502 Antibody.
1.155. “United States” or “U.S.” means the United States of America and its territories and possessions.
1.156. “Valid Claim” means (a) a claim of an issued and unexpired Patent (including any extensions) which has not lapsed
or been revoked, abandoned or held unpatentable, unenforceable or invalid by a final decision of a Governmental
Body of competent jurisdiction that is unappealable or unappealed within the time allowed for appeal, and which has
not been disclaimed, denied or admitted to be invalid or unenforceable through reissue, reexamination or disclaimer
or otherwise; or (b) a pending claim of an unissued, pending patent application (i) which has not been abandoned,
withdrawn, cancelled, disallowed, rejected, revoked, held invalid, or declared unpatentable or unenforceable by a
final decision of a Governmental Body of competent jurisdiction that is unappealable or unappealed within the time
allowed for appeal and (ii) which application has not been pending for more than seven (7) years from the earliest
priority date of such application which such pending claim is entitled to benefit.
1.157. “VAT and Indirect Taxes” means any value added, sales, purchase, turnover or consumption tax as may be
applicable in any relevant jurisdiction, including but not limited to value added tax chargeable under legislation
implementing EU Council Directive 2006/112/EC on the common system of value added tax.
1.158. “Warrant” has the meaning set forth in Section 4.2.

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ARTICLE 2
LICENSES AND OTHER RIGHTS
2.1
Grant of License to Company. Subject to the terms and conditions of this Agreement, Biosion hereby grants to
Company (a) an exclusive (even as to Biosion and its Affiliates, subject to Section 2.3), non-transferable (except as
set forth in Section 11.2(a)), royalty-bearing license, with the right to sublicense (subject to Section 2.2) under the
Biosion Licensed Technology to (i) Develop and Manufacture any Licensed Antibodies and Licensed Products and
(ii) Commercialize any Licensed Products, in each case ((i) and (ii)), in the Field in the Company Territory; and (b)
an exclusive (even as to Biosion and its Affiliates, subject to Section 2.3), non-transferable (except as set forth in
Section 11.2(a)), royalty-free license, with the right to sublicense (subject to Section 2.2) under the Biosion Licensed
Technology to (i) Develop any Licensed Antibodies and Licensed Products in the Excluded Territory and (ii)
Manufacture any Licensed Antibodies and Licensed Products in the Excluded Territory, in each case ((i) and (ii)),
solely for the purpose of Developing any Licensed Antibodies or Licensed Products, or Commercializing any
Licensed Products, in the Field in the Company Territory.
2.2
Sublicenses. Subject to the terms and conditions of this Agreement, Company shall have the right, in its sole
discretion, to grant sublicenses (with or without the right to grant further sublicenses through multiple tiers), in
whole or in part, under the licenses granted in Section 2.1 to any of its Affiliates or any Third Party; provided that:
(a) the granting by Company (or such Affiliate or Sublicensee, as applicable) of such sublicense, or the performance
by an Affiliate or Sublicensee of any of Company’s obligations hereunder, shall not relieve Company of any of its
obligations under this Agreement, except to the extent such obligations are successfully performed by any such
Affiliate or Sublicensee, and Company shall remain responsible for the performance of any of its obligations by any
of its Affiliates or Sublicensees which remain unfulfilled; (b) any such Sublicense Agreement shall be in writing and
subject to, and consistent with, the terms and conditions of this Agreement, including obligations of confidentiality
and non-use which are no less stringent than those set forth in Article 6; (c) Company shall provide Biosion with a
copy of any Sublicense Agreement pursuant to which Company (or any of its Affiliates or Sublicensees) has granted
to any Third Party any exclusive sublicense under any of the licenses granted to Company pursuant to Section 2.1
(together with all relevant schedules, exhibits, and referenced documents), or any amendment thereto, within [***]
days after its execution (provided that Company shall have the right to redact from such copy any confidential or
commercially sensitive terms to the extent not pertinent to either Party’s rights or obligations under this Agreement
or verification of compliance with the requirements of this Agreement); and (d) Company shall remain liable for any
act or omission of any of Company’s Affiliates or its or their respective Sublicensees and, to the extent that any such
act or omission would constitute a breach of this Agreement by Company of this Agreement if such act or omission
were taken or made by Company directly, such act or omission shall be deemed a breach of this Agreement by
Company and such Affiliate or Sublicensee.
2.3
Retained Rights; No Implied Licenses.
(a)
No right or license is granted to either Party hereunder by implication, estoppel, or otherwise to any Know-
How, Patents or other intellectual property right owned or otherwise Controlled by the other Party or its Affiliates,
except as expressly set forth in this Agreement. Company will not (and shall ensure that its Affiliates and require
that its Sublicensees and any other Third Party performing on behalf of Company, its Affiliates or Sublicensees shall
not) practice or otherwise exploit the Biosion Licensed Technology outside the scope of the licenses grant to
Company under Section 2.1 or otherwise in violation of this Agreement. Notwithstanding anything

20
to the contrary set forth herein, the license or rights granted to Company under this Agreement, including pursuant
to Section 2.1, shall not include any license or right under the Biosion Licensed Technology (or any other Know-
How, Patents or other intellectual property right owned or otherwise Controlled by Biosion or any of its Affiliates)
to Develop, Manufacture or Commercialize any other active therapeutic ingredient(s) that are not a Licensed
Antibody or any product that is not a Licensed Product.
(b)
Notwithstanding anything to the contrary set forth herein, including the exclusive licenses granted to
Company under Section 2.1, Biosion retains non-exclusive rights under the Biosion Licensed Technology as
necessary to perform (either itself, or through its Affiliates, licensees, sublicensees or subcontractors, as applicable)
its obligations under this Agreement (including under the Technology Transfer Plan and Section 2.6, as applicable).
(c)
All rights in and to Biosion Licensed Technology not expressly licensed to Company under this Agreement
are hereby retained by Biosion (or its Affiliates, as applicable). Without limiting the foregoing, but subject to Section
2.4, as between the Parties, Biosion hereby retains the exclusive right to practice, use or reference (including the
right to grant licenses or sublicenses thereunder through multiple tiers) any Biosion Licensed Technology to
Develop, Manufacture or Commercialize (i) any Licensed Product in the Excluded Territory (provided that
Company shall have the right to (A) Develop any Licensed Antibodies and Licensed Products in the Excluded
Territory and (B) Manufacture any Licensed Antibodies and Licensed Products in the Excluded Territory, in each
case ((A) and (B)), solely for the purpose of Developing any Licensed Antibodies or Licensed Products, or
Commercializing any Licensed Products, in the Field in the Company Territory) or (ii) any Antibody that is not a
Licensed Antibody and any product that is not a Licensed Product in any field or territory (including with respect to
any such Antibody, or product that incorporates, constitutes, contains, comprises or utilizes such Antibody, that is
designed to bind to [***]).
2.4
Exclusivity.
(a)
Subject to Section 9.3(h), as applicable, except for the performance of any of its obligations under this
Agreement (including under the Technology Transfer Plan and Section 2.6, as applicable), to the extent permitted
under Law, during the Term, Biosion shall not (and shall cause its Affiliates to not) (i) conduct, itself or with or
through any Third Party, any program to Develop, Manufacture or Commercialize any product that comprises or
incorporates an Antibody (including any individual fragments or conjugates of an Antibody) that is designed to
[***]; or (ii) grant any rights or licenses to any Third Party (A) to conduct any such program; or (B) grant any rights
or licenses which are inconsistent with the exclusive rights granted to Company hereunder; provided that,
notwithstanding anything to the contrary set forth herein, nothing in this Section 2.4(a) shall limit Biosion’s (or any
of its Affiliates’) right (x) to perform any of its obligations under this Agreement (including under the Technology
Transfer Plan and Section 2.6, as applicable) or any of the CTTQ Agreements, including the right to grant the
licenses and rights granted to CTTQ under the CTTQ Agreements; or (y) to Develop, Manufacture or
Commercialize the Existing BSI-502 Product in the Excluded Territory or to grant any licenses or other rights to
CTTQ (or any of its Affiliates) to Develop, Manufacture or Commercialize the Existing BSI-502 Product in the
Excluded Territory.
(b)
Notwithstanding Section 2.4(a):
(i)
in the event that, in the conduct of non-clinical or pre-clinical activities by personnel of Biosion (or
any of its Affiliates) such personnel unintentionally discover or develop

21
any product designed to [***], the Development, Manufacture or Commercialization of which would otherwise
violate Biosion’s exclusivity obligations set forth in Section 2.4(a) (such product, a “Competing Product”), such
personnel’s discovery or development of such Competing Product will not constitute a breach by Biosion of its
exclusivity obligations set forth in Section 2.4(a), as long as Biosion ceases all Development of such Competing
Product upon discovery thereof; and
(ii)
 in the event that a Third Party becomes an Affiliate of Biosion during the Term through merger,
acquisition, consolidation, Change of Control or other similar transaction (any such Third Party, thereafter, a “New
Affiliate”), which New Affiliate, as of the execution date of the definitive agreement with respect to such
transaction, is engaged in the conduct of activities that, if conducted by Biosion, would violate Biosion’s exclusivity
obligations set forth in Section 2.4(a) (such activities, a “Competing Program”), then:
(A) If such transaction results in a Change of Control of Biosion, then, the applicable Acquirer may
continue to conduct such Competing Product, and Biosion will not be in violation of its exclusivity obligations set
forth in Section 2.4(a) as long as (1) no Confidential Information of Company or Biosion Licensed Technology is
used or referenced by or on behalf of such Acquirer in connection with any activities conducted under such
Competing Program; and (2) Biosion, such Acquirer and their Affiliates institute commercially reasonable technical
and administrative safeguards to ensure the requirements set forth in the foregoing clause (1) are met, including by
creating appropriate “firewalls” with respect to the employees of such Acquirer working under such Competing
Program; or
(B) With respect to any such transaction that does not result in a Change of Control of Biosion, then,
Biosion will not be in violation of its exclusivity obligations set forth in set forth in Section 2.4(a) as long as Biosion
and any New Affiliate of Biosion as a result of such transaction (such New Affiliate, together with any of its
Affiliates that also became New Affiliates of Biosion as a result of such transaction, each, an “Acquiree”) takes one
of the following actions within [***] days following the date of consummation of the relevant acquisition
transaction: (1) divest, or cause its Acquiree to divest, whether by license or otherwise, its interest in such
Competing Program; or (2) terminate any further activities with respect to such Competing Program; provided that,
prior to the completion of such termination or divestiture, as applicable, such Acquiree’s conduct of such Competing
Program in the ordinary course will not constitute a breach by Biosion of its exclusivity obligations set forth in
Section 2.4(a) as long as during such period, (x) no Confidential Information of Company or Biosion Licensed
Technology is used or referenced by or on behalf of such Acquiree in connection with any activities conducted under
such Competing Program; and (y) Biosion, such Acquiree and their Affiliates institute commercially reasonable
technical and administrative safeguards to ensure the requirements set forth in the foregoing clause (1) are met,
including by creating appropriate “firewalls” with respect to the employees of such Acquiree working under such
Competing Program.
2.5
Technology Transfer.
(a)
Promptly following the Effective Date, the Parties shall conduct a technology transfer of all Biosion
Licensed Technology to Company (or its designee) in accordance with a written technology transfer plan mutually
agreed by the Parties to effect such technology transfer, which shall include, at a minimum, (i) the Parties’ respective
obligations with respect to such technology transfer, including goals and timelines for the achievement of such
technology transfer, and (ii) agreed criteria for determining whether such technology transfer has been completed
(such plan, the “Technology Transfer Plan”). An initial draft of the Technology Transfer Plan is attached hereto as
Schedule 2.5. The Parties may amend the Technology Transfer Plan by mutual agreement.

22
(b)
Each Party shall perform its respective obligations under and in accordance with the Technology Transfer
Plan; provided that each Party shall use Commercially Reasonable Efforts to complete the applicable technology
transfer activities allocated to such Party in accordance with the agreed timelines set forth in the Technology
Transfer Plan.
(c)
Following the completion of the activities under the Technology Transfer Plan and from time to time during
the Term, upon Company’s reasonable request, Biosion agrees to make its employees with relevant knowledge
regarding the Licensed Antibodies, the Licensed Products and the Biosion Licensed Technology available to
Representatives of Company (which may be via telephone or electronic communication) on a mutually convenient
basis to provide scientific and technical explanations to Company related to the Development, Manufacture and
Commercialization of Licensed Antibodies and Licensed Products and to discuss with such Company personnel any
follow-up concerns or questions with respect thereto.
(d)
Each Party shall be responsible for its own costs incurred in connection with performing its obligations
under the Technology Transfer Plan and this Section 2.5; provided, however, that (i) Company shall reimburse
Biosion for any reasonable Out-of-Pocket Costs incurred by or on behalf of Biosion in connection the performance
of its obligations under the Technology Transfer Plan (provided that the Parties shall agree in advance upon a budget
for any such Out-of-Pocket Costs to be paid by Company hereunder, including the scope of the activities to be
performed), and (ii) as between the Parties, Company shall be solely responsible for any costs incurred in connection
with any Manufacturing technology transfer related to any Licensed Antibody or Licensed Product from any Third
Party CDMO (or any of its Affiliates or subcontractors) to Company (or its designee).
2.6
Transition Services.
(a)
Upon the terms and subject to the conditions contained herein, including Section 4.3, Biosion agrees to use
Commercially Reasonable Efforts to (or to cause one or more of its Affiliates to use Commercially Reasonable
Efforts to) provide to Company the services listed in Schedule 2.6 (the “Transition Services”), in each case, for the
applicable period specified for such Transition Service in Schedule 2.6 (each, a “Transition Period”). From time to
time, the Parties may modify any Transition Service or the corresponding Transition Period by mutual written
agreement; provided, however, that Biosion will not unreasonably withhold, delay or condition its consent to any
reasonable request to extend any Transition Services beyond its corresponding Transition Period.
(b)
Notwithstanding anything to the contrary set forth herein, nothing in this Agreement shall require Biosion
(or any of its Affiliates) to perform or cause to be performed any Transition Services or any other obligation in a
manner that would constitute a violation of (i) applicable Law, (ii) any contract to which Biosion (or any of its
Affiliates) is a party, (iii) the certificate of incorporation or by-laws (or the comparable governing instruments) of
Biosion (or any of its Affiliate) or (iv) the rights of any Third Party (including in the event that the provision of a
Transition Service requires the consent of a Third Party which has not been obtained).
(c)
Biosion (or any of its Affiliates) may subcontract or otherwise delegate the performance of all or any of its
obligations under this Agreement (including, for the avoidance of doubt, any of the Transition Services) to any of its
Affiliates or any Third Party subcontractor solely to the extent such subcontract or delegation does not conflict with
Law. If, in accordance with the foregoing, Biosion exercises its rights or performs its obligations under this
Agreement through an Affiliate or Third Party subcontractor, then, Biosion shall remain responsible for the acts,
omissions and

23
performance of such Affiliate or Third Party subcontractor as if such acts, omissions and performance had been
provided by Biosion itself under this Agreement. For the avoidance of doubt, except as may be set forth in a separate
written agreement by the Parties, without limiting Biosion’s obligations hereunder, neither Biosion nor any of its
Affiliates are under any obligation to second or procure the secondment to Company of any employee or other
personnel in connection with the provision of the Transition Services. The Parties hereto agree that nothing in this
Agreement is intended to transfer the employment of any employees, contract employees or secondees of Biosion or
its respective Affiliates engaged in the provision of any Transition Services from Biosion to Company.
(d)
Company hereby grants to Biosion (and its Affiliates) a limited, worldwide, fully paid-up, royalty-free, non-
exclusive license under any Patent, Know-How (including any data, reports, documents or Regulatory Documents,
along with copies of the foregoing) or other intellectual property right that (i) Company (or any of its Affiliates)
owns or otherwise Controls and (ii) is necessary or reasonably useful for the performance of the Transition Services,
with the right to grant and authorize sublicenses, subject to written notice to Company, solely for the purposes of
performing the Transition Services and for no other purpose. Biosion (and its Affiliates) may grant sublicenses under
the foregoing license to subcontractors of Biosion (or any of its Affiliates) to the extent necessary for such
subcontractors to perform, or to enable Biosion (or any of its Affiliates) to perform, the Transition Services, in each
case, pursuant to the terms of this Agreement.
(e)
Company (itself or through its Affiliates) shall, at its sole cost and expense, reasonably cooperate with
Biosion in connection with the performance of the Transition Services hereunder, including providing to Biosion (or
its designee) such information or materials (including quantities of Licensed Antibodies or Licensed Products, as
applicable) as may be reasonably needed for Biosion to perform such Transition Service in accordance with this
Agreement. In the event that Company fails to provide any such information or materials, upon Biosion’s request,
the Alliance Managers of the Parties shall discuss and work together in good faith to resolve any impact such failure
may have to the provision of the relevant Transition Service. Notwithstanding anything to the contrary set forth
herein, if Biosion is ready, able and willing to perform or deliver a given Transition Service pursuant to this
Agreement and Company either communicates to Biosion that it is not prepared to receive such Transition Service,
or fails to provide the requisite information or materials necessary for Biosion to perform or deliver such Transition
Service within [***] Business Days from Biosion’s delivery of notice that it is ready to perform or deliver the same,
then, (i) by written notice to Biosion, Company may extend the timeline by no more than [***] days for such
Transition Service; provided that no timeline(s) (e.g., the applicable Transition Period set forth in Schedule 2.6)
associated with such Transition Service shall be extended beyond [***]days, unless otherwise mutually agreed by
the Parties, (ii) Biosion shall be relieved of its obligation to perform such Transition Service for so long as such
failure to accept such Transition Service or to provide such information or material continues, and (iii) any
additional costs incurred by either Party as a result of Company’s failure to accept such Transition Service or to
provide such information or material, in each case, causing a delay of more than [***] days from such date as set
forth in the original timeline as set forth in Schedule 2.6, shall be solely borne by Company.
(f)
Biosion’s obligations and rights under this Section 2.6 shall continue with respect to each Transition Service
until the expiration of the corresponding Transition Period, unless such Transition Service is earlier terminated
pursuant to this Section 2.6(f) or this Agreement is earlier terminated pursuant to Section 9.2, as applicable (in
which case, Biosion’s obligations with respect to such Transition Service shall cease upon the effective date of such
earlier termination). During the applicable Transition Period for any Transition Service, Company may elect to
terminate Biosion’s provision of such Transition Service by delivering written notice of such election to

24
Biosion in accordance with this Agreement, which termination will be effective no earlier than [***] days following
delivery of such notice, unless Biosion consents to a shorter period; provided, however, that Company shall pay
Biosion for any FTE Costs and Out-of-Pocket Costs incurred with respect to such terminated Transition Service in
accordance with Section 4.3 prior to the effective date of such termination, together with any such pre-approved
costs contracted for by Biosion, or any other pre-approved non-cancellable obligations of Biosion incurred, prior to
such effective date in connection with such terminated Transition Service.
2.7
Biosion Materials Transfer.
(a)
Except as otherwise mutually agreed by the Parties (including under the Technology Transfer Plan) and
subject to the terms and conditions of this Agreement, promptly following the Effective Date (and no later than
[***] days after the Effective Date), Biosion will transfer to Company (or its designated Affiliate or Sublicensee) the
Biosion Materials, [***] cost, together with a material transfer record in the form attached hereto as Schedule 2.7
(the “MTR”).
(b)
Company shall (and shall cause its Affiliates or require its Sublicensees that receive any Biosion Materials,
as applicable, to) use, store and handle any Biosion Materials transferred pursuant to this Agreement in compliance
with the requirements under the MTR and solely for use in the Development, Manufacturing or Commercialization
of Licensed Products in the Field in the Company Territory in accordance with the applicable terms and conditions
of this Agreement and in compliance with Laws. Without limiting the foregoing, Company shall not (and shall cause
its Affiliates or require its Sublicensees to not) (i) administer Biosion Materials to any human subjects, including in
connection with any Clinical Trials, or use for diagnostic purposes involving human subjects, in each case, except to
the extent expressly provided otherwise in the MTR, or (ii) use any Biosion Materials in any animals kept as
domestic pets. As between the Parties, Company shall assume all liability for any damages or liabilities arising or
resulting from the use, storage or disposal of such Biosion Materials by or on behalf of Company, including any
administration to human subjects, after such Biosion Materials have been received by Company from Biosion. Upon
termination of this Agreement in its entirety, as applicable, except for any continuing rights as set forth in this
Agreement (including as set forth in Section 9.3, as applicable), Company shall (and shall cause its Affiliates or
require its Sublicensees that receive any Biosion Materials, as applicable, to) discontinue its use of any Biosion
Materials and shall, upon written direction of Biosion, return or destroy (and certify destruction of) any remaining
Biosion Material in Company’s possession (or Company’s Affiliates’ or Sublicensees’ possession, as applicable) in
compliance with Law.
(c)
EXCEPT TO THE EXTENT OTHERWISE EXPRESSLY SET FORTH IN Article 7, (A) ANY BIOSION
KNOW-HOW OR BIOSION MATERIALS DELIVERED BY OR ON BEHALF OF BIOSION PURSUANT TO
THIS AGREEMENT, INCLUDING, PURSUANT TO THIS SECTION 2.7, ARE SUPPLIED IN “AS IS”
CONDITION WITH NO WARRANTY, EXPRESS, IMPLIED OR STATUTORY, INCLUDING WARRANTIES
OF MERCHANTABILITY, TITLE, OR FITNESS FOR A PARTICULAR PURPOSE; AND (B) ANY BIOSION
MATERIALS DELIVERED PURSUANT TO THIS AGREEMENT ARE UNDERSTOOD TO BE
EXPERIMENTAL IN NATURE AND MAY HAVE HAZARDOUS PROPERTIES. EXCEPT TO THE EXTENT
OTHERWISE EXPRESSLY SET FORTH HEREIN, INCLUDING PURSUANT TO ARTICLE 8, COMPANY
ASSUMES ALL LIABILITY FOR ANY DAMAGES THAT ARISING OR RESULTING FROM ITS USE,
STORAGE OR DISPOSAL OF ANY BIOSION MATERIALS.
2.8
Existing Inventory Transfer. Promptly following the Effective Date (and no later than [***] days after the
Effective Date), Biosion shall transfer (or have transferred), at [***] cost, the Existing

25
Inventory to Company FCA (Incoterms 2020) at the applicable location as set forth on Schedule 1.68 for use in the
Development of Licensed Products in the Field in accordance with this Agreement.
2.9
CTTQ Agreements.
(a)
During the Term, Biosion (a) will not enter into, amend, modify or terminate any CTTQ Agreement in a
manner that would reasonably be expected to adversely affect the rights or licenses granted to Company hereunder
in any material respect or increase any obligations of Company in connection therewith in any material respect, in
each case, without the prior written consent of Company; and (b) will not intentionally breach any CTTQ Agreement
in any material respect in a manner that would reasonably be expected to result in CTTQ terminating such CTTQ
Agreement or otherwise diminish in any material respect the scope or exclusivity of the licenses or other rights
licensed to Company hereunder. Biosion shall promptly notify Company in writing of any written notice it receives
from CTTQ that alleges that Biosion (or Company) is in breach of the applicable CTTQ Agreement in a manner that
would reasonably be expected to adversely affect rights or licenses granted to Company hereunder.
(b)
During the Term, to the extent that Biosion (or its Affiliates) Develops, Manufacturers or Commercializes
the Existing BSI-502 Product in the Excluded Territory, (i) Biosion shall grant, and hereby does grant, to Company
all of the rights, licenses, agreements and covenants granted by CTTQ to Company under the Tripartite CTTQ
Agreement; and (ii) Company shall grant, and hereby does grant, to Biosion all of the rights, licenses, agreements
and covenants granted by Company to CTTQ under the Tripartite CTTQ Agreement; provided that, in each case,
such rights, licenses, agreements and covenants, as the case may be, shall be granted with respect to the Existing
BSI-502 Product, mutatis mutandis.
ARTICLE 3
DEVELOPMENT, MANUFACTURE AND COMMERCIALIZATION OF LICENSED PRODUCTS
3.1
Development. Subject to the terms and conditions of this Agreement, Company shall have the exclusive right, and
sole responsibility and decision-making authority (either itself or through its Affiliates, Sublicensees or, subject to
Section 3.5, any of its or their subcontractors, or Biosion pursuant to the Technology Transfer Plan and Section 2.6,
as applicable) to Develop Licensed Products in the Field (a) in the Company Territory; and (b) in the Excluded
Territory solely for the purpose of Developing the Licensed Antibodies or Licensed Products or Commercializing
the Licensed Products in the Company Territory, including to conduct all non-clinical studies and Clinical Trials that
Company believes appropriate in order to obtain Regulatory Approval for Licensed Products in the Company
Territory. Promptly following the Effective Date, Company shall prepare and deliver to Biosion a written plan
setting forth [***] (the “Development Plan”). Company (in its sole discretion) may update the Development Plan
by providing a written amendment to Biosion’s Alliance Manager.
3.2
Commercialization. Subject to the terms and conditions of this Agreement, Company shall have the exclusive right,
and sole responsibility and decision-making authority (either itself or through its Affiliates, Sublicensees or, subject
to Section 3.5, any of its or their subcontractors), in all matters relating to the Commercialization of Licensed
Products in the Field in the Company Territory.

26
3.3
Manufacturing. Subject to the terms and conditions of this Agreement, Company shall have the exclusive right and
sole responsibility and decision making authority to Manufacture (either itself or through its Affiliates, Sublicensees
or, subject to Section 3.5, any of its or their subcontractors, or Biosion pursuant to the Technology Transfer Plan and
Section 2.6, as applicable) Licensed Products in the Field (a) in the Company Territory; and (b) in the Excluded
Territory solely for the purpose of Developing the Licensed Antibodies or Licensed Products or Commercializing
the Licensed Products in the Company Territory.
3.4
Diligence.
(a)
Company shall use Commercially Reasonable Efforts to (i) Develop and seek Regulatory Approval for
[***] BSI-502 Product and [***] BSI-045B Product in the Company Territory and (ii) after receiving the applicable
Regulatory Approval for any Licensed Product in a given country or regulatory jurisdiction in the Company
Territory, Commercialize such Licensed Product in such country or regulatory jurisdiction, as applicable.
(b)
Without limiting Section 3.4(a), Company shall use Commercially Reasonable Efforts to [***], in each case,
in accordance with the Development Plan.
(c)
For the avoidance of doubt, activities conducted by Company’s Affiliates, Sublicensees and Third Party
subcontractors selected by Company (or any of its Affiliates or Sublicensees) will be considered as Company’s
activities under this Agreement for purposes of determining whether Company has complied with its obligations
under this Section 3.4.
3.5
Subcontracting. Subject to the terms and conditions of this Agreement, Company (and its Affiliates and
Sublicensees) may exercise any of its rights, or perform any of its obligations, under this Agreement (including any
of the rights licensed under Section 2.1) by subcontracting the exercise or performance of all or any portion of such
rights and obligations on Company’s (or such Affiliate’s or Sublicensee’s, as applicable) behalf. Any subcontract
granted or entered into by Company (or its Affiliate or Sublicensee) as contemplated by this Section 3.5 (a) shall not
relieve Company (or such Affiliate or Sublicensee, as applicable) from any of its obligations under this Agreement,
except to the extent such obligations are successfully performed by any such subcontractor; and (b) shall be
consistent with Company’s rights and obligations under this Agreement, including obligations of confidentiality and
non-use which are no less stringent than those set forth in Article 6. Company shall remain liable for the acts and
omissions of any of its (or any of its Affiliates’ or Sublicensees’, as applicable) subcontractors in connection with
their performance of any of its obligations or exercise of any of its rights hereunder, as applicable.
3.6
Trademarks. As between Biosion and Company, Company shall have the sole authority to select trademarks for any
Licensed Products in the Field in the Company Territory and Company shall own all such trademarks.
3.7
Information Rights. On a Licensed Product-by-Licensed Product basis, on [***] (or as otherwise agreed by the
Parties) until [***] of such Licensed Product in the Company Territory, Company shall provide Biosion with a high-
level report on the status of the Development of each Licensed Product in the Company Territory (each, a
“Development Report”), which Development Report shall include [***]. Without limiting the foregoing, (a)
Biosion shall have the right to reasonably request information from Company regarding the Development of any
Licensed Product in the Company Territory under this Agreement and Company shall use reasonable efforts to
promptly respond to such request, including to provide copies of any requested information, to the extent that such
information is in the possession of, or reasonably accessible to, Company (or its Affiliates or

27
Sublicensee) at the time of such request (provided, however, that Company shall not be obligated to provide to
Biosion (i) any information that it is prohibited from providing due to Third Party confidentiality obligations or (ii)
any commercially sensitive information to the extent not pertinent to either Party’s rights or obligations under this
Agreement or verification of compliance with the requirements of this Agreement, as applicable); and (b) upon
Biosion’s reasonable request, Company agrees to meet with Biosion (via teleconference or videoconference) to
discuss the scientific progress and planned Development of the Licensed Products in the Company Territory, which
meeting shall be scheduled at a mutually agreeable date and time.
3.8
Recordkeeping. Each Party shall, and shall cause its Affiliates and require its Sublicensees or any other Third Party
subcontractors performing on behalf of such Party (or any of its Affiliates or Sublicensees) to, maintain written
records with respect to (a) Company, the Development of any Licensed Products hereunder; or (b) Biosion, the
performance of the Transition Services pursuant to Section 2.6, in each case ((a) or (b)), for such period in
accordance with its own policy and otherwise in accordance with Law; provided that (i) any such records shall
comprise sufficient detail, in a good scientific manner, in accordance with Laws and in a manner appropriate for
regulatory and patent purposes as contemplated hereunder, and (ii) each Party shall record only such Development
activities or Transition Services, as applicable, and not include, or be commingled with, any records of activities
outside the scope of this Agreement. Company (or its authorized representatives) shall have the right, during normal
business hours and upon reasonable advance notice, to inspect and copy any such records kept by or on behalf of
Biosion in accordance with this Section 3.8 to verify Biosion’s compliance with its obligations under this
Agreement; provided that Biosion shall have the right to reasonably redact from any such copy of such records made
available to Company pursuant to this Section 3.8 any confidential or commercially sensitive information of Biosion
to the extent not pertinent to the verification of its compliance with its obligations under this Agreement.
3.9
Compliance with Laws. Each Party shall, and shall cause its Affiliates and require is Sublicensees (or any other
Third Party subcontractors performing on behalf of such Party or any of its Affiliates or Sublicensees) to, conduct its
activities under this Agreement with respect to (a) Company, the Development, Manufacture or Commercialization
of any Licensed Product; or (b) Biosion, the performance of the Transition Services pursuant to Section 2.6, in each
case ((a) or (b)), in a good scientific manner and comply fully with Laws, including anti-corruption and sanctions
Laws. During the Term, Company shall obtain and maintain all necessary authorizations, consents and approvals of
any Regulatory Authority or other Governmental Body that is required for the Development, Manufacture or
Commercialization activities under this Agreement with respect to any such Licensed Product. Each Party and its
Affiliates have not, and will not (and will require its Sublicensees and any Third Party subcontractors performing on
its or their behalf to not), in connection with the performance of this Agreement, directly or indirectly, make,
promise, authorize, ratify or offer to make, or take any act in furtherance of any payment or transfer of anything of
value for the purpose of influencing, inducing or rewarding any act, omission or decision to secure an improper
advantage, or improperly assisting such Party or any of its Affiliates in obtaining or retaining business, or in any
way with the purpose or effect of public or commercial bribery. Each Party warrants that it and its Affiliates have
taken, and will take (and will require its Sublicensees to take), reasonable measures to prevent subcontractors, agents
or any other Third Parties, subject to their control or determining influence, from doing so in connection with this
Agreement. For the avoidance of doubt, this includes facilitating payments which are unofficial, improper, small
payments or gifts offered or made to Government Officials to secure or expedite a routine or necessary action to
which such Party (or any of its Affiliates or Sublicensees) is legally entitled. Each Party shall, and shall cause its
Affiliates and require its Sublicensees and Third Party subcontractors performing on its or their behalf not to,
employ or otherwise use in any capacity,

28
the services of any Person debarred under United States Law, including under 21 U.S.C. Section 335a or any foreign
equivalent thereof, with respect to any Development, Manufacture or Commercialization of any Licensed Product or
otherwise in connection with the performance of any of its obligations or exercise of its rights under this Agreement.
3.10
Regulatory Matters.
(a)
Company (or one of its Affiliates or Sublicensees) shall (i) be responsible for preparing and submit
Regulatory Documents for obtaining and maintaining all Regulatory Approvals (including all INDs and MAAs) for
any Licensed Products in the Field in the Company Territory and, thereafter, maintaining all such Regulatory
Approvals for any Licensed Products in the Field in the Company Territory, in each case, in accordance with Law,
(ii) be responsible, and act as the sole point of contact, for communications with Regulatory Authorities in
connection with the Development, Manufacture or Commercialization of any Licensed Products in the Field in the
Company Territory, and (iii) have the sole right to determine whether and how to implement a recall or other market
withdrawal of its Licensed Products in the Company Territory. In addition, as between Biosion and Company,
Company shall own any and all Regulatory Documents (including all INDs and MAAs) and Regulatory Approvals
for any Licensed Products in the Field in the Company Territory.
(b)
Following the Effective Date, Biosion shall not initiate (or unless required by Law participate in) (or permit
any of its Affiliates to initiate (or unless required by Law participate in)) any meetings or communications with
Regulatory Authorities with respect to any Licensed Product in the Field and in the Company Territory, without
Company’s prior consent.
(c)
If Biosion or any of its Affiliates receives any written or oral communication from any Regulatory Authority
in the Company Territory relating to any Licensed Product, to the extent not prohibited by Law, Biosion shall (i)
refer such Regulatory Authority to Company, and (ii) as soon as reasonably practicable, notify Company in writing
and provide Company with a copy of any written communication received by Biosion or such Affiliate or, if
applicable, complete and accurate minutes of such oral communication.
(d)
Following the Effective Date, the Parties will cooperate with each other with regard to the reporting and
handling of safety information involving the Licensed Products in accordance with Law, including applicable
regulatory requirements and regulations on pharmacovigilance, clinical safety and data privacy. Without limiting the
foregoing, following the Effective Date, (i) Biosion shall transfer a copy of the safety database maintained by
Biosion as of the Effective Date to Company (or its Affiliate) and thereafter Company will establish a global safety
database for each Licensed Product Developed hereunder and, as between the Parties, shall own and maintain such
global safety database for each such Licensed Product, and (ii) Company shall be responsible for reporting quality
complaints, Adverse Events and safety data related to each Licensed Product to the relevant Regulatory Authority in
the Company Territory and responding to any safety issues and all relevant requests of Regulatory Authorities
relating to any Licensed Product in the Company Territory, in each case, in accordance with Law; provided that,
upon Biosion’s request, the Parties (or their respective Affiliates or Sublicensees, as applicable) will negotiate in
good faith and enter into a pharmacovigilance agreement related to Licensed Products in the Company Territory and
the Excluded Territory, which will define the pharmacovigilance responsibilities of the Parties (or such Affiliate or
Sublicensee, as applicable) and include safety data exchange procedures governing the exchange of information
affecting the Licensed Products (including Adverse Events, serious Adverse Events and emerging safety issues) to
enable each Party (or its Affiliate or Third Party

29
sublicensee, as applicable) to comply with all Laws related to such Licensed Products in the Company Territory and
the Excluded Territory, as applicable.
3.11
Alliance Managers(a) . Within [***] days following the Effective Date, each Party shall appoint an individual who
shall serve as the primary point of contact between the Parties with regard to questions relating to this Agreement or
the overall business relationship and related matters between the Parties (each, an “Alliance Manager”). During the
Term, each Party may replace its Alliance Manager at any time upon written notice to the other Party.
ARTICLE 4
FINANCIALS
4.1
Upfront Consideration. On the Effective Date, Company shall pay to Biosion the following one-time, non-
refundable, non-creditable payments: (a) [***] as an upfront payment in partial consideration of Biosion’s grant of
the rights and licenses to Company hereunder; (b) [***] as reimbursement for the costs and expenses incurred by or
on behalf of Biosion (or its Affiliates) in connection with [***]; and (c) Four Million Five Hundred Thousand
Dollars ($4,500,000) as reimbursement for the costs and expenses incurred by or on behalf of Biosion (or its
Affiliates) in connection with the generation of data and results in support of [***], as set forth on Schedule 4.1(a).
In addition, Company shall pay to Biosion a one-time, non-refundable, non-creditable payment in the amount of
[***] as reimbursement for the costs and expenses incurred by or on behalf of Biosion (or its Affiliates) in
connection with [***], as set forth and to be paid in accordance with the timelines on Schedule 4.1(b).
4.2
Equity Consideration. In partial consideration of Biosion’s grant of the rights and licenses to Company hereunder,
Company has executed that certain Common Stock Purchase Warrant, dated as of the date hereof, in favor of
Biosion, which entitles Biosion to purchase Eleven Million Two Hundred Eighty-One Thousand Nine Hundred
Eighty-Five (11,281,985) shares of Company’s common stock, in the form attached hereto as Schedule 4.2 (the
“Warrant”).
4.3
Transition Services Fees. In consideration for the Transition Services provided by or on behalf of Biosion pursuant
to Section 2.6, Company shall (a) pay to Biosion the FTE Costs (except for the first [***] FTE hours incurred by the
Biosion, which shall be provided at Biosion’s cost) incurred in connection with the performance of any Transition
Services by any employee or other personnel of Biosion (or any of its Affiliates) pursuant to Section 2.6; and (b)
reimburse Biosion for any Out-of-Pocket Costs incurred with respect thereto, in each case ((a) or (b)), which
amounts shall be due and payable within [***] days following Company’s receipt of an invoice from Biosion with
respect thereto (which shall be provided on a [***] basis during the performance of the Transition Services pursuant
to Section 2.6); provided, however, that the Parties shall agree in advance upon a budget for any FTE Costs or Out-
of-Pocket Costs to be paid by Company pursuant to this Section 4.3, including the scope of the Transition Services
to be performed.
4.4
Biosion Materials; Existing Inventory. In consideration for the Biosion Materials and Existing Inventory
transferred to Company hereunder, Company will pay to Biosion [***], which amount shall be due and payable
within [***] days following the date both of the following conditions are met: (a) Biosion has delivered such
Biosion Materials pursuant to Section 2.7 and the Existing Inventory pursuant to Section 2.8 and (b) [***].
4.5
Regulatory Milestones. In partial consideration of Biosion’s grant of the rights and licenses to Company hereunder,
Company shall pay to Biosion the following one-time, non-refundable, non-creditable milestone payments (each, a
“Regulatory Milestone Payment”) upon the first

30
achievement by or on behalf of Company or any of its Affiliates or Sublicensees of the corresponding milestone
event (each, “Regulatory Milestone Event”) with respect to the first Licensed Product to achieve such Regulatory
Milestone Event, in each case, subject to and in accordance with this Section 4.5:
Regulatory Milestone Event
Regulatory Milestone
Payment
(USD $)
1. Earlier of First Marketing Approval or [***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
With respect to each Regulatory Milestone Event set forth above, a Regulatory Milestone Payment shall be paid
one-time only for the first Licensed Product to achieve such Regulatory Milestone Event, regardless of the number
of Licensed Products that achieve the corresponding Regulatory Milestone Event or the number of times a given
Licensed Product achieves such corresponding Regulatory Milestone Event; provided, however, that, solely with
respect to [***]. Within [***] days following the achievement of a given Regulatory Milestone Event by Company
or any of its Affiliates or Sublicensees, as applicable, Company shall deliver notice thereof to Biosion, together with
payment of the corresponding Regulatory Milestone Payment.
For the avoidance of doubt, for purposes of [***].
4.6
Sales Milestones. In partial consideration of Biosion’s grant of the rights and licenses to Company hereunder,
Company shall pay to Biosion the following one-time, non-refundable, non-creditable milestone payments (each, a
“Sales Milestone Payment”) upon the first achievement of the corresponding milestone event (each, a “Sales
Milestone Event”) based on the aggregate annual Net Sales of all Licensed Products (including all Indications
therefor) by or on behalf of any Selling Party in the Company Territory during a given Calendar Year, in each case,
subject to and in accordance with this Section 4.6:
Sales Milestone Event
Sales Milestone Payment
(USD $)
1. First achievement of aggregate annual Net Sales of all Licensed
Products throughout the Company Territory of [***]
[***]
2. First achievement of aggregate annual Net Sales of all Licensed
Products throughout the Company Territory of [***]
[***]
3. First achievement of aggregate annual Net Sales of all Licensed
Products throughout the Company Territory of [***]
[***]
4. First achievement of aggregate annual Net Sales of all Licensed
Products throughout the Company Territory of [***]
[***]
5. First achievement of aggregate annual Net Sales of all Licensed
Products throughout the Company Territory of [***]
[***]
6. First achievement of aggregate annual Net Sales of all Licensed
Products throughout the Company Territory of [***]
[***]

31
With respect to each Sales Milestone Event set forth above, a Sales Milestone Payment shall be paid upon the first
achievement of the corresponding Sales Milestone Event, regardless of the number of times a given Sales Milestone
Event is achieved. Company shall notify Biosion in connection with the Royalty Report delivered pursuant to
Section 4.7(c) for the applicable Calendar Quarter during which a given Sales Milestone Event is first achieved by a
Selling Party, and Company shall make payment of the corresponding Sales Milestone Payment together with such
Royalty Report.
4.7
Royalties.
(a)
In partial consideration of Biosion’s grant of the rights and licenses to Company hereunder, on a Licensed
Product-by-Licensed Product and country-by-country basis, during the applicable Royalty Term for each Licensed
Product in the Company Territory, Company will pay Biosion royalties based on the aggregate annual Net Sales of
such Licensed Product sold by or on behalf of any Selling Party in the Company Territory during a Calendar Year at
the rates set forth in the table below, in each case, subject to and in accordance with this Section 4.7:
Aggregate Net Sales of a given Licensed Product in a given Calendar
Year
Royalty Rate
Portion of aggregate Net Sales of such Licensed Product in the Company
Territory less than or equal to [***] in a given Calendar Year
[***]
Portion of aggregate Net Sales of such Licensed Product in the Company
Territory greater than [***] but less than or equal to [***] in a given
Calendar Year
[***]
Portion of aggregate Net Sales of such Licensed Product in the Company
Territory greater than [***] but less than or equal to [***] in a given
Calendar Year
[***]
Portion of aggregate Net Sales of such Licensed Product in the Company
Territory greater than [***] in a given Calendar Year
[***]
(b)
For clarity, following the expiration of the applicable Royalty Term for a given Licensed Product in a given
country, no royalties shall be due and payable with respect to such Licensed Product in such country.
(c)
Within [***] days following the end of each Calendar Quarter during which royalties become payable
pursuant to this Section 4.7, Company shall deliver to Biosion with respect to all Licensed Products for such
Calendar Quarter, a report (each, a “Royalty Report”) summarizing, on a Licensed Product-by-Licensed Product
basis (where applicable), the total amount of applicable royalty payments, if any, due and payable to Biosion with
respect to each such Licensed Product for such Calendar Quarter, including on a Licensed Product-by-Licensed
Product and country-by-country basis, details regarding the calculation of any royalties due and payable to Biosion
pursuant to this Section 4.7 with respect to each such Licensed Product, including [***]. Each Royalty Report shall
be deemed Confidential Information of Company subject to the obligations of Article 6 of this Agreement. Company
shall make payment of the royalties included in the Royalty Report together with the delivery of such Royalty
Report.

32
(d)
Subject to Section 4.7(g), on a Licensed Product-by-Licensed Product and country-by-country basis, if at
any point during the applicable Royalty Term for a given Licensed Product in a given country in the Company
Territory, such Licensed Product is not Covered by a Valid Claim of any Biosion Patent exclusively licensed to
Company under Section 2.1 in such country, then, the applicable royalty rates set forth in Section 4.7(a) shall be
reduced by [***] for such Licensed Product in such country for so long as such Licensed Product is not Covered by
a Valid Claim of a Biosion Patent in such country.
(e)
Subject to Section 4.7(g), if a Selling Party enters into a Third Party Agreement in accordance with Section
5.5, Company will be entitled to deduct from royalties payable hereunder in any Calendar Quarter [***] of all
amounts actually paid by such Selling Party to the applicable Third Party pursuant to such Third Party Agreement,
in each case, solely to the extent that such payment amounts are [***] (such payment amounts, “Third Party
Payments”); provided that, [***]. Any deductible Third Party Payments which accrue in a Calendar Quarter and
which are not deducted in such Calendar Quarter as a result of Section 4.7(g) may be carried forward and deducted
from any royalties due in subsequent Calendar Quarters pursuant to this Section 4.7 (but, for clarity, subject to
Section 4.7(g)).
(f)
Subject to Section 4.7(g), on a Licensed Product-by-Licensed Product and country-by-country basis, in the
event that, during the applicable Royalty Term for a given Licensed Product in a given country in the Company
Territory, (i) one or more Biosimilar Products are marketed and sold with respect to such Licensed Product by any
Third Party in such country and (ii) such Biosimilar Product(s) have an aggregate market share of greater than [***]
in such country for a period of [***] during such Royalty Term, then, the applicable royalty rates set forth in Section
4.7(a) shall be reduced by [***] for such Licensed Product in such country for so long as such Biosimilar Product(s)
continue to maintain an aggregate market share of greater than [***] in such country; provided that, for clarity, if at
any point during the remainder of the applicable Royalty Term for such Licensed Product in such country,
Biosimilar Product(s) cease to have an aggregate market share of greater than [***] in such country, then, the
reduction set forth in this Section 4.7(f) shall cease to apply with respect to such Licensed Product in such country
for such period; provided further that the reduction under this clause (f) shall apply again in the event that the
conditions of this clause (f) are met again in such country. For purposes of this Section 4.7(f), market share shall be
determined based on the aggregate market in such country of such Licensed Product and all Biosimilar Product(s)
sold during a given Calendar Quarter, based on the number of units of such Licensed Product and such Biosimilar
Product(s) in the aggregate sold in such country during such Calendar Quarter, as reported by a well-known
reporting service agreed between the Parties acting reasonably (e.g., IQVIA).
(g)
Notwithstanding the foregoing, under no circumstances shall the reductions or deductions under Section
4.7(d), Section 4.7(e) and Section 4.7(f) (in the aggregate) result in the royalties due and payable to Biosion with
respect to a given Licensed Product in a given country in the Company Territory for any given Calendar Quarter
during the applicable Royalty Term for such Licensed Product being reduced to less than [***] of the amount that
otherwise would have been due and payable to Biosion for such Calendar Quarter with respect to Net Sales of such
Licensed Product in such country in accordance with Section 4.7(a).
4.8
Sublicense Income. In partial consideration of Biosion’s grant of the rights and licenses to Company hereunder,
Company will pay Biosion a portion of any Sublicense Income received by Company (or any of its Affiliates)
pursuant to any Sublicense Agreement between the Company (or any of its Affiliates) and a Sublicensee, but not
(for the avoidance of doubt) between a

33
Sublicensee (or any of its Affiliates) and its further Sublicensees, in each case, subject to and in accordance with this
Section 4.8.
(a)
With respect to any Sublicense Income in connection with the Development or Commercialization of any
BSI-045B Product, Company will pay to Biosion an amount equal to the percentage of such Sublicense Income
based on the date on which such Sublicense Agreement was first entered into, as set forth below:
Execution Date of Sublicense Agreement
(BSI-045B Products)
Percentage of Sublicense
Income
[***]
[***]
[***]
[***]
For clarity, no Sublicense Income with be due and payable in connection with the Development or
Commercialization of any BSI-045B Product under any Sublicense Agreement that is first entered into following
[***].
(b)
With respect to any Sublicense Income in connection with the Development or Commercialization of any
BSI-502 Product under a Sublicense Agreement that was first entered into at any time [***], Company will pay
Biosion an amount equal to [***] of such Sublicense Income; provided that, for clarity, no Sublicense Income with
be due and payable in connection with the Development or Commercialization of any BSI-502 Product under any
Sublicense Agreement that is first entered into following [***].
(c)
Within [***] days following the end of each Calendar Quarter during which by Company (or any of its
Affiliates) has received Sublicense Income, Company shall deliver to Biosion, together with the applicable payment
amount with respect to such Sublicense Income for such Calendar Quarter, a notice detailing the Sublicense Income
received and the calculation of the applicable portion of such Sublicense Income due and payable to Biosion
pursuant to this Section 4.8, which notice and payment may be provided in connection with a Royalty Report
delivered pursuant to Section 4.7(c).
4.9
Development, Manufacture and Commercialization Costs. As between the Parties, from and after the Effective
Date, Company shall be solely responsible for all costs and expenses incurred in connection with its (or its
Affiliates’ or Sublicensees’) Development, Manufacture and Commercialization of any Licensed Product.
4.10
Mode of Payment and Currency. All payments to Biosion hereunder shall be made by deposit of Dollars in the
requisite amount to such bank account as set forth on Schedule 4.10 (or such other bank account as Biosion may
from time to time designate by written notice to Company). With respect to amounts payable hereunder not
denominated in Dollars, Company shall convert applicable amounts in foreign currency into Dollars by using
Company’s then-current standard procedures and methodology used to prepare its audited financial statements for
external reporting purposes, including Company’s then-current standard exchange rate methodology for the
translation of foreign currency sales into U.S. Dollars or, in the case of Sublicensees, such similar methodology,
consistently applied provided that such practices use a widely accepted source of published exchange rates. Based
on the resulting sales in Dollars, the then-applicable royalties shall be calculated. The Parties may vary the method
of payment set forth herein at any time upon mutual agreement, and any change shall be consistent with the local
Law at the place of payment or remittance. Company shall provide Biosion with its address and any other requisite
information with respect to any invoices that Biosion may deliver in connection with any payments to be made

34
to Biosion hereunder. Unless as otherwise expressly provided hereunder, all amounts due and payable to Biosion
under in this Agreement shall be paid within [***] days following Company’s receipt of an invoice for such amount.
4.11
Blocked Payments. If, by reason of Laws in any country, it becomes impossible or illegal for a Company or any of
its Affiliates or other Selling Party to transfer, or have transferred on its behalf, payments to Biosion (or its Affiliate,
as applicable), (a) Company shall promptly notify Biosion of the conditions preventing such transfer; and (b) such
payments shall be deposited in local currency in the relevant country to the credit of Biosion (or its Affiliate) in a
recognized banking institution designated by Biosion and identified in a notice given to Company. Any cost to
convert to local currency shall be [***].
4.12
Late Payments. All payments due under this Agreement which are not disputed by Company, acting reasonably and
in good faith, shall earn interest from the date due until paid at a rate equal to the lesser of (a) the sum of [***] plus
the prime rate of interest quoted in the Money Rates (or equivalent) section of The Wall Street Journal, Eastern
Edition (or any substitute source agreed by the Parties), calculated daily on the basis of a three hundred sixty (360)
day year; and (b) the maximum interest rate allowed by Law.
4.13
Records; Audits.
(a)
Company shall, and shall cause its Affiliates and require its Sublicensees to, keep complete and accurate
records in accordance with its record retention policies applicable to such books and records, but in any event for a
period of at least [***] years after the end of the Calendar Year in which any royalties becomes payable (or such
longer period as required under the applicable Accounting Standard or Law), in sufficient detail to confirm the
accuracy of the calculations hereunder and in accordance with the applicable Accounting Standard that is normally
applied by such Party with respect to the filing of its reporting.
(b)
During the Term and for [***] years thereafter, and not more than [***] in each Calendar Year, Company
shall permit, and shall cause its Affiliates and require its Sublicensees to permit, an independent certified public
accounting firm of nationally recognized standing selected by Biosion, and reasonably acceptable to Company or
such Affiliate or Sublicensee, to have access to and to review, during normal business hours upon not less than [***]
days’ prior notice, the applicable records of Company and its Affiliates and Sublicensees to verify the accuracy of
the Royalty Reports, statements of Sales Milestone Events or Sublicense Income or any other payments under this
Article 4. Such review may cover the records for sales made in any Calendar Year ending not more than [***] years
prior to the date of such notice (provided that any such Calendar Year may only be subject to audit [***], unless for
cause). The accounting firm shall disclose to Biosion and Company only whether the Royalty Reports or statements
of Sales Milestone Events or Sublicense Income are correct or incorrect and the amount of any discrepancies. No
other information shall be provided to Biosion.
(c)
If such accounting firm concludes that additional amounts were owed during such period, and Company
agrees with such calculation, Company shall pay the additional undisputed amount within [***] days after the date
Biosion delivers to Company such accounting firm’s written report. If such accounting firm concludes that an
overpayment was made, such overpayment shall be fully creditable against amounts payable in subsequent payment
periods (or reimbursed to the extent there are no subsequent payment periods). If Company disagrees with such
calculation, Biosion and Company shall work together reasonably and in good faith to resolve the disagreement. If
the Parties are unable to reach a mutually acceptable resolution of any such Dispute within [***] days,

35
then, notwithstanding Article 10, the Dispute shall be submitted for resolution to a certified public accounting firm
jointly selected by the Parties to conduct a review, and if such firm concurs that any additional amounts were owed
by Company during such period, Company shall make the required payment within [***] days after the date
Company receives the report of its accounting firm. Biosion shall pay for the cost of any such audit, unless
Company has underpaid Biosion by the greater of: (i) [***] and (ii) [***] or more for the applicable audited period.
(d)
Each Party shall treat all information that it receives under this Section 4.13 in accordance with the
confidentiality provisions of Article 6 of this Agreement, and shall cause its accounting firm to enter into an
acceptable, reasonable confidentiality agreement with the other Party obligating such firm to retain all such financial
information in confidence pursuant to such confidentiality agreement, except to the extent necessary for such Party
to enforce its rights under this Agreement.
4.14
Taxes.
(a)
Subject to Section 4.14(c), if Law requires that Taxes be deducted and withheld from payments paid under
this Agreement, the paying Party shall (i) pay such Taxes to the proper Governmental Body; (ii) deduct the amount
paid from the amount due to the other Party for such payment or any future payment and send evidence of the
obligation together with proof of Tax payment to the other Party within [***] days following such payment and (iii)
remit such payments to the other Party after deducting any such Taxes.
(b)
All amounts payable under or in connection with this Agreement are exclusive of VAT and Indirect Taxes.
Each Party will provide the other Party with notice if it becomes aware of or reasonably anticipates that any VAT
and Indirect Taxes will be payable on any payments to be made to it under this Agreement. Any VAT and Indirect
Taxes payable on the consideration paid hereunder (including, if the paying Party is Company, any Regulatory
Milestone Payment, Sales Milestone Payment or royalties) shall be paid by the paying Party at the same time as the
payment or provision of such consideration to which it relates subject to the production of a VAT valid invoice. Each
Party agrees that it shall provide to the other Party any information and copies of any documents within its control to
the extent reasonably requested by the other Party for the purposes of (i) determining the amount of VAT and
Indirect Taxes chargeable under this Agreement, (ii) establishing the “place of supply for VAT” purposes, or (iii)
complying with its VAT and Indirect Taxes reporting or accounting obligations.
(c)
The Parties intend that the license from Biosion to Company under Section 2.1 be treated for U.S. federal
income Tax purposes as [***] of the Biosion Licensed Technology and that the upfront consideration, equity
consideration, and consideration for the Biosion Materials and Existing Inventory from Company to Biosion under
Sections 4.1, 4.2 and 4.4, respectively, be treated for U.S. federal income Tax purposes as [***]. The Parties shall
file all applicable tax returns (including information returns) in a manner consistent with such intended [***]
treatment and shall, subject to applicable Law, reasonably cooperate in contesting any contrary assertion by a tax
authority, including any assertion that the upfront consideration, equity consideration and consideration for the
Biosion Materials and Existing Inventory from Company to Biosion under Sections 4.1, 4.2 and 4.4, respectively,
are [***].
4.15
CTTQ Payments. In partial consideration of Biosion’s grant of the rights and licenses to Company hereunder, in
addition to any amounts payable to Biosion, the Parties acknowledge that Company has agreed to provide additional
consideration directly to CTTQ pursuant to and in accordance with the applicable terms and conditions of the
Tripartite CTTQ Agreement.

36
ARTICLE 5
INTELLECTUAL PROPERTY
5.1
Inventions. For purposes of this Section 5.1, all determinations of inventorship will be in accordance with U.S.
patent Law and ownership of all rights, title and interests in and to (a) any Know-How that is discovered, developed,
generated, invented, derived, created, conceived or reduced to practice by a Party (or any of its Affiliates or Third
Parties acting on its or their behalf) in connection with activities under this Agreement; and (b) any Patents that
claim any such Know-How described in the foregoing clause (a), in each case ((a) and (b)), shall follow
inventorship. Each Party represents and warrants that any employees, consultants or contractors conducting any
activities under this Agreement are and shall be obligated by written agreements to assign to the applicable Party
their rights in the applicable invention or discovery. For clarity, as between the Parties, Biosion will own and retain
all of its rights, title and interest in and to any Biosion Licensed Technology, subject to any rights or licenses
expressly granted to Company under this Agreement.
5.2
Prosecution and Maintenance of Biosion Patents.
(a)
Subject to the remainder of this Section 5.2, Company shall have the first right, but not the obligation, at its
own cost and expense, to control the preparation, filing, prosecution (including any interferences, oppositions, inter
partes review or other post-grant proceedings, reissue reexaminations, revocations or nullifications) and
maintenance of the Biosion Patents in the Company Territory. Company shall keep Biosion reasonably informed of
the status of the preparation, filing, prosecution and maintenance of such Biosion Patents (e.g., interferences,
oppositions, inter partes review or other post-grant proceedings reexaminations, reissues, revocations or
nullifications) in a timely manner, including by providing Biosion (i) copies of any material communications or
correspondence received from relevant patent authorities, (ii) a reasonable opportunity to review and comment on
any proposed filing or material correspondence with any patent authority to the extent related to any such Biosion
Patent at least [***] days prior to the anticipated filing or submission date thereof, and Company shall consider any
of Biosion’s reasonable comments with respect thereto in good faith, and (iii) copies of all final filings and responses
made to any patent authority with respect to any Biosion Patent in a timely manner following submission thereof.
(b)
Subject to Section 5.2(c), if Company elects not to file or to continue to prosecute or maintain any such
Biosion Patent in any country of the applicable Company Territory pursuant to Section 5.2(a), then, Company shall
notify Biosion promptly after making such election (but, in any event, at least [***] days before any deadline
applicable to the filing, prosecution or maintenance of such Biosion Patent, as the case may be, or any other date by
which an action must be taken to establish or preserve such Biosion Patent in such country). In such case, Biosion
shall have the right, but not the obligation, to pursue the filing, prosecution or maintenance of such Biosion Patent in
such country, at its own cost and expense. If Biosion elects to continue prosecution or maintenance of any such
Biosion Patent pursuant to this Section 5.2(b), then, Company shall promptly deliver to Biosion all prosecution files
associated with such Patent in such country and use reasonable efforts to make its employees, agents and consultants
reasonably available to Biosion, at no additional cost, to the extent necessary to enable Biosion to continue
prosecution or maintenance of any such Biosion Patent in such country.
(c)
With respect to any Biosion Patent, Company shall have sole and final decision making authority with
respect to (i) filing for any patent term extension pursuant to 35 U.S.C. §154-156 or, as applicable, any foreign
equivalent patent term extension or supplemental protection certificates

37
on any such Biosion Patent in the Company Territory; provided that Company shall keep Biosion reasonably
informed of the status of any such patent term extension or supplemental protection certificate (including any
decision with respect thereto) with respect to any such Biosion Patents in a timely manner, including giving Biosion
a reasonable opportunity to comment on any such filing and decisions regarding such patent term extension or
supplemental protection certificate and considering in good faith any reasonable comments provided by Biosion
with respect thereto, or (ii) the determination, as a reference product sponsor, of whether or not to privately
exchange any such Biosion Patent with respect to such Licensed Product with a biosimilar applicant, and take other
steps, pursuant to the requirements of the BPCIA.
(d)
Except as otherwise agreed by the Parties, the Party controlling the preparation, filing, prosecution and
maintenance of a given Biosion Patent pursuant to this Section 5.2 shall be responsible for all costs and expenses
(including any attorney fees) incurred in connection therewith.
5.3
Enforcement of Biosion Licensed Technology.
(a)
If either Party or any of its Affiliates or Sublicensees (i) believes that an infringement, unauthorized use, or
misappropriation of any Biosion Licensed Technology is occurring or is likely, in each case, solely to the extent such
infringement, unauthorized use or misappropriation would infringe upon or diminish either Party’s rights with
respect to any Licensed Product or (ii) becomes aware of any Third Party claiming ownership of any Biosion
Licensed Technology or claiming that any such Biosion Licensed Technology is invalid or unenforceable as a
defense or counterclaim to a claim of infringement, unauthorized use or misappropriation, as applicable (any such
activity or claims by a Third Party, a “Third Party Infringement”), such Party shall notify the other Party and
provide it with details of such infringement, unauthorized use or misappropriation or claim that are known by such
Party and its Affiliates.
(b)
Company shall have the first right, at its own cost and expense, but not the obligation, to attempt to resolve
any Third Party Infringement in the Company Territory with respect to any Biosion Licensed Technology, including
by filing an infringement suit, defending against such claim or taking other similar action (each, an “Enforcement
Action”) and, subject to Section 5.3(f), to compromise or settle any such infringement or claim.
(c)
Subject to Section 5.2(c), if Company does not intend to prosecute, defend or otherwise attempt to settle an
Enforcement Action with respect to any such Biosion Licensed Technology pursuant to Section 5.3(b), Company
shall, within [***] days of having received or sent notice pursuant to Section 5.3(a), inform Biosion thereof and
Biosion shall have the right, but not the obligation, to attempt to resolve such Third Party Infringement solely with
respect to such Biosion Licensed Technology as the Party controlling such Enforcement Action, but subject to the
prior written consent of Company (such consent not to be unreasonably withheld, conditioned or delayed).
(d)
The Party bringing an Enforcement Action shall have the sole and exclusive right to select counsel for such
Enforcement Action. Each Party shall have the right to join an Enforcement Action (including the right to be
represented by independent counsel of its own choice) initiated pursuant to Section 5.3(b) or Section 5.3(c), as
applicable, in each case, at its own expense (except any required joinder pursuant to Section 5.3(e)).
(e)
The Party controlling the Enforcement Action under this Section 5.3 (i) shall keep the other Party promptly
informed with respect to such Enforcement Action, (ii) shall, acting reasonably and in good faith, consult with, and
give reasonable consideration to, any comments made by the other

38
Party related to such Enforcement Action, and (iii) shall provide the other Party with copies of all material
documents (e.g., complaints, answers, counterclaims, material motions, orders of the court, memoranda of law and
legal briefs, interrogatory responses, depositions, material pre-trial filings, expert reports, affidavits filed in court,
transcripts of hearings and trial testimony, trial exhibits and notices of appeal) filed in, or otherwise relating to, such
Enforcement Action. Upon the request of the controlling Party, the other Party shall provide reasonable assistance to
the controlling Party, including providing access to relevant documents and other evidence, making its employees
available, and, solely to the extent that such other Party is a necessary or indispensable plaintiff party for such
Enforcement Action (or such joinder is required under Law in order to enable such enforcing Party to pursue such
Enforcement Action), joining such Enforcement Action or taking such other actions as are necessary for standing
with respect to such Enforcement Action (including the right to be represented by independent counsel of its own
choice), in each case, subject to the controlling Party’s reimbursement of any reasonable out-of-pocket expenses
(including reasonable attorney fees) incurred on an on-going basis by the non-controlling Party in providing such
assistance. The Parties shall, acting reasonably and in good faith, cooperate to ensure that each Person that
participates in, or receives any information about, any Enforcement Action in accordance with this Section 5.3(e)
shall use reasonable efforts to protect all applicable Confidential Information and preserve all applicable attorney-
client privilege and work product protections.
(f)
Notwithstanding anything to the contrary set forth herein, (i) Company shall not settle or otherwise
compromise any Enforcement Action by admitting that any Biosion Patent is invalid or unenforceable, whether in
whole or in part, or in a way that adversely affects or would be reasonably expected to materially adversely affect
the validity or enforceability of any such Biosion Patent, in each case, without Biosion’s prior consent (such consent
not to be unreasonably withheld, conditioned or delayed), (ii) Biosion shall not settle or otherwise compromise any
Enforcement Action by admitting that any Biosion Patent is invalid or unenforceable, whether in whole or in part, or
in a way that adversely affects or would be reasonably expected to materially adversely affect the validity or
enforceability of any such Biosion Patent, in each case, without Company’s prior consent (such consent not to be
unreasonably withheld, conditioned or delayed), and (iii) neither Party shall settle or otherwise compromise any
Enforcement Action in a way that adversely affects or would be reasonably expected to materially adversely affect
the rights or benefits of the other Party hereunder or that otherwise imposes any costs or liability on, or involves any
admission by, the other Party, in each case, without the other Party’s prior consent (such consent not to be
unreasonably withheld, conditioned or delayed).
(g)
Subject to the respective indemnity obligations of the Parties set forth in Article 8, the Party taking an
Enforcement Action under this Section 5.3 shall pay all costs associated with such Enforcement Action, other than
the expenses of the other Party if the other Party elects to join such Enforcement Action as provided in Section
5.3(d) (but, for clarity, not any required joinder pursuant to Section 5.3(e)). Any amounts recovered by the Party
taking an Enforcement Action pursuant to this Section 5.3, whether by settlement or judgment, shall be allocated in
the following order: [***]; provided any such remaining amount that is attributable to loss of sales or profits with
respect to any Licensed Product (whether by judgment or otherwise) shall be treated as “Net Sales” in the Calendar
Quarter in which the money is actually received, including for purposes of determining any royalties, Sale Milestone
Payments or Sublicense Income payable by Company to Biosion with respect thereto pursuant to Article 4, as
applicable.

39
5.4
Defense of Third Party Actions.
(a)
If either Party or any of its Affiliates becomes aware of any Third Party Action with respect to a Licensed
Product in the Company Territory, such Party shall promptly notify the other Party of all details regarding such
claim or action that is reasonably available to such Party or such Affiliate.
(b)
Company shall have the first right, at its sole cost and expense, but not the obligation, to defend against any
Third Party Action with respect to a Licensed Product in the Field in the Company Territory and, subject to Section
5.4(f), to settle or otherwise compromise such Third Party Action. If Company declines or fails to assert its intention
to defend such Third Party Action with respect to Biosion Licensed Technology within [***] days after sending (in
the event that Company is the notifying Party) or receiving (in the event that Biosion is the notifying Party) notice
under Section 5.4(a), then, Biosion shall have the right, but not the obligation, to assume control of the defense
against such Third Party Action solely with respect to Biosion Licensed Technology. The Party defending such
Third Party Action shall have the sole and exclusive right to select counsel for such Third Party Action.
(c)
The Party defending a Third Party Action (the “Defending Party”) pursuant to Section 5.4(b) shall consult
with the non-Defending Party on all material aspects of the defense. The non-Defending Party, at its own cost and
expense, shall have a reasonable opportunity for meaningful participation in decision-making and formulation of
defense strategy and the Defending Party shall, acting reasonably and in good faith, consider the non-Defending
Party’s comments. The Parties shall reasonably cooperate with each other in all such Third Party Actions.
(d)
The non-Defending Party will be entitled to be represented by independent counsel of its own choice at its
own expense.
(e)
Subject to the respective indemnity obligations of the Parties set forth in Article 8, the Defending Party shall
pay all costs incurred by the Parties associated with such Third Party Action other than the expenses of the non-
Defending Party if the non-Defending Party elects to join such Third Party Action pursuant to Section 5.4(d).
(f)
Consent for Certain Settlements and other Compromises of Third Party Actions.
(i)
Biosion shall not settle or otherwise compromise any Third Party Action (A) by admitting that any
Biosion Patent is invalid or unenforceable, whether in whole or in part, (B) in a manner that adversely affects or
would be reasonably expected to materially adversely affect any rights or benefits of Company or its Affiliates, or
(C) in a way that imposes any costs or liability on, or involves any admission by, Company or its Affiliates, in each
case ((A), (B) or (C)), without Company’s prior consent (such consent not to be unreasonably withheld, conditioned
or delayed).
(ii)
Company shall not settle or otherwise compromise any Third Party Action (A) by admitting that any
Biosion Patent is invalid or unenforceable, whether in whole or in part, (B) in a manner that adversely affects or
would be reasonably expected to materially adversely affect any rights or benefits of Biosion or its Affiliates, or (C)
in a way that imposes any costs or liability on, or involves any admission by, Biosion or its Affiliates, in each case
((A), (B) or (C)), without Biosion’s prior consent (such consent not to be unreasonably withheld, conditioned or
delayed).
5.5
Third Party Agreements. Subject to Section 5.4(f), Company (or any of its Affiliates or Sublicensees) shall have
the right to enter into any agreement with a Third Party pursuant to which

40
Company (or any of its Affiliates or Sublicensees) obtains a license, sublicense, covenant not to sue or other rights
under any Patents, Know-How or other intellectual property rights owned or otherwise Controlled by such Third
Party (or any of its Affiliates) that are necessary or reasonably useful for the Development, Manufacture or
Commercialization of any Licensed Product in the Company Territory. Notwithstanding the foregoing, solely with
respect to any such agreement or other arrangement entered into between Company (or any of its Affiliates or
Sublicensees) and a Third Party during the Term pursuant to which Company (or any of its Affiliates or
Sublicensees) (a) [***] (each such Patent, “Necessary Third Party IP”); and (b) may incur any upfront payment,
royalties, milestones or other payment obligations to any Third Party with respect to such Licensed Product in the
Company Territory (each such agreement or other arrangement, a “Third Party Agreement”), promptly following
the execution of any such Third Party Agreement, Company shall provide notice to Biosion, together with a copy of
such Third Party Agreement (provided that Company shall have the right to reasonably redact any unrelated
technical or business information from such copy, so long as such redaction does not adversely affect the ability of
Biosion to understand the financial terms relevant to any such potential Third Party Payments that may become due
and payable thereunder and the relevant Necessary Third Party IP owned or otherwise controlled by such Third
Party for which Company (or its Affiliate or Sublicensee) obtains a license, sublicense, covenant not to sue or other
rights thereunder).
5.6
CTTQ Patents. Notwithstanding anything to the contrary set forth herein, the rights of the Parties with respect to
any CTTQ Patents shall be governed under the terms and conditions of the CTTQ Agreements.
ARTICLE 6
CONFIDENTIALITY
6.1
Confidentiality Obligations. During the Term and for [***] years thereafter, each Party (the “Receiving Party”)
shall, and shall ensure that its Affiliates (and, with respect to the Company, its Sublicensees) and its and their
respective employees, consultants, contractors, advisors and agents (“Representatives”), keep confidential and not
publish or otherwise disclose to a Third Party, and not to use, directly or indirectly, for any purpose, any
Confidential Information of the other Party (the “Disclosing Party”) furnished or otherwise made known to it,
directly or indirectly, by the other Party pursuant to this Agreement, except to the extent that such disclosure or use
is expressly permitted by the terms of this Agreement or is necessary or reasonably useful for the performance of
such Party’s obligations, or the exercise of such Party’s rights under, this Agreement, in which case the Receiving
Party may disclose Confidential Information of the Disclosing Party to its Representatives who have a need to know
such Confidential Information in order to exercise the Receiving Party’s rights or perform the Receiving Party’s
obligations under this Agreement, all of whom will be similarly bound by written confidentiality, non-disclosure,
and non-use provisions substantially similar as those set forth in this Agreement. The confidentiality and non-use
obligations with respect to the Disclosing Party’s Confidential Information under this Agreement, including this
Section 6.1, will not include any information (and such information will not be considered Confidential Information)
that the Receiving Party can show by competent written evidence:
(a)
is or becomes generally available to the public or otherwise enters the public domain through no breach of
this Agreement on the part of the Receiving Party or its Representatives;
(b)
is already known by or in the possession of the Receiving Party at the time of disclosure by the Disclosing
Party, without any obligation of confidentiality with respect to such information;

41
(c)
is independently developed by the Receiving Party outside of this Agreement without use of or reference to
the Disclosing Party’s Confidential Information; or
(d)
is subsequently lawfully received by the Receiving Party from a Third Party who is rightfully in possession
of such information and not bound by any obligation of confidentiality to the Disclosing Party with respect to such
information.
The Receiving Party shall be responsible for any disclosure or use of the Confidential Information in breach of its
obligations hereunder by such Representatives. The Receiving Party shall protect Confidential Information using not
less than the same care with which it treats its own confidential information, but at all times shall use at least
reasonable care. Each Party shall: (i) implement and maintain appropriate security measures to prevent unauthorized
access, disclosure or use of the other Party’s Confidential Information; (ii) promptly notify the other Party of any
unauthorized access or disclosure of such other Party’s Confidential Information of which it becomes aware; and
(iii) cooperate with such other Party in the investigation and remediation of any such unauthorized access or
disclosure.
6.2
Authorized Disclosures. Notwithstanding Section 6.1, the Receiving Party may, in connection with performing its
obligations or exercising its rights under this Agreement, disclose the Confidential Information of the Disclosing
Party, including this Agreement, to the extent that such disclosure is:
(a)
made in response to a valid order of a court or other Governmental Body or, if in the reasonable opinion of
the Receiving Party’s legal counsel (including internal counsel), such disclosure is otherwise required by Law (other
than as set forth in Section 6.2(b)); provided that (i) the Receiving Party shall, to the extent practicable and
consistent with Law, first have given notice thereof to the Disclosing Party as far in advance as reasonably
practicable and given the Disclosing Party a reasonable opportunity to quash such order or to obtain a protective
order or confidential treatment and (ii) the Confidential Information disclosed in response to such order of a
Governmental Body or Law shall be limited to that information which is legally required to be disclosed in response
to such order or pursuant to such Law, as applicable;
(b)
made by reason of filing with securities regulators (including the U.S. Securities and Exchange
Commission) or any securities exchange on which securities issued by the Receiving Party or any of the Receiving
Party’s Affiliate are traded to the extent such disclosure is required by Law (in the reasonable opinion of the
Receiving Party’s legal counsel (including internal counsel)); provided that such Receiving Party shall (i) submit the
proposed disclosure to the Disclosing Party in advance of such disclosure so as to provide a reasonable opportunity
to comment thereon and (ii) consider the Disclosing Party’s comments in good faith;
(c)
(i) reasonably required in connection with the prosecution and maintenance of a Biosion Patent in
accordance with this Agreement or (ii) made by or on behalf of the Receiving Party to Regulatory Authorities as
required in connection with any filing, application or request for Regulatory Approval for a Licensed Product in
accordance with this Agreement; provided that reasonable measures shall be taken to assure confidential treatment
of such information to the extent practicable and consistent with Law; or
(d)
made by the Receiving Party to its attorneys, auditors, advisors, consultants, contractors, or existing or
prospective collaboration partners, licensees, sublicensees, investors, acquirers, lenders or financing sources, in each
case, as may be necessary in connection with the performance of obligations, or exercise of rights, under this
Agreement or as required under the terms of

42
agreements with Third Parties, in each case, for the limited purpose of such collaboration, license, sublicense,
financing or acquisition activities; provided that any such Persons shall be subject to obligations of confidentiality
and non-use with respect to such Confidential Information no less restrictive than the obligations of confidentiality
and non-use of the Receiving Party set forth in this Article 6 (provided, however, that, with respect to disclosures of
the executed version of this Agreement (or any portion thereof) to any such existing or prospective collaboration
partners, licensees, sublicensees, investors, acquirers, lenders or financing sources, the period of such obligations of
confidentiality and non-use may be commercially reasonable (but, in any event, no less than [***] years)).
6.3
Clinical Trial Data. Notwithstanding the provisions of Section 6.1 and Section 6.4, to the extent that there are any
Clinical Trials or studies (including observational studies and other studies, such as meta analyses) conducted by or
on behalf of Biosion (or any of its Affiliates) with respect to any Licensed Product prior to the Effective Date, as
applicable, Biosion (or any of its Affiliates) shall have the right (in their sole discretion, at any time) to publish (a)
the results or summaries of results of any such Clinical Trial or study in any register maintained by Biosion or any of
its Affiliates; or (b) the protocols of any such Clinical Trial on www.clinicaltrials.gov, within such timescales as
required by Law or Biosion’s or any of its Affiliates’ standard operating procedures, irrespective of the outcome of
any such Clinical Trial or study; provided that Biosion (or any of its Affiliates, as applicable) shall (i) submit to
Company a copy of any such publication for Company’s review and comment (but not approval) at least [***] days
prior to submission for the proposed date of publication (which period may be extended by up to an additional [***]
days in the event that Company believes in good faith that such publication may form the basis of patentable
intellectual property) and (ii) consider any Company’s comments thereto in good faith.
6.4
Public Disclosures. Subject to Section 6.2, neither Party (nor any of its respective Affiliates or, in the case of
Company, any Sublicensees) shall have the right to make press releases or public announcements regarding this
Agreement or the terms of this Agreement without the prior consent of the other Party; provided that (a) Biosion and
Company may each (separately) issue a press release regarding this transaction following the Effective Date in the
form, manner and on a date mutually agreed upon by the Parties; (b) subject to Section 6.5, Company (or any of its
Affiliates or Sublicensees) shall have the right to make press releases or public announcements with respect to any
Licensed Product, including its Development, Manufacture or Commercialization thereof in the Company Territory;
and (c) neither Party will be prevented from complying with any duty of disclosure it may have pursuant to Laws.
Each Party (or any of its respective Affiliates or, in the case of Company, any Sublicensees) may publish or publicly
announce any information relating to this Agreement that is substantially similar to information that has already
been publicly disclosed in accordance with this Article 6, including with respect to information disclosed by a Party
pursuant to Section 6.2(b); provided that as of such time, such information continues to be accurate.
6.5
Publications. Subject to the terms and conditions of this Agreement, without limiting its rights under this
Agreement (including under Article 5 and Section 6.2), Company (or any of its Affiliates or Sublicensees) shall have
the right to make publications regarding the Development and Commercialization of any Licensed Products by or on
behalf of Company (or any of its Affiliates or Sublicensees), including any data and results generated with respect
thereto, without the approval of Biosion; provided that (a) Company shall deliver to Biosion for review and
comment a copy of any proposed publication at least [***] days before its intended submission for publication; and
(b) Biosion shall have the right to (i) provide comments on such proposed publication, which comments Company
will consider in good faith, and (ii) request modifications of the proposed publication or presentation to protect
Biosion’s Confidential Information. Company (and its Affiliates and Sublicensees) will ascribe authorship of any
proposed publication or presentation

43
under this Section 6.5 using accepted standards used in peer-reviewed, academic journals at the time of the
publication or presentation, and any such publication or presentation made by Company (or any of its Affiliates or
Sublicensees) under this Section 6.5 shall contain appropriate acknowledgements of the contribution of Biosion to
the Development activities that are the subject of such publication or presentation, in accordance with generally
accepted academic practices. Once any such publication is accepted for publication, the publishing Party shall
provide the other Party with a copy of the final version of such publication.
6.6
Use of Name. Notwithstanding any provision to the contrary set forth in this Agreement, nothing in this Agreement
grants either Party a right to use the other’s name or logo in any press release, without first obtaining the other
Party’s consent (except for any reference to the other Party as a party to this Agreement or as a developer of a
Licensed Antibody or Licensed Product, subject to the other terms and conditions of this Agreement).
6.7
Equitable Relief. Due to the unique nature of the Confidential Information, the Parties agree that any breach or
threatened breach by a Party of this Article 6 with respect to the other Party’s Confidential Information will cause
not only financial harm to the other Party, but also irreparable harm for which money damages will not be an
adequate remedy. Therefore, the other Party shall be entitled, in addition to any other legal or equitable remedies, to
seek an injunction or similar equitable relief against any such breach or threatened breach by such Party without the
necessity of proving actual damages or posting any bond.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES
7.1
Mutual Representations and Warranties. Each Party hereby represents and warrants to the other Party, as of the
Effective Date, that:
(a)
such Party is duly organized, validly existing and in good standing under the Laws of the jurisdiction of its
incorporation or organization;
(b)
such Party has taken all action necessary to authorize the execution and delivery of this Agreement and the
performance of its obligations under this Agreement;
(c)
this Agreement is a legal and valid obligation of such Party, binding upon such Party and enforceable
against such Party in accordance with the terms of this Agreement, except as enforcement may be limited by
applicable bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium and other laws relating to or
affecting creditors’ rights generally and by general equitable principles;
(d)
the execution, delivery and performance of this Agreement by such Party does not (i) conflict with, breach
or create in any Third Party the right to accelerate, terminate or modify any agreement or instrument to which such
Party is a party or by which such Party is bound, (ii) violate any Law of any Governmental Body having authority
over such Party or any order, writ, judgment, injunction, decree, determination, or award of any court or other
Governmental Body presently in effect applicable to such Party, or (iii) violate such Party’s charter documents,
bylaws or other organizational documents;
(e)
such Party has all right, power and authority to enter into this Agreement and to perform its obligations
under this Agreement, and it has the right to grant to the other the rights, licenses and sublicenses granted pursuant
to this Agreement;

44
(f)
there is no pending Proceeding that has been commenced against such Party that challenges, or would
reasonably be expected to have the effect of preventing, delaying, making illegal, or otherwise interfering with, any
of the transactions contemplated hereby; and
(g)
except for (i) any Regulatory Approvals necessary for the Development, Manufacture or Commercialization
of Licensed Products hereunder or (ii) any required filing with the U.S. Securities and Exchange Commission or
equivalent filings with regard to this transaction in other countries, no authorization, consent, approval, exemption of
or filing or registration by any Third Party or Governmental Body is required with respect to the execution and
delivery of this Agreement by it or the consummation by it of the transactions contemplated hereby.
7.2
Additional Representations and Warranties of Company. Company hereby represents and warrants to Biosion,
as of the Effective Date, that:
(a)
 neither Company nor its Affiliates are subject to any contract, court order or other legal obligation that
would limit or restrict in any material respect its ability to perform its obligations under this Agreement or to
otherwise Develop, Manufacture or Commercialize any Licensed Product as contemplated under this Agreement;
(b)
Company (or its Affiliates) has sufficient funds currently available, or has reasonable means of obtaining
sufficient funds necessary to fulfill its payment obligations under Article 4 and to Develop and Commercialize the
Licensed Products as contemplated under this Agreement;
(c)
subject to relying on the representations and warranties of Biosion as set forth in this Agreement, Company
and its Affiliates have made its own inquiry and investigation into, and based thereon, and the terms and conditions
of this Agreement, has formed an independent judgment concerning the Biosion Licensed Technology, the Licensed
Antibodies and the Licensed Products; and
(d)
Company and its Affiliates acknowledge and agree that (i) except as otherwise expressly set forth in Section
7.1 or Section 7.3, neither Biosion nor any of its Affiliates (nor any of its or their respective Representatives) are
making any other representation or warranty of any kind or nature whatsoever, oral or written, express or implied,
with respect to any of the Biosion Licensed Technology, any Licensed Antibody, any Licensed Product or this
Agreement, including with respect to the use of the Biosion Licensed Technology by or on behalf of Company, its
Affiliates or any Sublicensee, the probable success or profitability of the Biosion Licensed Technology, any
Licensed Antibody or any Licensed Product, or the merchantability or fitness of the Biosion Licensed Technology,
any Licensed Antibody or any Licensed Product for any particular purpose, as applicable, (ii) except for the
representations and warranties expressly set forth in Section 7.1 or Section 7.3, neither Company nor any of its
Affiliates or Sublicensees have relied upon any other representations or warranties made by or on behalf of Biosion
or any of its Affiliates (or any of its or their respective Representatives), and (iii) neither Biosion nor any of its
Affiliates (nor any of its or their respective Representatives) have any liability or responsibility for any such other
representation, warranty, opinion, projection, forecast, advice, statement or information made, communicated or
furnished (orally or in writing) to Company or any of its Affiliates or Sublicensees (or any of its or their respective
Representatives).
7.3
Additional Representations and Warranties of Biosion. Biosion hereby represents and warrants to Company, as
of the Effective Date, that:

45
(a)
Biosion owns or otherwise Controls all right, title and interest in and to the Biosion Licensed Technology
and the Biosion Licensed Technology is free and clear of any liens, charges, encumbrances, in each case, in the Field
in the Company Territory;
(b)
all Existing Biosion Patents are set forth on Schedule 1.19 and (i) the issued Patents included in the Existing
Biosion Patents are subsisting and in good standing; (ii) all Existing Biosion Patents have been filed and maintained
properly and correctly, and all applicable filing or maintenance fees with respect to such Existing Biosion Patents
have been paid on or before the due date for payment; (iii) the pending applications included in the Existing Biosion
Patents are being diligently prosecuted in the respective patent offices in accordance with Law; and (iv) to the
Knowledge of Biosion, all inventors of the Existing Biosion Patents are correctly identified;
(c)
Biosion has obtained, or caused its Affiliates, as applicable, to obtain, written assignments from the named
inventors of all inventorship rights to all Existing Biosion Patents in favor of Biosion and, to its Knowledge, all such
assignments are valid and enforceable;
(d)
the Existing Biosion Patents represent all Patents that Biosion or its Affiliates own or otherwise has rights
under, as of the Effective Date, that are necessary to (i) Develop or Manufacture the Existing BSI-045B Antibody,
the Existing BSI-502 Antibody, the Existing BSI-045B Product or the Existing BSI-502 Product, or (ii)
Commercialize the Existing BSI-045B Product or the Existing BSI-502 Product;
(e)
the Existing Biosion Patents set forth on Schedule 1.19 are not the subject of any pending litigation
procedure, discovery process, inter partes review, post-grant reviews, interference, reissue, reexamination,
opposition, appeal proceedings or any other legal dispute or Proceeding, and, to its Knowledge, no such disputes or
Proceedings have been threatened against Biosion by any Third Party with respect to any such Existing Biosion
Patent;
(f)
Biosion has not previously licensed, assigned, transferred or otherwise conveyed any right, title, option or
interest in and to the Biosion Licensed Technology to any Third Party in the Company Territory in a manner that
would conflict with the rights and licenses granted to Company under this Agreement;
(g)
no claims have been asserted in writing or, to its Knowledge, threatened, against Biosion by any Third
Party: (i) challenging the scope, validity, enforceability, inventorship or ownership of any Existing Biosion Patent; or
(ii) alleging that the Development, Manufacture or Commercialization of the Existing BSI-045B Product or the
Existing BSI-502 Product infringes or misappropriates, or will infringe or misappropriate, any Patent or other
intellectual property or proprietary rights of any Third Party;
(h)
except with respect to any CTTQ Patents, to its Knowledge, the Development, Manufacture or
Commercialization of the Existing BSI-045B Product or the Existing BSI-502 Product as currently contemplated as
of the Effective Date under this Agreement does not infringe or misappropriate, or will not infringe or
misappropriate, any Patent or other intellectual property rights of any Third Party;
(i)
the inventions claimed by the Existing Biosion Patents with respect to any of the Existing BSI-045B
Antibody, the Existing BSI-502 Antibody, the Existing BSI-045B Product or the Existing BSI-502 Product were not
conceived, reduced to practice, discovered, developed or otherwise made in connection with any research activities
funded, in whole or in part, by any grants, funds, and other money received from any Governmental Body, and no
Governmental Body or

46
academic institution has any right to, ownership of (including any “step-in” or “march-in” rights with respect to), or
right to royalties for, or to impose any restriction on the assignment, transfer, grant of licenses or other disposal of
the Existing Biosion Patents;
(j)
except pursuant to the CTTQ Agreements, neither Biosion nor any of its Affiliates has previously entered
into any definitive agreement, whether in writing or otherwise, that granted any Third Party any rights of reference
under or access to the Regulatory Documents existing as of the Effective Date for the Existing BSI-045B Product or
the Existing BSI-502 Product in the Company Territory (“Existing Regulatory Material”);
(k)
Biosion and its Affiliates have generated, prepared, maintained and retained all Existing Regulatory
Material that is required to be maintained or retained pursuant to, and in all material aspects in accordance with,
Law;
(l)
the Existing Inventory was manufactured in accordance with all applicable Law (including GMP) and is
qualified for use in human clinical Development activities in the Company Territory;
(m)
Biosion has provided Company true and correct copies of the CTTQ Agreements and (i) as of the Effective
Date, both Biosion and, to Biosion’s Knowledge, CTTQ, have complied with all of their respective obligations
under the CTTQ Agreements in all material respects, and (ii) neither Biosion nor, to Biosion’s Knowledge, CTTQ, is
in breach of the CTTQ Agreements in any material respect as of the Effective Date;
(n)
Biosion and its Affiliates have conducted (and, to its Knowledge, their respective subcontractors have
conducted) all Development of the Existing BSI-045B Antibody, the Existing BSI-502 Antibody, the Existing BSI-
045B Product and the Existing BSI-502 Product, including any and all pre-clinical studies and Clinical Trials
conducted by or on behalf of Biosion or any of its Affiliates related thereto, in all material aspects in accordance
with Law; and
(o)
neither Biosion nor any of its Affiliates (nor to its Knowledge, any of its or their respective subcontractors)
has employed or otherwise used in any capacity, the services of any Person debarred under United States Law,
including under 21 U.S.C. Section 335a or any foreign equivalent thereof, in connection with the Development or
Manufacture of the Existing BSI-045B Product or the Existing BSI-502 Product.
7.4
DISCLAIMER. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT: (A) NEITHER
PARTY NOR ANY OF ITS AFFILIATES MAKES ANY REPRESENTATION OR EXTENDS ANY
WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, TO THE OTHER PARTY OR ANY OF ITS
AFFILIATES, AND (B) EACH PARTY HEREBY DISCLAIMS ALL IMPLIED WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NON-INFRINGEMENT OF ANY
INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES. EXCEPT AS OTHERWISE EXPRESSLY SET
FORTH IN THIS AGREEMENT, EACH PARTY UNDERSTANDS THAT THE LICENSED ANTIBODIES AND
LICENSED PRODUCTS ARE THE SUBJECT OF ONGOING RESEARCH AND DEVELOPMENT, AND THAT
NEITHER PARTY CAN ASSURE, AND EACH PARTY HEREBY DISCLAIMS ANY REPRESENTATION OR
WARRANTY, THAT THE DEVELOPMENT OR MANUFACTURE OF ANY LICENSED ANTIBODY, OR THE
DEVELOPMENT, MANUFACTURE OR COMMERCIALIZATION OF ANY LICENSED PRODUCT,
PURSUANT TO THIS AGREEMENT WILL RECEIVE REGULATORY APPROVAL OR WILL BE SAFE,
EFFECTIVE, USEFUL OR SUCCESSFUL

47
OR THAT ANY PARTICULAR SALES LEVEL WITH RESPECT TO ANY LICENSED PRODUCTS WILL BE
ACHIEVED.
ARTICLE 8
INDEMNIFICATION
8.1
Indemnification by Biosion. Subject to the other provisions of this Article 8, Biosion shall indemnify, defend and
hold harmless Company and its Affiliates and each of their respective employees, officers, directors and agents
(collectively, the “Company Indemnitees”) from and against any and all liabilities, damages, losses, settlements,
penalties, fines, costs or expenses (including reasonable attorneys’ fees and other expenses of litigation)
(collectively, “Losses”) asserted in suits, claims, actions, demands by a Third Party (“Third Party Claims”) to the
extent resulting from or arising out of: (a) the gross negligence or willful misconduct of Biosion or any Biosion
Indemnitee in connection with the performance of its obligations or exercise of its rights or licenses under this
Agreement; (b) any breach of any of Biosion’s representations, warranties, covenants or obligations under this
Agreement, including any breach of its obligations to perform the Transition Services in accordance with this
Agreement; or (c) the Development, Manufacture or Commercialization of any Licensed Product (including any
Development or Manufacture of the Licensed Antibody incorporated, constituted, contained, comprised or utilized
therein) by or on behalf of Biosion or any of its Affiliates anywhere in the world prior to the Effective Date;
provided, however, that Biosion’s obligations pursuant to this Section 8.1 shall not apply to the extent that such
Losses are covered by Company’s indemnification obligations under Section 8.2.
8.2
Indemnification by Company. Subject to the other provisions of this Article 8, Company shall indemnify, defend
and hold harmless Biosion, its Affiliates and each of their respective agents, employees, officers and directors
(collectively, the “Biosion Indemnitees”) from and against any and all Losses asserted in a Third Party Claim to the
extent resulting from or arising out of: (a) the gross negligence or willful misconduct of Company, any Company
Indemnitee or any Sublicensee in connection with the performance of its obligations or exercise of its rights or
licenses under this Agreement; (b) any breach of any of Company’s representations, warranties, covenants or
obligations under this Agreement; (c) Biosion’s (or its Affiliate’s) provision of any Transition Services in accordance
with the terms of this Agreement; or (d) the Development, Manufacture or Commercialization of any Licensed
Product (including any Development or Manufacture of the Licensed Antibody incorporated, constituted, contained,
comprised or utilized therein) by or on behalf of Company or any of its Affiliates or Sublicensees in the Company
Territory; provided that Company’s obligations pursuant to this Section 8.2 shall not apply to the extent that such
Losses are covered by Biosion’s indemnification obligations under Section 8.1.
8.3
Notification of Claims; Conditions to Indemnification Obligations. As a condition to a Party’s right to receive
indemnification under this Article 8, it shall (a) promptly notify the other Party as soon as it becomes aware of a
Third Party Claim for which indemnification may be sought pursuant to Section 8.1 or Section 8.2, as applicable
(provided that the failure to give such notice will not relieve the indemnifying Party of its indemnity obligation
hereunder except to the extent that such failure materially prejudices the indemnifying Party); (b) cooperate, and
cause the applicable Indemnitee(s) to cooperate, with the indemnifying Party in the defense, settlement or
compromise of such Third Party Claim; and (c) permit the indemnifying Party to control the defense, settlement or
compromise of such Third Party Claim, including the right to select defense counsel (provided, that in no event shall
the indemnifying Party compromise or settle any Third Party Claim in a manner which admits fault or negligence on
the part of the indemnified Party or any Indemnitee without the prior consent of the indemnified Party). Each Party
shall reasonably cooperate with the other Party and its counsel in the course of the defense of any such Third Party
Claim, such

48
cooperation to include using reasonable efforts to provide or make available documents, information and witnesses.
In any such Proceeding, the indemnified Party will have the right to retain its own counsel, but the fees and expenses
of such counsel will be at the expense of the indemnified Party, unless (i) the indemnifying Party will have agreed to
the retention of such counsel and its obligation to pay the fees and expenses of such counsel, or (ii) the named
parties to any such Proceeding (including any impleaded parties) include both the indemnifying Party and the
indemnified Party and representation of both Parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. The indemnified Party shall have no right to settle any such Third Party
Claim without the prior written consent of the indemnifying Party.
8.4
Certain Limitations.
(a)
In the case where the indemnifying Party refrains (in its sole discretion) from defending any Third Party
Claim and an indemnified Party recovers from Third Parties any amount in respect of a matter with respect to which
an indemnifying Party has indemnified it pursuant to this Article 8, such indemnified Party shall promptly pay over
to the indemnifying Party the amount so recovered (after deducting therefrom the full amount of the expenses
incurred by it in procuring such recovery), but not in excess of the sum of: (i) any amount previously so paid by the
indemnifying Party to or on behalf of the indemnified Party in respect of such matter, and (ii) any amount expended
by the indemnifying Party in pursuing or defending any Third Party Claim arising out of such matter.
(b)
Each Party agrees to take all reasonable steps to mitigate their respective Losses upon and after becoming
aware of any event or condition which could reasonably be expected to give rise to any Losses that are
indemnifiable hereunder.
8.5
Insurance.
(a)
Each Party will obtain and maintain in full force and effect, at its cost, reasonable insurance against liability
and other risks associated with its activities contemplated by this Agreement, including its indemnification
obligations herein, in such amounts and on such terms as are determined to be advisable by such Party based on
advice from insurance professionals, for companies of similar size and with similar resources for the activities to be
conducted by it under this Agreement taking into account the scope of the activities for which such is responsible
hereunder.
(b)
Each Party will furnish to the other Party certificates of insurance or other reasonable written evidence of
such Party’s insurance coverage required under this Section 8.5 upon such other Party’s request. Each Party shall
provide the other Party with at least [***] Business Days’ notice prior to cancelling, not renewing or materially
adversely changing such insurance coverage.
8.6
No Consequential Damages. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS
AGREEMENT, TO THE MAXIMUM EXTENT PERMITTED BY LAW, EXCEPT WITH RESPECT TO EACH
PARTY’S (A) INDEMNIFICATION OBLIGATIONS FOR LOSSES CAUSED BY OR ARISING OUT OF THIRD
PARTY CLAIMS UNDER SECTION 8.1 OR SECTION 8.2, AS APPLICABLE; (B) BREACH OF ITS
CONFIDENTIALITY AND NON-USE OBLIGATIONS UNDER ARTICLE 6; (C) BREACH OF BIOSION’S
EXCLUSIVITY OBLIGATIONS UNDER SECTION 2.4; OR (D) WILLFUL MISCONDUCT OR FRAUD, IN NO
EVENT SHALL EITHER PARTY OR ANY OF ITS AFFILIATES BE LIABLE TO THE OTHER PARTY OR
ANY OF ITS AFFILIATES FOR ANY INCIDENTAL, INDIRECT,

49
PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES (INCLUDING FOR LOST REVENUES OR LOST
PROFITS), WHETHER DIRECT OR INDIRECT, REGARDLESS OF THE THEORY OF LIABILITY
(INCLUDING CONTRACT, WARRANTY, TORT, NEGLIGENCE, STRICT LIABILITY OR OTHERWISE), IN
EACH CASE, ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE TRANSACTIONS
CONTEMPLATED HEREIN OR ANY BREACH HEREOF, IRRESPECTIVE OF WHETHER SUCH PARTY OR
ANY REPRESENTATIVE OF SUCH PARTY HAS BEEN ADVISED OF, OR OTHERWISE MIGHT HAVE
ANTICIPATED THE POSSIBILITY OF, ANY SUCH LOSS OR DAMAGE OR WHETHER SUCH LOSS OR
DAMAGE WAS REASONABLY FORESEEABLE.
ARTICLE 9
TERM AND TERMINATION
9.1
Term and Expiration.
(a)
The term of this Agreement (the “Term”) shall commence on the Effective Date and, unless earlier
terminated in accordance with Section 9.2, shall continue in full force and effect, on a country-by-country and
Licensed Product-by-Licensed Product basis, until the date of expiration of the applicable Royalty Term with respect
to a given Licensed Product in a given country, at which time this Agreement shall expire with respect to such
Licensed Product in such country and the terms and conditions of Section 9.1(b) shall apply; provided that this
Agreement shall expire in its entirety upon the expiration of the last to expire Royalty Term for the last remaining
Licensed Product hereunder, as applicable.
(b)
Upon the effective date of any expiration (but, for clarity, not the earlier termination) of this Agreement, (i)
with respect to a given Licensed Product in a given country, (A) the licenses granted by Biosion to Company under
this Agreement, including pursuant to Section 2.1, shall automatically convert to a fully-paid, royalty-free,
perpetual, irrevocable, non-exclusive license solely with respect to such Licensed Product in such country and (B)
this Agreement shall otherwise remain in full force and effect with respect to all other Licensed Products and all
other countries in accordance with the terms herein, and (ii) with respect to this Agreement in its entirety, except as
otherwise set forth in Section 9.4, all rights and licenses granted by each Party to the other Party hereunder shall
immediately terminate, provided that all licenses granted by Biosion to Company pursuant to Section 2.1 shall
automatically convert to fully-paid, royalty-free, perpetual, irrevocable, non-exclusive licenses with respect to all
Licensed Products.
9.2
Termination.
(a)
Termination for Convenience by Company. At any time during the Term, Company may, at its convenience,
(i) terminate this Agreement in its entirety upon not less than (A) [***] days’ prior written notice to Biosion, if such
written notice is given [***] or (B) [***] days’ prior written notice to Biosion, if such written notice is given [***];
or (ii) terminate this Agreement on a Licensed Product-by-Licensed Product basis, with respect to a given Licensed
Product in all Regions in the Company Territory, upon not less than (A) [***] days’ prior written notice to Biosion,
if such written notice is given [***], or (B) [***] days’ prior written notice to Biosion, if such written notice is given
[***].
(b)
Termination for Material Breach.
(i)
If a Party (the “Non-Breaching Party”) believes that the other Party (the “Breaching Party”) has
materially breached this Agreement, then, such Non-Breaching Party may

50
deliver notice of such material breach to the Breaching Party (a “Default Notice”). Following receipt of a Default
Notice, if the Breaching Party does not dispute that it has committed such material breach of this Agreement and the
Breaching Party fails to cure such material breach within (A) with respect to any [***] breach, [***] days following
receipt of such Default Notice; or (B) with respect to any other material breach, [***] days following receipt of such
Default Notice (provided that, in the event of a material breach (other than a [***] breach), if such cure cannot
reasonably be achieved within such [***] day-period and the Breaching Party provides the Non-Breaching Party
with a cure plan that is reasonably acceptable to the Non-Breaching Party and diligently executes such plan, then,
such [***] day-period shall be automatically extended for an additional [***] days), then, the Non-Breaching Party
shall have the right, but not the obligation, to terminate this Agreement in its entirety with immediate effect upon
delivery of notice to the Breaching Party; provided, however, that, in the event of a material breach (other than a
[***] breach) by Company, if such material breach (and the subsequent failure to cure) solely relates to (x) one (1)
or more Licensed Product(s) but does not relate to any other Licensed Products, or (y) one (1) or more Region(s) but
does not relate to any other Region, then, (1) Biosion shall not have the right to terminate this Agreement in its
entirety, but shall have the right to terminate this Agreement solely with respect to the applicable Licensed
Product(s) (together with the corresponding Licensed Antibody(ies) that are incorporated or contained in, or
constituted, comprised or utilized by, such Licensed Product(s) only if all Licensed Products incorporating or
containing, or constitutes, comprises or utilizes such Licensed Antibody are subject to termination) or the applicable
Region(s) with respect to which such material breach relates, and (2) this Agreement shall remain in full force and
effect with respect to all other Licensed Products (including the corresponding Licensed Antibody(ies) that are
incorporated or contained in, or constituted, comprised or utilized by, such Licensed Product(s)) and all other
Region(s), as the case may be.
(ii)
Notwithstanding the foregoing, if the Breaching Party disputes, acting reasonably and in good faith,
the existence, materiality or failure to cure of any such breach (other than any [***] breach) and provides notice to
the Non-Breaching Party of such Dispute within the relevant cure period, then, the Non-Breaching Party will not
have the right to terminate this Agreement in accordance with this Section 9.2(b) with respect to such alleged
material breach unless and until the relevant Dispute has been resolved in accordance with the dispute resolution
procedure set forth in Article 10. It is understood and acknowledged that during the pendency of such Dispute, all
the terms and conditions of this Agreement will remain in effect and the Parties will continue to perform all of their
respective obligations hereunder. If, as a result of the application of such dispute resolution procedures, the
Breaching Party is finally determined to be in material breach of this Agreement and the Breaching Party fails to
cure such material breach within [***] days following such final determination (or such longer period as established
by the arbitrators in such final determination), then, the Non-Breaching Party shall have the right, but not the
obligation, to terminate this Agreement in its entirety with immediate effect upon delivery of notice to the Breaching
Party, subject to the proviso as set forth at the end of Section 9.2(b)(i), as applicable.
(c)
Termination for Insolvency. If, at any time during the Term (i) a case is commenced by or against either
Party under the Bankruptcy Code and, in the event of an involuntary case under the Bankruptcy Code, such case is
not dismissed within [***] days after the commencement thereof, (ii) either Party files for or is subject to the
institution of bankruptcy, dissolution, corporate reorganization, liquidation or receivership Proceedings (other than a
case under the Bankruptcy Code), which Proceedings, if involuntary, shall not have been dismissed within [***]
days after the commencement thereof, (iii) either Party assigns all or a substantial portion of its assets for the benefit
of creditors or admits in writing its inability to generally meet its obligations as they fall due in the general course,
(iv) a receiver or custodian is appointed for either Party’s business, or (v)

51
a substantial portion of either Party’s business is subject to seizure, attachment or similar process and not released
within [***] days thereafter, then, in any such case ((i), (ii), (iii), (iv) or (v), each, a “Bankruptcy Event”), the other
Party may terminate this Agreement in its entirety effective immediately, to the extent permitted by Law, by delivery
of notice to such Party.
(d)
Termination for Patent Challenge. If Company or any of its Affiliates (a) commences or actively and
voluntarily participates in a Patent Challenge; or (b) actively and voluntarily assists any other Third Party in
bringing or prosecuting a Patent Challenge, then, to the extent permitted by Law, Biosion shall have the right to
terminate this Agreement (in its entirety) upon [***] days’ notice to Company, unless Company and its Affiliates
withdraw their participation in such Patent Challenge on or before the [***] day following the date of Biosion’s
notice of such termination.
9.3
Effects of Termination.
(a)
Upon any termination (but, for clarity, not the expiration) of this Agreement, the terms and conditions of this
Section 9.3 shall apply to the maximum extent permitted by Law; provided, however, that, if this Agreement is
terminated (i) by Company pursuant to Section 9.2(a) or by Biosion pursuant to Section 9.2(b), solely with respect to
one or more Licensed Product(s) (each, a “Terminated Product”) and, only if all Licensed Products incorporating
or containing, or constituting, comprising or utilizing such Licensed Antibody are terminated, the corresponding
Licensed Antibody that is incorporated or contained in, or constituted, comprised or utilized by, such Terminated
Product (each, a “Terminated Antibody”), or (ii) by Biosion pursuant to Section 9.2(b), solely with respect to one
or more Region(s) (each, a “Terminated Territory”), in each case ((i) or (ii)), but not in its entirety, then, the
following effects of termination will apply only with respect to such Terminated Product(s) (together with the
corresponding Terminated Antibod(ies), as applicable) or such Terminated Territor(ies), as applicable, and, from and
after the effective date of such termination, each such Terminated Product shall cease to be a Licensed Product and
such corresponding Terminated Antibody shall cease to be a Licensed Antibody in the applicable Terminated
Territor(ies) under this Agreement; provided, further, that, if this Agreement is terminated in its entirety, then, all
references herein to (A) Terminated Products shall include all Licensed Products, (B) Terminated Antibodies shall
include all Licensed Antibodies and (C) Terminated Territory shall include all Regions in the Company Territory.
(b)
Promptly following the effective date of such termination, the Parties will cooperate diligently, reasonably
and in good faith to prepare a written termination and wind-down plan to govern the activities described in this
Section 9.3 (“Termination and Wind-Down Plan”), including, upon the written request of Biosion (and subject to
the remainder of this Section 9.3), to effectuate the timely reversion to Biosion of any Terminated Antibody or
Terminated Product Developed, Manufactured or Commercialized by or on behalf of Company or any of its
Affiliates or Sublicensees in the Terminated Territory prior to such effective date of termination; provided that such
Termination and Wind-Down Plan (including any amendments thereto) shall be subject to the agreement of the
Parties.
(c)
Except as otherwise set forth in this Section 9.3 or the Termination and Wind-Down Plan, (i) all licenses and
rights granted by Biosion to Company with respect to any Terminated Antibody and Terminated Product hereunder,
including pursuant to Section 2.1, shall immediately terminate, and (ii) Company and its Affiliates (and any
Sublicensees whose Sublicense Agreement does not otherwise remain in effect following termination of this
Agreement pursuant to Section 9.3(j)) shall cease any and all Development, Manufacture and Commercialization of
each Terminated Antibody and Terminated Product in the Terminated Territory.

52
(d)
Except as otherwise set forth in this Section 9.3 or the Termination and Wind-Down Plan, Company shall
promptly destroy any remaining quantities of Terminated Products in Company’s (or its Affiliates’, Sublicensees’
(whose Sublicense Agreement does not otherwise remain in effect following termination of this Agreement pursuant
to Section 9.3(j)) or subcontractors’) possession or control, including any Terminated Antibodies or other
intermediates thereof (except to the extent such intermediates are usable for any other Licensed Product that is not a
Terminated Product).
(e)
In the event that this Agreement is terminated by Company pursuant to Section 9.2(a) or by Biosion
pursuant to Section 9.2(b) or Section 9.2(d), then, in each case, upon Biosion’s request:
(i)
Company shall, and hereby does, grant (on behalf of itself and its Affiliates) to Biosion and its
Affiliates an exclusive (even as to Company and its Affiliates), perpetual, irrevocable, transferable, worldwide
license, with the right to freely sublicense (including through multiple tiers), under any Patents, Know-How or other
intellectual property owned or otherwise Controlled by Company (or any of its Affiliates) as of the effective date of
such termination that is necessary to Develop or Manufacture any Terminated Antibodies or Terminated Products, or
to Commercialize any Terminated Products, in each case, in the Terminated Territory and in the form that such
Terminated Antibodies or Terminated Products exist as of the effective date of such termination; provided that, such
license shall be subject to [***];
(ii)
the Parties shall cooperate in good faith to effect the transfer to Biosion of any Clinical Trial data
and results Developed by or on behalf of Company (or any of its Affiliates) with respect to any such Terminated
Antibody or Terminated Product in the Terminated Territory that are included within the scope of the Know-How
licensed to Biosion pursuant to this Section 9.3(e); and
(iii)
the Parties shall negotiate in good faith the terms of a license agreement under which Company may
grant to Biosion (or its Affiliate) any additional licenses under any Patents, Know-How or other intellectual property
owned or otherwise Controlled by Company (or any of its Affiliates) that are not covered by the license granted
pursuant to this Section 9.3(e) with respect to such Terminated Antibodies and Terminated Products in the
Terminated Territory, including commercially reasonable financial terms with respect to any such additional license
grants (it being understood that Company shall be under no obligation to enter into any such license).
(f)
Upon Biosion’s written request, Company shall cooperate with Biosion and provide, at Biosion’s cost and
expense (unless such termination is by Biosion under Section 9.2(b), in which case Company shall bear its own cost
and expense), assistance reasonably requested in writing by Biosion (including as set forth in the Termination and
Wind-Down Plan, as applicable) for the transfer to Biosion of (i) the responsibility for filing, prosecution and
maintenance of any Biosion Patents in the Terminated Territory for which Company (or any of its Affiliates or
Sublicensees) had controlled pursuant to Section 5.2, (ii) the conduct of any Enforcement Action being conducted
by or on behalf of Company (or any of its Affiliates or Sublicensees) pursuant to Section 5.3 solely with respect to
Biosion Licensed Technology in the Terminated Territory or (iii) the conduct of any Third Party Action being
conducted by or on behalf of Company (or any of its Affiliates or Sublicensees) pursuant to Section 5.4 solely with
respect to Biosion Licensed Technology in the Terminated Territory, as applicable.
(g)
Upon the written request of Biosion, at Biosion’s cost and expense, Company shall use reasonable efforts to
transfer to Biosion (or its designee), all Regulatory Documents and Regulatory Approvals transferred to Company
hereunder or otherwise prepared or obtained by or on behalf of Company (or any of its Affiliates or Sublicensees)
prior to the effective date of such termination

53
with respect to any Terminated Antibody or Terminated Product in the Terminated Territory that Company is
permitted to transfer, and Biosion shall assume full responsibility for such Regulatory Documents and Regulatory
Approvals; provided that, to the extent any such Regulatory Documents or Regulatory Approvals cannot be assigned
to Biosion, Company agrees to grant to Biosion and its Affiliates a non-exclusive, fully paid, royalty-free,
irrevocable, perpetual, sublicensable, license and right of reference under Company’s interest in such Regulatory
Documents and Regulatory Approvals (with the right to sublicense and grant further rights of reference, if
permitted) as necessary to Develop and Manufacture such Terminated Antibodies and Terminated Products, and
Commercialize such Terminated Products, in the Terminated Territory.
(h)
In the event that this Agreement is terminated by (i) Company pursuant to Section 9.2(a) or (ii) Biosion
pursuant to Section 9.2(b), in each case ((i) or (ii)), with respect to one or more Licensed Product(s), but not this
Agreement in its entirety, then, effective as of the effective date of such termination with respect to such Terminated
Product(s), Biosion’s exclusivity obligations under Section 2.4 shall terminate and cease to apply for the remainder
of the Term solely with respect to such Terminated Product(s) (and the corresponding Terminated Antibod(ies), as
applicable) in the applicable Terminated Territory; provided that, for clarity, if this Agreement is terminated in its
entirety, Biosion’s exclusivity obligations under Section 2.4 shall terminate and cease to apply effective as of the
effective date of such termination.
(i)
Upon the request of a Disclosing Party (including as set forth in the Termination and Wind-Down Plan, as
applicable), the Receiving Party shall return to Disclosing Party or, at Disclosing Party’s election, destroy, all
relevant records and materials in its possession or control containing or comprising any Know-How, materials or any
other Confidential Information of the Disclosing Party or any of its Affiliates, as applicable; provided that: (i) in the
event that such termination applies only to one (1) or more Terminated Antibodies or Terminated Product(s), but not
the Agreement in its entirety, then the Receiving Party may retain copies of such Confidential Information to the
extent necessary or reasonably useful to perform such Party’s continuing obligations, or exercise its rights, under
this Agreement with respect to any remaining Licensed Antibodies or Licensed Products, (ii) the Receiving Party
may retain a copy of computer records or files containing such Confidential Information that have been created
pursuant to automatic archiving or back-up procedures that cannot reasonably be deleted, and (iii) the Receiving
Party may retain Confidential Information of the Disclosing Party to the extent required for the exercise of any of its
rights that survive such termination or as required by Law; provided, further, that such Confidential Information will
be kept confidential by the Receiving Party in accordance with the terms and conditions of this Agreement for as
long as the Receiving Party is in possession of such Confidential Information.
(j)
Each sublicense granted by or on behalf of Company (or any of its Affiliates or Sublicensees) under the
licenses granted pursuant to Section 2.1 with respect to any Terminated Antibody or Terminated Product in the
Terminated Territory shall automatically terminate upon the effective date of such termination, unless Biosion elects,
in its sole discretion, to assume such sublicense; provided that, in the event that Biosion does elect to assume any
such sublicense, Biosion shall not be obligated to fulfill any obligations to any Sublicensees beyond those
obligations required of Biosion as if this Agreement has not terminated; provided, further, that, Company shall
facilitate an introduction to such Sublicensee and otherwise reasonably cooperate with Biosion and such Sublicensee
in connection with Biosion’s assumption of such Sublicense Agreement, as applicable.

54
9.4
Survival; Accrued Rights and Obligations.
In addition to any other provisions of this Agreement that expressly survive pursuant to the terms herein, as
applicable, the following provisions shall survive any expiration or termination of this Agreement: (i) Article 1 (to
the extent necessary to interpret any surviving provisions of this Agreement), (ii) Section 2.3, (iii) Section 4.6 and
Section 4.7 (with respect to any Net Sales of Licensed Products sold by or on behalf of Company (or any of its
Affiliates or Sublicensees) prior to the effective date of such expiration or termination, or pursuant to the
Termination and Wind-Down Plan following the effective date of such termination, as applicable), (iv) Section 4.9
(solely with respect to any costs or expenses accruing in connection with the Development, Manufacture and
Commercialization of any Licensed Product by or on behalf of Company (or any of its Affiliates or Sublicensees)
prior to the effective date of such termination or pursuant to the Termination and Wind-Down Plan following the
effective date of such termination, as applicable), (v) Section 4.10 and Section 4.12 (with respect to any payment
obligations accruing prior to the effective date of such expiration or termination or any payment obligations that
survive in accordance with this Section 9.4), (vi) Section 4.13, (vii) Section 4.14, (viii) Section 5.1, (ix) Section 6.1
through Section 6.3 (inclusive), (x) Section 6.7, (xi) Section 7.4, (xii) Article 8, (xiii) Section 9.1(b), (xiv) Section
9.3, (xv) this Section 9.4, (xvi) Section 9.5, (xvii) Article 10 and (xviii) Article 11.
(a)
Expiration or termination of this Agreement for any reason shall be without prejudice to any rights that shall
have accrued to the benefit of a Party prior to such termination or expiration and shall not relieve the Parties of any
obligation or liability that accrued hereunder prior to, or that are expressly indicated to survive, such termination or
expiration of this Agreement. In addition, termination of this Agreement shall not preclude either Party from
pursuing all rights and remedies it may have hereunder or at Law or in equity with respect to any breach of this
Agreement nor prejudice either Party’s right to obtain performance of any obligation.
9.5
Effect of Bankruptcy or Insolvency.
(a)
All rights in the licenses granted to Company by Biosion under or pursuant to this Agreement are, and shall
otherwise be deemed to be, for purposes of Section 365(n) of the Bankruptcy Code, if applicable, rights to
“intellectual property” as defined under Section 101 of the Bankruptcy Code. The Parties agree that each Party, as
the recipient of such rights under this Agreement, shall retain and may fully exercise all of its rights and elections
under the Bankruptcy Code, and that this Agreement constitutes an executory contract under Section 365(n) of the
Bankruptcy Code.
(b)
The Parties agree that the Company, as licensee of such rights under this Agreement, shall retain and may
fully exercise all of its rights and elections under the Bankruptcy Code. The Parties further agree that, in the event of
any Bankruptcy Event with respect to Biosion, subject to the Company’s compliance with the terms of this
Agreement, the Company shall be entitled to a complete duplicate of (or complete access to, as appropriate) any
Biosion Know-How and Biosion Materials, which, if not already in the Company’s possession, shall be delivered to
the Company promptly (i) following any such commencement of a bankruptcy Proceeding upon the Company’s
written request therefor, unless Biosion elects to continue to perform all of its obligations under this Agreement or
(ii) if not delivered under clause (i), following the rejection of this Agreement by Biosion.
(c)
All rights, powers and remedies of Company provided for in this Section 9.5 are in addition to and not in
substitution for any and all other rights, powers and remedies now or hereafter existing

55
at Law or in equity (including, without limitation, under the Bankruptcy Code and any similar Laws in any other
country or jurisdiction).
ARTICLE 10
DISPUTE RESOLUTION
10.1
Disputes. The Parties recognize that disputes as to certain matters may from time to time arise during the Term
which relate to either Party’s rights or obligations hereunder. Except as set forth in Section 4.13(c), the Parties agree
that any dispute arising out of or relating to this Agreement, or any document or instrument delivered in connection
herewith (a “Dispute”) shall be resolved solely by means of the dispute resolution procedures set forth in this
Article 10; provided that the foregoing shall not affect a Party’s right to terminate this Agreement under Section 9.2
or seek equitable relief as otherwise provided under this Agreement. Except as set forth in Section 4.13(c), any
Dispute shall first be referred to the Alliance Managers of the Parties, who shall confer in good faith on the
resolution of the issue in an expedient manner; provided, however, that if the Alliance Managers are not able to
agree on the resolution of any such Dispute within [***] days (or such other period of time as mutually agreed by
the Alliance Managers) after such Dispute was first raised by either Alliance Manager, then, such Dispute will, by
written notice of one Party to the other Party, be referred to the Executive Officers of each Party for attempted
resolution pursuant to Section 10.2.
10.2
Escalation to Executive Officers. If a Dispute is referred to the Executive Officers pursuant to Section 10.1, then,
the Executive Officers shall attempt to resolve such Dispute by good faith negotiation within [***] days following
the date on which such Dispute was first referred to them. If the Executive Officers do not resolve such Dispute
within such [***] day-period after referral, then, at any time after such [***] day-period, either Party may elect to
proceed to arbitration in accordance with Section 10.3 with respect to such Dispute by delivering notice to the other
Party.
10.3
Arbitration. If the Executive Officers are unable to resolve a Dispute through the escalation procedures set forth in
Section 10.2 within the time frames set forth therein and a Party elects by delivery of notice to proceed to arbitration
with respect to such Dispute pursuant to Section 10.2, then, the Parties agree that they shall submit such Dispute for
final settlement via binding arbitration in accordance with this Section 10.3, which arbitration shall be conducted in
the English language in New York, New York under the commercial arbitration rules of the American Arbitration
Association (“AAA Rules”), which shall administer the arbitration and act as appointing authority. There shall be
single arbitrator appointed in accordance with the AAA Rules; provided that, if the Parties are unable to mutually
agree on the selection of a single arbitrator, then the tribunal shall select a single arbitrator in accordance with AAA
Rules; provided that such arbitrator shall have reasonably sufficient pharmaceutical industry experience relevant to
the subject matter of such Dispute. The arbitrator shall use best efforts to rule on the Dispute within [***] days after
appointment of the arbitrator. The arbitrator shall issue appropriate protective orders to safeguard each Party’s
Confidential Information. All rulings of the arbitrator shall be in writing and shall be delivered to the Parties as soon
as is reasonably possible. The arbitrator will, in rendering its decision, apply the substantive Law of the State of
Delaware, without reference to its conflict of laws principles. The arbitrator’s authority to award special, incidental,
consequential or punitive damages shall be subject to the limitation set forth in Section 8.6. The decision and award
rendered by the arbitrator shall be final, binding and non-appealable (absent manifest error) and judgment may be
entered upon it in any court of competent jurisdiction. Each Party shall bear its own attorney’s fees, costs, and
disbursements arising out of the arbitration, and shall pay an equal share of the fees and costs of the arbitrator. The
Parties acknowledge and agree that this Agreement and

56
any award rendered pursuant hereto shall be governed by the UN Convention on the Recognition and Enforcement
of Foreign Arbitral Awards.
10.4
Injunctive Relief. No provision herein shall be construed as precluding a Party from bringing an action for
injunctive relief or other equitable relief prior to the initiation or completion of the above procedure.
10.5
Patent and Trademark Disputes. Notwithstanding Section 10.3, any Dispute relating to the scope, ownership,
enforcement, infringement or validity of any Patents or trademarks shall be submitted to a court of competent
jurisdiction in the country in which such Patent or trademark rights were granted or arose.
ARTICLE 11
MISCELLANEOUS PROVISIONS
11.1
Relationship of the Parties. Nothing in this Agreement is intended or shall be deemed, for financial, tax, legal or
other purposes, to constitute a partnership, agency, joint venture or employer-employee relationship between the
Parties. Each Party is an independent contractor. Neither Party shall assume, either directly or indirectly, any liability
of or for the other Party. Neither Party shall have the authority to bind or obligate the other Party, and neither Party
shall represent that it has such authority.
11.2
Assignment.
(a)
Except as expressly provided herein, neither Party shall assign or transfer this Agreement nor any of its
rights or obligations hereunder, whether voluntarily or by operation of law, without the prior consent of the other
Party (not to be unreasonably withheld, conditioned or delayed); provided that either Party may assign or transfer
this Agreement (in its entirety, together with all of its rights and obligations hereunder) to (i) any Affiliate of such
Party or (ii) any Third Party that acquires all or substantially all of such Party’s assets or business to which this
Agreement relates (whether by sale of assets or stock, merger, consolidation, reorganization or otherwise), in each
case ((i) or (ii)), without the consent of the other Party. Each assigning Party shall provide notice to the other Party
promptly following any such assignment or transfer.
(b)
No assignment under this Section 11.2 shall relieve the assigning Party of any of its responsibilities or
obligations hereunder and, as a condition of such assignment, the assignee shall agree to be bound by all obligations
of the assigning Party hereunder. This Agreement shall be binding upon the successors and permitted assigns of the
Parties.
(c)
The Parties acknowledge and agree that the intellectual property rights granted to Company and Biosion
hereunder are personal to each Party, may not be assigned other than in accordance with this Agreement (including
pursuant to this Section 11.2).
(d)
Any assignment or other transfer not in accordance with this Section 11.2 shall be null and void.
11.3
Performance and Exercise by Affiliates.  Each Party shall have the right to have any of its obligations hereunder
performed, or its rights hereunder exercised, by any of its Affiliates and the performance of such obligations by any
such Affiliate shall be deemed to be performance by such Party; provided that each Party shall be responsible for
ensuring the performance of its obligations under this Agreement and that any failure of any Affiliate performing
obligations of a Party

57
hereunder shall be deemed to be a failure by such Party to perform such obligations. For clarity and without
limitation, the foregoing means that each Party may designate or subcontract to an Affiliate to perform its
obligations hereunder or to be the recipient of the other Party’s performance obligations hereunder.
11.4
Further Actions. Each Party agrees to execute, acknowledge and deliver such further instruments and to do all such
other acts as may be necessary or appropriate in order to carry out the purposes and intent of this Agreement.
11.5
Accounting Procedures. Each Party shall calculate all amounts, and perform other accounting procedures required,
under this Agreement and applicable to it in accordance with such Party’s then-current Accounting Standards. All
terms of an accounting or financial nature in this Agreement shall be construed in accordance with the foregoing
Accounting Standard.
11.6
Force Majeure. Neither Party shall be liable to the other Party or be deemed to have breached or defaulted under
this Agreement for failure or delay in the performance of any of its obligations under this Agreement for the time
and to the extent such failure or delay is caused by or results from acts of God, epidemics, pandemics or disease
outbreaks in the United States or elsewhere in the world, earthquake, riot, civil commotion, terrorism, war, industry-
wide strikes or other labor disputes, fire, flood, failure or delay of transportation, omissions or delays in acting by a
Governmental Body, acts of a government or an agency thereof or judicial orders or decrees or restrictions or any
other reason or circumstance that is beyond the reasonable control of the respective Party. The Party affected by a
force majeure event shall (a) provide the other Party with full particulars thereof as soon as it becomes aware of the
same (including its best estimate of the likely extent and duration of the interference with its activities); and (b) use
Commercially Reasonable Efforts to overcome the difficulties created thereby and to resume performance of its
obligations hereunder as soon as practicable.
11.7
No Trademark Rights. Except as set forth in Section 6.6, no right, express or implied, is granted by this Agreement
to either Party to use in any manner the name or any other trade name or trademark of the other Party in connection
with the performance of this Agreement or otherwise.
11.8
Entire Agreement; Amendments. This Agreement (including the Schedules hereto), the Technology Transfer Plan,
any MTR entered into pursuant to Section 2.7, any pharmacovigilance agreement entered into pursuant to Section
3.10(d), the Tripartite CTTQ Agreement, the Termination and Wind-Down Plan (if any) and the Warrant shall
constitute and contain the entire understanding and agreement of the Parties respecting the subject matter hereof and
terminate and supersede any and all prior negotiations, correspondence, understandings and agreements between the
Parties, whether oral or written, regarding such subject matter, including the Existing Confidentiality Agreement and
Existing MTA. To the extent of any express conflict or inconsistency between this Agreement and any Schedule
hereto, except as otherwise expressly provided, the terms and conditions of this Agreement shall control. Except as
specified herein, no waiver, modification or amendment of any provision of this Agreement shall be valid or
effective unless made in a writing referencing this Agreement and signed by a duly authorized officer of each Party.
11.9
Governing Law. This Agreement shall be governed by and interpreted in accordance with the Laws of the State of
Delaware, excluding application of any conflict of Laws principles that would require application of the Law of a
jurisdiction outside of the State of Delaware, except matters of intellectual property that will be determined in
accordance with the intellectual property Laws relevant to the intellectual property in question. In the event of any
conflict between U.S. and

58
foreign Laws, then, U.S. Laws shall govern. The United Nations Convention on Contracts for the International Sale
of Goods shall not apply to this Agreement.
11.10
Notices. Any notice required or permitted to be given under this Agreement shall be in writing and shall be deemed
to have been sufficiently given if delivered (a) in person or via express courier service (signature required) to the
Party to which it is directed at its address shown below (or such other address as such Party shall have last given by
notice to the other Party) or (b) transmitted by email (receipt verified) to the Party to which it is directed at its email
address shown below (or such other email address as such Party shall have last given by notice to the other Party).
Either Party may change its address for purposes hereof by notice to the other in accordance with the provisions of
this Section 11.10.
If to Company, addressed to:
Aclaris Therapeutics, Inc.
701 Lee Road, Suite 103
Wayne, Pennsylvania 19087
United States of America
Attn: [***]
E-mail: [***]
With a copy, which shall not constitute notice, to:
Cooley LLP
One Freedom Square
Reston Town Center, 11951 Freedom Drive
Reston, VA 20190-5656 U.S.A.
Attention: [***] 
Email: [***]
If to Biosion, addressed to:
Biosion, Inc.
5th Floor, Building D
3-1 Zhongdan Unit, South Longshan Rd
Jiangbei New District
Nanjing, Jiangsu, China 210061
Attn: [***]
E-mail: [***]
With copies, which shall not constitute notice, to:
Biosion, Inc.
5th Floor, Building D
3-1 Zhongdan Unit, South Longshan Rd
Jiangbei New District
Nanjing, Jiangsu, China 210061
Attn: [***]
E-mail: [***]
Morgan, Lewis & Bockius LLP

59
502 Carnegie Center Drive
Princeton, NJ 08540
Attn:
[***]
E-mail: [***]
11.11
Waiver. A waiver by either Party of any of the terms and conditions of this Agreement in any instance shall not be
deemed or construed to be a waiver of such term or condition for the future, or of any other term or condition hereof.
All rights, remedies, undertakings, obligations and agreements contained in this Agreement shall be cumulative and
none of them shall be in limitation of any other remedy, right, undertaking, obligation or agreement of either Party.
11.12
Severability. When possible, each provision of this Agreement will be interpreted in such manner as to be effective
and valid under Law, but if any provision of this Agreement is held to be prohibited by or invalid under Law, such
provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement. The Parties shall make a good faith effort to replace the invalid or unenforceable provision with a
valid one which in its economic effect is most consistent with the invalid or unenforceable provision.
11.13
Binding Effect; No Third Party Beneficiaries. As of the Effective Date, this Agreement will be binding upon and
inure to the benefit of the Parties and, subject to Section 11.2, their respective permitted successors and assigns. This
Agreement is intended for the benefit of the Parties, their respective permitted successors and assigns, and is not for
the benefit of, nor many any provision hereof be enforced by, any other Person other than with respect to the
indemnification provisions in Article 8 and as otherwise expressly set forth herein.
11.14
Interpretation. The headings and captions to this Agreement are for convenience only, and are to be of no force or
effect in construing or interpreting any of the provisions of this Agreement. All references herein to Articles,
Sections and Schedules shall be deemed references to Articles and Sections of, and Schedules to, this Agreement
unless the context shall otherwise require. Except where the context otherwise requires, wherever used, (a) the
singular shall include the plural, the plural the singular; (b) the use of any gender shall be applicable to all genders;
(c) the word “or” is used in the inclusive sense (and/or); (d) the words “include,” “includes” and “including” shall be
deemed to be followed by the phrase “without limitation”; (e) the word “will” will be construed to have the same
meaning and effect as the word “shall”; (f) any definition of or reference to any agreement, instrument or other
document herein will be construed as referring to such agreement, instrument or other document as from time to
time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements
or modifications set forth herein); (g) any reference herein to any Person will be construed to include the Person’s
successors and assigns; (h)  the words “herein,” “hereof” and “hereunder,” and words of similar import, will be
construed to refer to this Agreement in its entirety and not to any particular provision hereof; (i) the word “notice”
will mean notice in writing (whether or not specifically stated) and the phases “in writing”, “written” or words of
similar import, shall include any written instrument or communication delivered via hard copy or transmitted by
email (receipt verified) but excludes any transmission via instant message or similar electronic communication,
unless otherwise specified herein; (j) provisions that require that a Party, the Parties or any committee hereunder
“agree,” “consent” or “approve” or words of similar import will require that such agreement, consent or approval be
specific and in writing, whether by written agreement, letter, approved minutes or otherwise; (k) references to any
specific Law or article, section or other division thereof, will be deemed to include the then-current amendments
thereto or any replacement or successor Law thereof; (l) a number of days, unless otherwise specified, refers to
calendar days (and not, for clarity, Business Days); (m) countries shall include territories; and (n) when the terms
Develop,

60
Manufacture and Commercialize are used collectively, such meaning includes to research, develop, practice, make,
manufacture, use, exercise, offer for sale, sell, import, export, display, distribute, modify, make derivative works of,
reproduce and commercialize. Each Party represents that it has been represented by legal counsel in connection with
this Agreement and acknowledges that it has participated in the drafting hereof. In interpreting and applying the
terms and provisions of this Agreement, the Parties agree that no presumption will apply against the Party which
drafted such terms and provisions. The official language of this Agreement and between the Parties for all
correspondence shall be the English language. If there is a discrepancy between any translation of this Agreement
and the English language version of this Agreement, the English language version of this Agreement shall prevail.
11.15
Counterparts. This Agreement may be executed in counterparts, each of which will be deemed an original, and all
of which together will be deemed to be one and the same instrument. A facsimile, portable document format (PDF)
or other electronic copy of this Agreement, including the signature pages, will be deemed an original.
[SIGNATURE PAGE FOLLOWS]

[Signature Page to Exclusive License Agreement]
IN WITNESS WHEREOF, duly authorized representatives of the Parties have executed this Agreement as of the Effective
Date.
BIOSION, INC.
Signature:
/s/ Mingjiu Chen
Printed Name:
Mingjiu Chen
Title:
CEO
ACLARIS THERAPEUTICS, INC.
Signature:
/s/ Neal Walker
Printed Name:
Neal Walker
Title:
Interim Chief Executive Officer

Execution Version
1
Exhibit 10.27
CERTAIN IDENTIFIED INFORMATION HAS BEEN OMITTED FROM THIS EXHIBIT BECAUSE IT IS (I) NOT
MATERIAL AND (II) OF THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.
“[***]” INDICATES THAT INFORMATION HAS BEEN OMITTED.
COLLABORATION AGREEMENT
THIS COLLABORATION AGREEMENT (this “Agreement”) is entered into as of November 18, 2024 (the “Effective
Date”).
PARTIES
(1) Chia Tai Tianqing Pharmaceutical Group, Co., Ltd. (正大天晴药业集团股份有限公司), a company organized and existing under the
laws of the People’s Republic of China and having a place of business at 1099 Fuying Road, Jiangning District, Nanjing, Jiangsu
Province, P.R. China 211122 (“CTTQ” )
(2) Biosion, Inc. (博奥信生物技术（南京）有限公司), a company organized and existing under the laws of the People’s
Republic of China and having a place of business at 5th Floor, Building D, 3-1 Zhongdan Unit, South Longshan Rd,
Jiangbei New District, Nanjing, Jiangsu, China 210061 (“Biosion”)
(3) Aclaris Therapeutics, Inc., a corporation organized under the laws of the State of Delaware and having a place of
business at 701 Lee Road, Suite 103, Wayne, Pennsylvania 19087, United States of America (“Aclaris”)
Each of Biosion, Aclaris and CTTQ may be individually referred to as a “Party”, and collectively referred to as the “Parties”.
RECITALS
(1)
[***]
(2)
[***]
(3)
Biosion has entered into an exclusive license agreement attached hereto as Exhibit A (hereinafter referred to as the “Biosion-Aclaris
Agreement”) with Aclaris as of the effective date of this Agreement, which agreed on terms relating to Biosion’s authorization of
Aclaris to develop, register, manufacture, and commercialize BSI-045B, BSI-502, and TSLP antibodies and products.
(4)
[***]
(5)
[***]
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual promises hereinafter set forth, and the receipt
and sufficiency of which are hereby acknowledged, the Parties intending to be legally bound hereto hereby agree as follows:
1.
DEFINITIONS AND INTERPRETATION

Execution Version
2
In this Agreement, capitalized terms and expressions shall have the same meaning as in (1) the IL-4R Agreement or the
TSLP Agreement, as applicable (and each as amended by the Supplementary Agreements) and (2) the Biosion-Aclaris
Agreement, except if explicitly otherwise provided in this Agreement. In the event of any difference between a definition set
forth in the IL-4R Agreement or the TSLP Agreement (as applicable) and a definition set forth in the Biosion-Aclaris
Agreement, the definition in the IL-4R Agreement or the TSLP Agreement (as applicable) shall prevail (except for Section 5
of this Agreement for which the Biosion-Aclaris Agreement shall prevail).
2.
INTELLECTUAL PROPERTY MATTERS
2.1 Covenants Not to Sue
(1)
Each of Aclaris and Biosion covenants that during the term of this Agreement, it will not sue CTTQ or any of CTTQ’s successors in
interest, assignees, licensees or sublicensees (i) for infringement of any of Aclaris’ or Biosion’s (whether owned or licensed) patents
on account of the development, manufacturing and commercialization of the IL4R Monoclonal Antibodies, (ii) for infringement of
any of Aclaris’ or Biosion’s patents (whether owned or licensed) on account of the development, manufacturing and
commercialization of BSI-045B Antibodies and BSI-045B Products in Greater China [***]. Such covenant shall be binding upon
any successor in interest, assignee, licensee or sublicensee of such Aclaris and Biosion patents.
(2)
Each of Aclaris and Biosion covenants that during the term of this Agreement, it will not sue CTTQ or any of CTTQ’s successors in
interest, assignees, licensees or sublicensees for infringement of any of Aclaris’ or Biosion’s patents (whether owned or licensed) or
breach of the TSLP Agreement or IL-4R Agreement (i) on account of the development and manufacturing of BSI-045B Antibodies
and BSI-045B Products in ROW solely for the development and commercialization of BSI-045B Antibodies and BSI-045B
Products in Greater China [***]. Such covenant shall be binding upon any successor in interest, assignee, licensee or sublicensee of
Aclaris, Biosion and such Aclaris and Biosion patents.
(3)
CTTQ covenants that during the term of this Agreement, CTTQ will not sue Aclaris or Biosion or any of Aclaris’ or Biosion’s
successors in interest, assignees, licensees or sublicensees (i) for  infringement of any of CTTQ’s patents (whether owned or
licensed) on account of the development, manufacturing and commercialization of a Licensed Antibody or Licensed Product in
ROW, and (ii) for infringement of any of CTTQ’s patents (whether owned or licensed) or breach of the TSLP Agreement or IL-4R
Agreement on account of the development and manufacturing of a Licensed Antibody or Licensed Product in Greater China solely
for the development and commercialization of a Licensed Antibody or Licensed Product in ROW. Such covenant shall be binding
upon any successor in interest, assignee, licensee or sublicensee of CTTQ and such CTTQ patents.
2.2 Intellectual Property Cooperation

Execution Version
3
During the drafting, filing, application, and maintenance of any patent applications related to the IL4R Monoclonal
Antibodies, Licensed Antibodies or Licensed Products intellectual property, the parties may discuss relevant issues in good
faith and under an obligation of confidentiality and non-use; however, each party shall retain the final decision-making
authority over the filing, prosecution and maintenance of their respective patent applications and patents.
3.
Development Collaboration
3.1 Scientific Publication
In the event of any joint development, Aclaris and CTTQ hereby agree to discuss and determine in good faith a  joint
publication  strategy for the data  regarding the Licensed Product, and (i)  jointly draft such  publication; (ii) prepare
such publication within a mutually agreed upon time; and (iii) have such joint publication reviewed and approved by the
duly authorized officers of Aclaris and CTTQ prior to submission of the publication to the agreed upon scientific journal.
Each Party agrees to acknowledge the contribution of the other Parties and such other Parties’ employees in all publications
as scientifically appropriate. Once any such publication is accepted for publication, the publishing Party shall provide the
other Party with a copy of the final version of such publication.
3.2 Development Plans
Upon the request of either CTTQ or Aclaris, [***] per calendar year, CTTQ and Aclaris shall convene to provide updates to
the other Party as to its development plans with respect to BSI-045B Products [***], in its respective territory for discussion.
CTTQ and Aclaris will discuss in good faith about any material development activities (e.g. new indication, new dosing or
new combination therapy).
3.3 Naming Rights
[***]. The Parties acknowledge that Biosion and CTTQ have submitted names for BSI-045B with the World Health
Organization; the Parties agree that to the extent a third party objects to such names during the objection period, all Parties
shall collaborate in good faith, and Aclaris shall have the sole right to select, naming rights with respect to BSI-045B,
including by creating name candidates for the International Nonproprietary Name (“INN”) application, provided that it shall
seek and consider in good faith any reasonable comments from CTTQ and CTTQ will be responsible for applying for an
INN for BSI-045B and for correspondence with WHO.
3.4 Data
Each of Aclaris and CTTQ will reasonably cooperate with the other Party and, subject to all applicable Chinese legal
regulations, grant to such other Party (or its licensees) a right of reference and use (together with copies) to any necessary or
reasonably useful data and regulatory materials with respect to Licensed Antibodies and Licensed Products in such Party’s

Execution Version
4
possession to support the other Party’s related commercial activities and technology transfer in its respective territory.
4.
ADVERSE EVENTS REPORTING
Promptly following the Effective Date, but in any event no later than [***] days after the Effective Date, CTTQ and Aclaris
shall enter into a pharmacovigilance and adverse event reporting agreement setting forth the worldwide pharmacovigilance
procedures with respect to the applicable Licensed Product, [***] such as safety data sharing, adverse events reporting and
prescription events monitoring (the “Pharmacovigilance Agreement”). Such procedures shall be in accordance with, and
enable CTTQ and Aclaris to fulfill, local and national regulatory reporting obligations under applicable laws. Aclaris shall
establish and maintain the global safety database for the Licensed Products [***] at [***] cost and expense, and shall
provide CTTQ with access to such global safety database [***]. Each of CTTQ and Aclaris shall hold the primary
responsibility for reporting quality complaints, adverse events and safety data related to applicable Licensed Products [***]
in its respective territory to the applicable regulatory authorities in its respective territory, as well as responding to safety
issues and to all requests of regulatory authorities in its respective territory related to applicable Licensed Product [***], in
each case at [***] cost and to the extent required by the applicable laws. Each of CTTQ and Aclaris agrees to comply with
its respective obligations under the Pharmacovigilance Agreement and to cause its affiliates, licensees and sublicensees to
comply with such obligations.
5.
FINANCIALS
5.1 Direct Payment
The Parties hereby agree that, in lieu of payment of any amounts that would otherwise be due and payable by Biosion
pursuant to the TSLP Agreement as a result of any consideration received by Biosion under the Biosion-Aclaris Agreement,
Aclaris shall make directly to CTTQ (a) the upfront payment as set forth in Section 5.2 below; (b) the regulatory milestone
payments as set forth in Section 5.3 below; (c) the sales milestone payments as set forth in Section 5.4 below; and (d) the
equity consideration as set forth in Section 5.5 below, in each case, in accordance with this Agreement. Such payments shall
be independent of and not contingent upon the performance of any obligations by Biosion under this Agreement or the
Biosion-Aclaris Agreement.
5.2 Upfront Consideration
On the Effective Date, Aclaris shall pay to CTTQ the following one- time, non-refundable, non-creditable payment of [***]
as an upfront payment.
5.3 Regulatory Milestones
Aclaris shall pay to CTTQ the following one-time, non-refundable, non-creditable Regulatory Milestone Payments upon the
first achievement by or on behalf of Aclaris or any of its Affiliates or Sublicensees of the corresponding Regulatory
Milestone Event with respect to [***] to

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5
achieve such Regulatory Milestone Event, in each case, subject to and in accordance with this Section 5.3:
Regulatory Milestone Event
Regulatory Milestone
Payment (USD $)
1. Earlier of First Marketing Approval or [***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
Within [***] days following the achievement of a given Regulatory Milestone Event by Aclaris or any of its Affiliates or
Sublicensees, as applicable, Aclaris shall deliver notice thereof to CTTQ, together with payment of the corresponding
Regulatory Milestone Payment.
5.4 Sales Milestones
Aclaris shall pay to CTTQ the following one-time, non-refundable, non-creditable Sales Milestone Payment upon the first
achievement of the corresponding Sales Milestone Event based on the aggregate annual Net Sales of all Licensed Products
(including all Indications therefor) by or on behalf of any Selling Party in the Company Territory during a given Calendar
Year:
Sales Milestone Event
Sales Milestone
Payment (USD $)
First achievement of aggregate annual Net Sales of all
Licensed Products throughout the Company Territory of [***]
[***]
First achievement of aggregate annual Net Sales of all
Licensed Products throughout the Company Territory of [***]
[***]

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First achievement of aggregate annual Net Sales of all
Licensed Products throughout the Company Territory of [***]
[***]
First achievement of aggregate annual Net Sales of all
Licensed Products throughout the Company Territory of [***]
[***]
First achievement of aggregate annual Net Sales of all
Licensed Products throughout the Company Territory of [***]
[***]
First achievement of aggregate annual Net Sales of all
Licensed Products throughout the Company Territory of [***]
[***]
With respect to each Sales Milestone Event set forth above, a Sales Milestone Payment shall be paid upon the first
achievement of the corresponding Sales Milestone Event, regardless of the number of times a given Sales Milestone Event is
achieved. Aclaris shall notify CTTQ in connection with the Royalty Report delivered pursuant to Section 4.7(c) of Biosion-
Aclaris Agreement for the applicable Calendar Quarter during which a given Sales Milestone Event is first achieved by a
Selling Party, and Aclaris shall make payment of the corresponding Sales Milestone Payment together with such Royalty
Report.
5.5 Equity Consideration
Aclaris shall issue a Common Stock Purchase Warrant, dated as of the date hereof, in favor of CTTQ, which entitles CTTQ
to purchase [***] shares of common stock of Aclaris, in the form attached to the Biosion-Aclaris Agreement.
5.6 Payment Term
All payments to CTTQ hereunder shall be made by deposit of Dollars in the requisite amount to such bank account as CTTQ
may from time to time designate by written notice to Aclaris. The Parties hereby agree that the provisions pertaining to
payment, including but not limited to Mode of Payment and Currency, Blocked Payments, Late Payments, Records, and
Taxes, as delineated in Section 4.10 to and including 4.14 of Biosion-Aclaris Agreement, shall apply mutatis mutandis to this
Agreement.
6.
CROSS-INDEMNITY
6.1 Indemnification by Aclaris
Aclaris shall defend, indemnify and hold harmless CTTQ, its Affiliates, and their directors, officers, employees and agents
(individually and collectively, the “CTTQ Indemnitee(s)”) from and against all losses, liabilities, damages and expenses
(including reasonable attorneys’ fees

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7
and costs) incurred in connection with any claims, demands, actions or other proceedings by any third party (individually
and collectively, “Losses”) to the extent arising from (x) the development, manufacture and commercialization of Licensed
Products in the ROW by or on behalf of Aclaris or any of its Affiliates or sublicensees, including product liability claims
relating to Licensed Products in the ROW; or (y) the negligence, willful misconduct or breach of the Agreement by any
Aclaris Indemnitee; except in each case to the extent such Losses arise out of the negligence, willful misconduct or breach of
this Agreement by any CTTQ Indemnitee.
6.2 Indemnification by CTTQ
CTTQ shall defend, indemnify and hold harmless Aclaris, Biosion, their respective Affiliates, and their directors, officers,
employees and agents (individually and collectively, the “Aclaris Indemnitee(s)”) from and against all Losses to the extent
arising from (x) the development, manufacture and commercialization of Licensed Products in Greater China by or on behalf
of CTTQ or any of its Affiliates, licensees or sublicensees, including product liability claims relating to Licensed Products in
Greater China; or (y) the negligence, willful misconduct or breach of the Agreement by any CTTQ Indemnitee; except in
each case to the extent such Losses arise out of the negligence, willful misconduct or breach of this Agreement by any
Aclaris Indemnitee.
6.3 Indemnification Procedure
If any Party is seeking indemnification under Sections 6.1 or 6.2, as applicable (the “Indemnified Party”), it shall inform the
other Party (the “Indemnifying Party”) of the claim giving rise to the obligation to indemnify pursuant to such Section within
ten (10) Business Days after receiving notice of the claim (it being understood and agreed, however, that the failure or delay
by an Indemnified Party to give such notice of a claim shall not affect the indemnification provided hereunder except to the
extent the Indemnifying Party shall have been prejudiced as a result of such failure or delay to give notice). Subject to
Article 3 of the TSLP Agreement and IL-4R Agreement, as applicable, the Indemnifying Party shall have the right to and
shall assume the defense of any such claim for which it is obligated to indemnify the Indemnified Party. The Indemnified
Party shall cooperate with the Indemnifying Party and the Indemnifying Party’s insurer as the Indemnifying Party may
reasonably request, and at the Indemnifying Party’s cost and expense. The Indemnified Party shall have the right to
participate, at its own expense and with counsel of its choice, in the defense of any claim that has been assumed by the
Indemnifying Party, provided that, subject to Article 3 of the TSLP Agreement and IL-4R Agreement, as applicable, the
Indemnifying Party shall ultimately control such claim. No Party shall have the obligation to indemnify any other Party in
connection with any settlement made without the Indemnifying Party’s written consent, which consent shall not be
unreasonably withheld or delayed.
7.
TERM and TERMINATION
7.1 Term and Termination
This Agreement shall commence on the Effective Date and unless terminated earlier by the mutual written consent of the
Parties, shall expire upon the expiration or termination of the Biosion-Aclaris Agreement.

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7.2 Ability for Aclaris to Cure Breach
If, at any time during the term of this Agreement, Biosion breaches the IL-4R Agreement or the TSLP Agreement in such a
manner as to give rise to the right of CTTQ to terminate either the IL-4R Agreement or TSLP Agreement, CTTQ shall notify
Aclaris of such breach in writing. If Biosion fails to cure such breach, and such breach was not caused by an act or omission
of Aclaris, Aclaris shall have the right, within [***] days after such notice, to cure such breach on behalf of Biosion,
provided that Aclaris notifies CTTQ within [***] days after receipt of such notice that it intends to cure such breach.
8.
MISCELLANEOUS
8.1 Notices
Any notice or communication required or permitted under this Agreement shall be sent to the address specified in Section
11.10 of Biosion-Aclaris Agreement for Biosion and Aclaris.
If to CTTQ, addressed to:
Chia Tai Tianqing Pharmaceutical Group, Co., Ltd.
1099 Fuying Road, Jiangning District, Nanjing, Jiangsu Province, P.R. China 211122
Attn: [***]
E-mail: [***]
With copies, which shall not constitute notice, to:
Chia Tai Tianqing Pharmaceutical Group, Co., Ltd.
1099 Fuying Road, Jiangning District, Nanjing, Jiangsu Province, P.R. China 211122
Attn: [***]
E-mail:[***]
Either party shall promptly notify the other party in writing in advance of any changes to their notice delivery address.
8.2 Governing Law
This Agreement shall be governed by and construed in accordance with the same laws as set forth in Section 11.9 of
Biosion-Aclaris Agreement
8.3 Counterparts
This Agreement may be executed in counterparts, each of which will be deemed an original, and all of which together will
be deemed to be one and the same instrument. A facsimile,

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9
portable document format (PDF) or other electronic copy of this Agreement, including the signature pages, will be deemed
an original.
8.4 Assignment
This Agreement shall inure to the benefit of and be binding upon each of the Parties and each of their respective permitted
successors and permitted assigns.
8.5 Confidentiality
As between Aclaris and CTTQ, the terms and conditions of Sections 6.1, 6.2, 6.4 and 6.6 of the Biosion-Aclaris Agreement
shall apply mutatis mutandis to information disclosed by Aclaris or CTTQ to each other pursuant to this Agreement.
8.6 Entire Agreement
This Agreement (together with the agreements referenced in the recitals hereto) constitutes the entire and final agreement
and understanding between the Parties and replaces and supersedes all prior discussions and agreements between them with
respect to the subject matter hereof.
[No further text below, Signature Page for the Collaboration Agreement among CTTQ, Biosion, and Aclaris]

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10
IN WITNESS WHEREOF, duly authorized representatives of the Parties have executed this Agreement as of the Effective
Date.
Chia Tai Tianqing Pharmaceutical Group, Co., Ltd.（正大天晴药业集团股份有限公司）
Signature:
/s/ Philip Duong
Printed Name: Philip Duong
Title:
Head of international business
Biosion, Inc.（博奥信生物技术（南京）有限公司）
Signature:
/s/ Mingjiu Chen
Printed Name: Mingjiu Chen
Title:
CEO
Aclaris Therapeutics, Inc.
Signature:
/s/ Neal Walker
Printed Name: Neal Walker
Title:
Interim Chief Executive Officer

1
Exhibit 10.28
CERTAIN IDENTIFIED INFORMATION HAS BEEN OMITTED FROM THIS EXHIBIT BECAUSE IT IS (I) NOT
MATERIAL AND (II) OF THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.
“[***]” INDICATES THAT INFORMATION HAS BEEN OMITTED.
THIS WARRANT AND THE SECURITIES TO BE ISSUED UPON ITS EXERCISE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS
OF ANY STATE OR OTHER JURISDICTION. THIS WARRANT AND THE SECURITIES TO BE ISSUED UPON ITS
EXERCISE MAY NOT BE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF
REGULATION S PROMULGATED UNDER THE SECURITIES ACT, PURSUANT TO REGISTRATION UNDER THE
SECURITIES ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION (INCLUDING
WITHOUT LIMITATION THOSE UNDER SECTION 4(A)(2) OF THE SECURITIES ACT OR REGULATION D).
HEDGING TRANSACTIONS INVOLVING THIS WARRANT AND THE SECURITIES TO BE ISSUED UPON ITS
EXERCISE MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.
THIS WARRANT AND THE SECURITIES TO BE ISSUED UPON ITS EXERCISE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT, AND THIS WARRANT MAY NOT BE EXERCISED BY OR ON BEHALF OF ANY
U.S. PERSON UNLESS REGISTERED UNDER THE SECURITIES ACT OR AN EXEMPTION FROM SUCH
REGISTRATION (INCLUDING WITHOUT LIMITATION THOSE UNDER SECTION 4(A)(2) OF THE SECURITIES
ACT OR REGULATION D) IS AVAILABLE.
COMMON STOCK PURCHASE WARRANT
ACLARIS THERAPEUTICS, INC.
Warrant Shares: [●]
Initial Exercise Date: November 18, 2024
Issue Date: November 18, 2024
THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, [●] or its
permitted assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions
hereinafter set forth, at any time on or after the date hereof (the “Initial Exercise Date”) and the date on which this Warrant is
exercised in full (the “Termination Date”) but not thereafter, to subscribe for and purchase from Aclaris Therapeutics, Inc., a
Delaware corporation (the “Company”), up to [•] shares (as subject to adjustment hereunder, the “Warrant Shares”) of
Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price,
as defined in Section 2(b).
Section 1.
Certain Definitions. Unless otherwise defined elsewhere in this Warrant, capitalized terms used
herein shall have the meanings set forth below:
(a)
“Affiliate” means any Person that, directly or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with a Person as such terms are used in and construed under Rule
405 under the Securities Act.
(b)
“Business Day” means a day other than (a) Saturday or Sunday; (b) any public holiday in PRC or
New York, NY, United States; or (c) any day on which banking institutions in PRC or New York, NY, United States are
authorized or required by law to close.

2
(c)
“Common Stock” means the common stock of the Company, par value $0.00001 per share.
(d)
“Common Stock Equivalents” means any securities of the Company or its Subsidiaries which would
entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock,
right, option, warrant or other instrument that is, at any time, convertible into or exercisable or exchangeable for, or
otherwise entitles the holder thereof to receive, Common Stock.
(e)
“ODI Approvals” means the completion of the overseas direct investment filing and the obtaining of
the relevant approval from the National Development and Reform Commission of the PRC and the Ministry of Commerce
of the PRC and/or the competent local counterparts, as well as the obtaining of relevant approvals and consents from the
State Administration of Foreign Exchange of the PRC or the related foreign exchange bank with respect to the acquisition of
the Warrant Shares.
(f)
“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated
association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof)
or other entity of any kind.
(g)
“PRC” means People’s Republic of China (excluding, for the purposes of this Agreement, the Hong
Kong Special Administrative Region, the Macau Special Administrative Region, or Taiwan).
(h)
“Regulation D” means Regulation D as promulgated under the Securities Act, as amended.
(i)
“Rule 144” means Rule 144 promulgated by the Securities and Exchange Commission pursuant to
the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter
adopted by the Securities and Exchange Commission having substantially the same purpose and effect as such Rule.
(j)
“Securities Act” means the Securities Act of 1933, as amended.
(k)
“Subsidiary” means any direct or indirect subsidiary of the Company, including, where applicable,
any direct or indirect subsidiary of the Company formed or acquired after the date hereof.
(l)
“Trading Day” means a day on which the principal Trading Market is open for trading.
(m)
“Trading Market” means any of the following markets or exchanges on which the Common Stock is
listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global
Market, the Nasdaq Global Select Market, the New York Stock Exchange (or any successors to any of the foregoing).
(n)
“Transfer Agent” means Broadridge Corporate Issuer Solutions, Inc., the current transfer agent of
the Company, with a mailing address of 1717 Arch Street, Suite 1300, Philadelphia, PA 19103, and any successor transfer
agent of the Company.
(o)
“U.S. Person” has the meaning given such term under Rule 902(k) of Regulation S promulgated
under the Securities Act.

3
Section 2.
Exercise.
(a)
Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in
whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery
to the Company of a duly executed PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the
form annexed hereto (the “Notice of Exercise”); provided, that where an ODI Approval is required to be obtained by the
Holder or its designee in order for the Holder or such designee to hold the Warrant Shares, then such exercise of the
purchase rights represented by this Warrant shall only be made subject to the Holder or such designee having received the
ODI Approval and delivered to the Company evidence thereof. Within [***] following the date of exercise as aforesaid, the
Holder or its designee shall deliver the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of
Exercise by wire transfer unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable
Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of
guarantee or notarization) of any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder
shall not be required to physically surrender this Warrant to the Company until the Holder or its designee has purchased all
of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall
surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which the final Notice
of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total
number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares
purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Company shall
maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Holder and any
assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph,
following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for
purchase hereunder at any given time may be less than the amount stated on the face hereof.
Nonetheless, this Warrant may not be exercised by or on behalf of any U.S. Person unless registered under the
Securities Act or an exemption from such registration (including without limitation those under section 4(a)(2) of the
Securities Act or Regulation D) is available. To exercise the purchase rights represented by this Warrant in accordance with
the provisions of Regulation S, the Holder must give to the Company written certification that the Holder is not a U.S.
Person and the Warrant is not being exercised on behalf of a U.S. Person or a written opinion of counsel to the effect that this
Warrant and the securities delivered upon exercise thereof have been registered under the Securities Act or are otherwise
exempt from registration thereunder. Further, this Warrant may not be exercised within the United States, and the Warrant
Shares may not be delivered within the United States upon exercise, other than in offerings deemed to meet the definition of
“offshore transaction” under Rule 902(h) of Regulation S promulgated under the Securities Act, unless registered under the
Securities Act or an exemption from such registration (including without limitation those under section 4(a)(2) of the
Securities Act or Regulation D) is available.
(b)
Exercise Price. The exercise price per share of Common Stock under this Warrant shall be
$0.00001, subject to adjustment hereunder (the “Exercise Price”).
(c)
Cashless Exercise. This Warrant may also be exercised, in whole or in part, at such time by means
of a “cashless exercise” in which the Holder or its designee shall be entitled to receive a number of Warrant Shares equal to
the quotient obtained by dividing [(A-B) (X)] by (A), where:
(A) = as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of
Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a
day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a
Trading Day prior to the opening of “regular

4
trading hours” (as defined in Rule 600(b) of Regulation NMS promulgated under the federal securities laws)
on such Trading Day, (ii) the VWAP on the date of the applicable Notice of Exercise if such Notice of
Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours
thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day)
pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date
of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered
pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;
(B) = the Exercise Price of this Warrant, as adjusted hereunder; and
(X) = the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the
terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.
For purposes of Rule 144 promulgated under the Securities Act, it is intended, understood and acknowledged that
the Warrant Shares issued in a “cashless exercise” transaction shall be deemed to have been acquired by the Holder or its
designee, and the holding period for the Warrant Shares shall be deemed to have commenced, on the Issue Date. If Warrant
Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of
the Securities Act, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised, and the
holding period of the Warrant Shares being issued may be tacked on to the holding period of this Warrant.  The Company
agrees not to take any position contrary to this Section 2(c).
“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the
Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock
for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as
reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)),
(b) if the Common Stock is not then listed or quoted on a Trading Market and if prices for the Common Stock are then
reported on the OTCQB Venture Market (“OTCQB”) or the OTCQX Best Market (“OTCQX”), as applicable, the volume
weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as
applicable, (c) if the Common Stock is not then listed or quoted for trading on a Trading Market or on the OTCQB or
OTCQX and if prices for the Common Stock are then reported on the Pink Open Market operated by the OTC Markets, Inc.
(or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the
Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an
independent appraiser selected in good faith by the Holder and reasonably acceptable to the Company, the fees and expenses
of which shall be paid by the Company.
(d)
Mechanics of Exercise.
(i)
Delivery of Warrant Shares Upon Exercise. Upon exercise of this Warrant, the Company
shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer Agent to the Holder or its designee by
crediting such aggregate number of Warrant Shares specified by the Holder in the Notice of Exercise and to which the
Holder or its designee is entitled pursuant to such exercise to the account of the Holder’s or its designee’s balance account
with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is
then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the
Warrant Shares to or resale of the Warrant Shares by Holder or its designee or (B) the Warrant Shares

5
are eligible for resale by the Holder or its designee without volume or manner-of-sale limitations pursuant to Rule 144 by the
date that is [***] after the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery
Date”); provided that if the conditions of clauses (A) and (B) above are not true, the Company shall cause the Transfer Agent
to either (i) record the Warrant Shares in the name of the Holder or its designee on the certificates reflecting the Warrant
Shares, and on the Company’s share register, by the Warrant Share Delivery Date or (ii) issue such Warrant Shares in the
name of the Holder or its designee in restricted book-entry form in the Company’s share register by the Warrant Share
Delivery Date and, in the case of (i), the Company shall deliver the original of such certificates reflecting the Warrant Shares
and the Company’s share register (certified by a director or an authorized person of the Transfer Agent) to the address of the
Holder or its designee as specified in the Notice of Exercise within [***] after the date of the Notice of Exercise. Upon
delivery of the Notice of Exercise, the Holder or its designee shall be deemed for all corporate purposes to have become the
holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of
delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (other than in the case of a cashless
exercise) is received within [***] following delivery of the Notice of Exercise. The Company agrees to maintain a transfer
agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable. If the Company
fails for any reason to deliver to the Holder or its designee the Warrant Shares subject to a Notice of Exercise by the Warrant
Share Delivery Date and such failure continues for [***] after the Warrant Share Delivery Date, the Company shall pay to
the Holder, in cash, as liquidated damages and not as a penalty, [***].
(ii)
To the extent permitted by law, the Company’s obligations to issue and deliver Warrant
Shares in accordance with and subject to the terms hereof are absolute and unconditional, irrespective of any action or
inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any
judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or
termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any
violation or alleged violation of law by the Holder or any other Person, and irrespective of any other circumstance that might
otherwise limit such obligation of the Company to the Holder in connection with the issuance of Warrant Shares. Nothing
herein shall limit the Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including,
without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely
deliver Warrant Shares; provided, however, that the Holder shall not be entitled to both (i) require the Company to reinstate
the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not timely honored and (ii)
receive the number of shares of Common Stock that would have been issued if the Company had timely complied with its
delivery requirements under Section 2(d)(i).
(iii)
Delivery of New Warrants Upon Partial Exercise. If this Warrant shall have been exercised
in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of
the Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased
Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.
(iv)
Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the
Holder or its designee the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder
will have the right to rescind such exercise by providing the Company with written notice of rescission.
(v)
No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares
shall be issued upon the exercise of this Warrant. As to any fraction of a share which the Holder or its designee would
otherwise be entitled to purchase upon such exercise, the Company shall, at

6
its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by
the Exercise Price or round up to the next whole share.
(vi)
Charges, Taxes and Expenses. Issuance and delivery of Warrant Shares shall be made
without charge to the Holder or its designee for any issue or transfer tax or other incidental expense in respect of the issuance
of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares shall be
issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that, in the
event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for
exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may
require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The
Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the
Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day
electronic delivery of the Warrant Shares.
(vii)
Closing of Books. The Company will not close its stockholder books or records in any
manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.
Section 3.
Certain Adjustments.
(a)
Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a
stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or
equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares
of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding shares of Common
Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common
Stock into a smaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital
stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be
the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of
which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the
number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise
Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective
immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and
shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.
(b)
Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at
any time while this Warrant is outstanding the Company grants, issues or sells any Common Stock Equivalents or rights to
purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock
(the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the
aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common
Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof) immediately
before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is
taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of
such Purchase Rights.
(c)
Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall
declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of
Common Stock, by way of return of capital or otherwise (including, without

7
limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off,
reclassification, corporate rearrangement, scheme of arrangement or other similar transaction), other than dividends,
distributions or grants subject to Section 3(a) or Section 3(b) above (a “Distribution”) or a reclassification as to which
Section 3(d) applies, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same
extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock
acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof) immediately before
the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record
holders of shares of Common Stock are to be determined for the participation in such Distribution.
(d)
Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company,
directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into
another Person other than a merger or consolidation in which the shares of capital stock of the Company outstanding
immediately prior to such merger or consolidation continue to represent, or are converted into or exchanged for shares of
capital stock or other equity interests that represent, immediately following such merger or consolidation, a majority by
voting power of the capital stock or other equity interests of the surviving or resulting corporation or entity or the parent
corporation or entity of such surviving or resulting corporation or entity, (ii) the Company or any Subsidiary, directly or
indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of
its assets of the Company and its Subsidiaries taken as a whole in one or a series of related transactions, (iii) any, direct or
indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to
which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property
and has been accepted by the holders of more than 50% of the outstanding Common Stock or more than 50% of the voting
power of the capital stock of the Company, (iv) the Company, directly or indirectly, in one or more related transactions
effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange
pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v)
the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or
other business combination (including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme of
arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of the
outstanding shares of Common Stock or more than 50% of the voting power of the capital stock of the Company (each a
“Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive,
for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such
Fundamental Transaction, at the option of the Holder, the number of shares of Common Stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate
Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common
Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction. For purposes of any such
exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration
based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental
Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner
reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are
given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be
given the same choice as to the Alternate Consideration it may receive upon any exercise of this Warrant following such
Fundamental Transaction. Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the
Company or any Successor Entity (as defined below) shall, at the Holder’s option, exercisable at any time concurrently with,
or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date of the public announcement
of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an amount of
cash equal to the Black Scholes Value (as defined

8
below) of the remaining unexercised portion of this Warrant on the date of the consummation of such Fundamental
Transaction; provided, however, that, if the Fundamental Transaction is not within the Company’s control, including not
approved by the Company’s Board of Directors, the Holder shall only be entitled to receive from the Company or any
Successor Entity the same type or form of consideration (and in the same proportion), at the Black Scholes Value of the
unexercised portion of this Warrant, that is being offered and paid to the holders of Common Stock of the Company in
connection with the Fundamental Transaction, whether that consideration be in the form of cash, stock or any combination
thereof, or whether the holders of Common Stock are given the choice to receive from among alternative forms of
consideration in connection with the Fundamental Transaction; provided, further, that if holders of Common Stock of the
Company are not offered or paid any consideration in such Fundamental Transaction, such holders of Common Stock will be
deemed to have received common stock of the Successor Entity (which Successor Entity may be the Company following
such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant
based on the Black Scholes Option Pricing Model obtained from the “OV” function on Bloomberg determined as of the day
of consummation of the applicable Fundamental Transaction for pricing purposes. The payment of the Black Scholes Value
will be made by wire transfer of immediately available funds (or such other consideration) within the later of (i) five
Business Days of the Holder’s election and (ii) the date of consummation of the Fundamental Transaction. The Company
shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor
Entity”) to assume in writing all of the obligations of the Company under this Warrant in accordance with the provisions of
this Section 3(d) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved
by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder,
deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument
substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of
capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and
receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such
Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital
stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction
and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the
purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental
Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such
Fundamental Transaction, the Successor Entity shall be added to the term “Company” under this Warrant (so that from and
after the occurrence or consummation of such Fundamental Transaction, each and every provision of this Warrant referring
to the “Company” shall refer instead to each of the Company and the Successor Entity or Successor Entities, jointly and
severally), and the Successor Entity or Successor Entities, jointly and severally with the Company, may exercise every right
and power of the Company prior thereto and the Successor Entity or Successor Entities shall assume all of the obligations of
the Company prior thereto under this Warrant with the same effect as if the Company and such Successor Entity or
Successor Entities, jointly and severally, had been named as the Company herein. For the avoidance of doubt, the Holder
shall be entitled to the benefits of the provisions of this Section 3(d) regardless of whether the Company has sufficient
authorized shares of Common Stock for the issuance of Warrant Shares.
(e)
Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest
1/100th of a share, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be
issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury
shares, if any) issued and outstanding.
(f)
Notice to Holder.

9
(i)
Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any
provision of this Section 3, the Company shall promptly deliver to the Holder by email a notice setting forth the Exercise
Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement
of the facts requiring such adjustment.
(ii)
Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any
other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash
dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the
Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D)
the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common
Stock, any consolidation or merger to which the Company (or any of its Subsidiaries) is a party, any sale or transfer of all or
substantially all of its assets, or any compulsory share exchange whereby the Common Stock is converted into other
securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or
winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder
at its last email address as it shall appear upon the Warrant Register of the Company, at least 10 calendar days prior to the
applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the
purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which
the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are
to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is
expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record
shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice or any
defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such
notice. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to
the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
Section 4.
Transfer of Warrant.
(a)
Transferability. Subject to Section 4(d) and Section 4(e) and compliance with applicable securities
laws, this Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole
or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a
written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or
attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if
required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or
assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall
issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly
be cancelled, and the Company shall, or will cause its Transfer Agent to, register the transfer of all or any portion of this
Warrant in the Warrant Register (as defined below). Notwithstanding anything herein to the contrary, the Holder shall not be
required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which
case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder
delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance
herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.
(b)
New Warrants. This Warrant may be divided or combined with other Warrants upon presentation
hereof at the aforesaid office of the Company, together with a written notice specifying

10
the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject
to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company
shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in
accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the Issue Date of this Warrant and
shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
(c)
Warrant Register. The Company shall register this Warrant, upon records to be maintained by the
Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The
Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any
exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.
(d)
Transfer Restrictions. The Holder, by its acceptance hereof, acknowledges and agrees that the
Company shall refuse to register any transfer of this Warrant not made in accordance with the provisions of Regulation S
promulgated under the Securities Act, pursuant to registration under the  Securities Act, or pursuant to an available
exemption from registration (including without limitation those under section 4(a)(2) of the Securities Act or Regulation D).
(e)
Representations of the Holder. The Holder, by its acceptance hereof, certifies that it is (i) not a U.S.
Person and is not acquiring this Warrant for the account or benefit of any U.S. Person or (ii) a U.S. Person who acquired this
Warrant in a transaction that did not require registration under the Securities Act. The Holder agrees to resell this Warrant
only in accordance with the provisions of Regulation S promulgated under the Securities Act, pursuant to registration under
the Securities Act, or pursuant to an available exemption from registration (including without limitation those under section
4(a)(2) of the Securities Act or Regulation D) and agrees not to engage in hedging transactions with regard to this Warrant
unless in compliance with the Securities Act.
Section 5.
Miscellaneous.
(a)
Rights as Stockholder; No Settlement in Cash. Notwithstanding anything in this Warrant to the
contrary and without prejudice to the rights and terms in Section 3, so long as this Warrant remains outstanding this Warrant
shall entitle the Holder to the same rights (other than voting rights) as the common stockholders of the Company prior to the
exercise hereof as set forth in Section 2(d)(i), including the rights to adjustments contemplated under Section 3 hereof,
dividend and distribution rights, participation rights, rights to receive written notice with respect to all stockholder meetings
of the Company together with information provided to the shareholders and attend such meetings in a non-voting capacity,
rights to receive any other statement, notice and circular issued to the Company’s stockholders concurrently with the issue of
the same, rights to participate in or receive payments from the Company in connection with liquidation, dissolution, or
winding up of the Company as if this Warrant had been fully exercised into Warrant Shares on the date hereof and the
Holder were a holder of shares of Common Stock from the date hereof, and rights to participate in or receive payments from
the Company in connection with a sale of the Company as set forth in Section 3(d) hereof.
Without limiting any rights of a Holder or its designee to receive Warrant Shares on a “cashless exercise” pursuant
to Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(v) herein, in no event shall the
Company be required to net cash settle an exercise of this Warrant.
(b)
Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock
certificate relating to the Warrant Shares, and in case of loss, theft

11
or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the
posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company
will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such
Warrant or stock certificate.
(c)
Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the
expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right
may be exercised on the next succeeding Business Day.
(d)
Authorized Shares. The Company covenants that, during the period the Warrant is outstanding, it
will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the
Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants that its
issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessary
Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable
action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed.
The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented
by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares
in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and
charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring
contemporaneously with such issue).
Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including,
without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms
and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this
Warrant against impairment (it being understood that this Warrant shall not in any case prevent the Company from effecting
any such amendment, reorganization, transfer, consolidation, merger, dissolution, issuance or sale, provided that the Holder’s
rights are not disproportionately adversely impacted). Without limiting the generality of the foregoing, the Company will (i)
not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to
such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly
and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially
reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having
jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.
Before taking any action which would result in an adjustment in the number of Warrant Shares for which this
Warrant is exercisable or in the Exercise Price, the Company shall use commercially reasonable efforts to obtain all such
authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies
having jurisdiction thereof.
(e)
Jurisdiction. This Warrant shall be governed by and interpreted in accordance with the laws of the
State of Delaware, excluding application of any conflict of laws principles that would require application of the law of a
jurisdiction outside of the State of Delaware. In the event of any conflict between U.S. and foreign laws, U.S. laws shall
govern.

12
(f)
Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this
Warrant, if not registered, will have restrictions upon resale imposed by state and federal securities laws.
(g)
Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right
hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or
remedies. Without limiting any other provision of this Warrant, if the Company fails to comply with any provision of this
Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be
sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of
appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of
its rights, powers or remedies hereunder.
(h)
Notices. Any and all notices or other communications or deliveries required or permitted to be
provided hereunder shall be in writing and shall be deemed given and effective on the earliest of: (a) the time of
transmission, if such notice or communication is delivered via email attachment at or prior to 5:30 p.m. (New York City
time) on a Trading Day, (b) the next Trading Day after the time of transmission, if such notice or communication is delivered
via email attachment on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c)
the second (2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service
or (d) upon actual receipt by the party to whom such notice is required to be given. Such notices and communications shall
to the party to which it is directed at its address shown below (or such other address as such party shall have last given by
notice to the other party):
If to Company, addressed to:
Aclaris Therapeutics, Inc.
701 Lee Road, Suite 103
Wayne, Pennsylvania 19087
United States of America
Attn: [***]
E-mail: [***]
If to the Holder, addressed to:
[●]
(i)
Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder
to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder,
shall give rise to any liability of the Holder for the purchase price of any Common Stock or as a stockholder of the Company,
whether such liability is asserted by the Company or by creditors of the Company.
(j)
Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that
monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of
this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at
law would be adequate.

13
(k)
Successors and Assigns. Notwithstanding anything in this Warrant to the contrary but subject to
compliance with applicable securities laws and with Section 4(a) hereof (if applicable), this Warrant and the rights and
obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the
Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the
benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.
Subject to the terms and conditions of this Warrant, this Warrant and/or the rights and obligations contained herein may be
transferred or assigned by the Holder to any of its Affiliates or any other third party without the consent from any other
Person.
(l)
Insider Trading Policy. The Company confirms that the Holder, solely by reason of being the holder
of this Warrant or the holder of shares of Common Stock when this Warrant has been exercised into Warrant Shares, will not
be subject to the Company’s current insider trading policy (the “Insider Trading Policy”), nor will the Company amend the
Insider Trading Policy in a manner that would result in the Holder being subject to the Insider Trading Policy solely by
reason of being the holder of this Warrant or the holder of shares of Common Stock into which this warrant may be
exercised, except as may be required by applicable law.
(m)
Amendment. This Warrant may be modified or amended or the provisions hereof waived with the
written consent of the Company and the Holder.
(n)
Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the
remainder of such provisions or the remaining provisions of this Warrant.
(o)
Headings. The headings used in this Warrant are for the convenience of reference only and shall not,
for any purpose, be deemed a part of this Warrant.
********************
(Signature Page Follows)

14
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly
authorized as of the date first above indicated.
ACLARIS THERAPEUTICS, INC.
By:
Name: Neal Walker
Title: Interim Chief Executive Officer

Exhibit 19.1
POLICY
POL-00048
PAGE:
1 of 9
EFFECTIVE DATE:
26 Feb 2025
INSIDER TRADING POLICY
INSIDER TRADING POLICY | 1
1.
PURPOSE
Aclaris Therapeutics, Inc. (together with its subsidiaries, the “Company”) has adopted this Insider Trading Policy (this
“Policy”) to prevent “insider trading”. Simply stated, insider trading occurs when a person uses “material non-public
information” (as defined in Section 3.2 below) to make decisions to trade a company’s securities or to communicate that
information to others who then trade the company’s securities or the securities of another publicly traded company.
Penalties for violating insider trading laws can be severe, both for individuals involved in such unlawful conduct and their
employers and supervisors, and may include fines and imprisonment, as well as disciplinary action by the Company. It is
your obligation to understand and comply with this Policy and avoid improper trading or disclosure of material non-public
information. Should you have any questions regarding this Policy, please contact the Company’s General Counsel.
2.
SCOPE
This Policy applies to all officers, directors and employees of the Company (collectively, “Covered Persons”). Please note
that the blackout periods, pre-clearance procedures and other trading restrictions identified in this Policy not only apply to
you as a Covered Person but also apply to transactions in Company Securities (as defined in Section 3.1.1 below) by your
family members that reside in your household as well as other persons that reside in your household, and to transactions by
any person or entity whose transactions in Company Securities are subject to your control or influence (such as family
members that do not reside with you who consult with you before they trade in Company securities). It is your
responsibility to ensure that any transaction in Company Securities by these persons and entities comply with this
Policy.
3.
POLICY
3.1.
General Policy
3.1.1.
No Covered Person who is in possession of material non-public information concerning the Company may, either
directly or indirectly, (i) purchase or sell securities of the Company, including common stock, options to purchase
common stock, preferred stock, convertible debt and warrants, or any other type of securities that the Company
has or may issue, as well as derivative securities that are not issued by the Company, such as exchange-traded put
or call options or swaps relating to any of the foregoing securities (collectively, “Company Securities”), or (ii)
engage in any other action, including the transfer of Company Securities by gift or donation to a family member,
trust or third party, to take advantage of such material non-public information.

POLICY
POL-00048
PAGE:
2 of 9
EFFECTIVE DATE:
26 Feb 2025
INSIDER TRADING POLICY | 2
3.1.2.
Covered Persons may not, either directly or indirectly, purchase or sell any securities of any other public company
when in possession of material non-public information concerning such other company that is obtained in
connection with his or her employment or service to the Company.
3.1.3.
Covered Persons may not disclose, convey or “tip” any material non-public information concerning the Company
or any other public company to any person by providing them with such information. Unlawful tipping includes
(but is not limited to) passing on material non- public information to friends, family members or acquaintances to
help the recipients of such information to make a profit or avoid a loss by trading in Company Securities or the
securities of other public companies based on such information. Because even a casual remark recommending a
purchase or sale of Company Securities could be misconstrued as being based upon material non-public
information, you should exercise caution in making any such recommendation. However, Covered Persons may
disclose material non-public information on a “need to know” basis to other officers, directors and employees of
the Company and to persons involved in the business or affairs of the Company that have a need to know such
information and who have entered into an agreement (or are otherwise bound) to maintain the confidentiality of
such information. When sharing material non-public information with permitted individuals, such information
should be confined to as small a group as possible.
3.1.4.
Any transactions by the Company in Company securities shall comply with applicable insider trading laws, rules
and regulations.
3.2.
Definition of Material Non-Public Information
3.2.1.
Material Information. Information is considered “material” if a reasonable investor would consider that
information important in making a decision to buy, hold or sell Company Securities or the securities of another
public company. Material information is not limited to historical facts but may also include projections and
forecasts. Any information that could be expected to affect a company’s stock price, whether it is positive or
negative, should be considered material. Determining whether information is material is not always
straightforward; rather, materiality is based on an assessment of all of the facts and circumstances, and is often
evaluated by enforcement authorities with the benefit of hindsight. When doubt exists as to whether information
would be considered “material,” the information should be presumed to be material. While it is not possible to
identify in advance all information that will be deemed to be material, some examples of such information would
include the following:
·
annual or quarterly financial statements;
·
earnings and other financial results and estimates;
·
changes to financial or operational guidance;
·
the status of the Company’s progress toward achieving significant Company goals;

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·
proposals, plans or agreements, even if preliminary in nature, involving mergers, acquisitions, joint ventures,
partnerships, strategic alliances, collaborations or investment proposals;
·
information concerning preclinical studies and clinical trials and their results;
·
significant actions by regulatory agencies or significant communications to or from regulatory agencies;
·
new product launches or the introduction of new business strategies;
·
discovery and development of new drug candidates;
·
new major contracts, customers, distributors or suppliers, or the loss of any of the foregoing;
·
information concerning patents and other intellectual property rights;
·
litigation (pending or threatened);
·
significant expansion or curtailment of operations;
·
unusual borrowings;
·
public or private securities offerings;
·
changes in senior management or members of the Board of Directors;
·
listing on or delisting from a stock exchange;
·
stock splits or reverse stock splits, dividends or changes in dividend policy;
·
possible tender offers or proxy fights;
·
significant writeoffs;
·
impending bankruptcy;
·
significant changes or developments in supplies or inventory, including significant product defects, recalls or
product returns;
·
significant manufacturing issues;
·
pricing changes or discount policies; and
·
similar information concerning a significant subsidiary, business unit or investment.
3.2.2.
Non-Public Information. Information that has not been widely disseminated to the public is generally considered
to be “non-public information”. Information generally becomes available to the public when it has been
disseminated in a manner designed to reach investors generally (such as by a press release or a filing with the
Securities and Exchange Commission (“SEC”)) and investors have been given the opportunity to absorb the
information fully. In general, information is considered to have been made available to the public at the beginning
of the trading day after two full trading days have elapsed after the formal release of the information. For example,
if an announcement of material information was made prior to the commencement of trading on Wednesday, then
the information is considered to have been made available to the public by the commencement of trading on
Friday.
3.2.2.1. If you are unsure whether you are in possession of material non-public information, you should consult with the
Clearing Officer (as defined in Section 3.4.1 below) prior to engaging in any transactions involving Company
Securities or securities of a public company with whom the Company has a direct or indirect business relationship.

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3.3.
Blackout Periods
3.3.1.
Quarterly Blackout Periods. In order to avoid the appearance of trading on material non- public information
concerning the Company’s financial results, Covered Persons (including their family members or other persons
that reside in their household, and any person or entity whose transactions in Company Securities are subject to
their control or influence) are prohibited from trading in Company Securities during the period beginning on the
23rd day of the last month of each fiscal quarter and ending on the beginning of the trading day after two full
trading days have elapsed following public disclosure of the financial results for that quarter or the full year.
Quarter
Blackout Period Begins
Blackout Period Ends
1
March 23
The beginning of the trading day after two full
trading days have elapsed after the Q1 financial
results are publicly released (typically, early
May)
2
June 23
The beginning of the trading day after two full
trading days have elapsed after the Q2 financial
results are publicly released (typically, early
August)
3
September 23
The beginning of the trading day after two full
trading days have elapsed after the Q3 financial
results are publicly released (typically, early
November)
4
December 23
The beginning of the trading day after two full
trading days have elapsed after annual financial
results are publicly released (typically, late
February)
3.3.2.
Other Blackout Periods. In addition, from time to time, the Company may impose special blackout periods on
Covered Persons if, in the judgment of the Chief Executive Officer, Chief Financial Officer or General Counsel, it
is likely that such person or persons have become aware of significant corporate developments that have not yet
been disclosed to the public, even when trading otherwise may be permitted. If certain Covered Persons become
subject to a special blackout period, such persons (including their family members or other persons that reside in
their household, and any person or entity whose transactions in Company Securities are subject to their control or
influence) are prohibited from (i) trading in Company Securities and (ii) without the consent of the Company,
disclosing to others the fact that they

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are subject to such special blackout period. These special blackout periods may vary in length and may or may not
be broadly communicated to all employees. Unless otherwise specified, the Company will re-open trading at the
beginning of the trading day after two full trading days have elapsed following the date of public disclosure of
such significant corporate developments.
3.3.3.
Hardship Exception. A Covered Person who has an unexpected and urgent need to sell Company Securities in
order to generate cash may, in appropriate circumstances, be permitted to sell Company Securities, including
during a blackout period. Hardship exceptions may be granted only by the Clearing Officer and must be requested
at least two business days in advance of the proposed trade. A hardship exception will not be granted if the
Clearing Officer concludes that the Covered Person may be in possession of material non-public information.
3.4.
Pre-Clearance Procedures and Advance Notice of Transactions
3.4.1.
To help prevent inadvertent violations of securities laws and this Policy, all Covered Persons must obtain prior
clearance from the General Counsel (or such person’s designee) (the “Clearing Officer”), before such Covered
Person (including their family members or other persons that reside in their household, and any person or entity
whose transactions in Company Securities are subject to their control or influence) makes any purchases or sales
of Company Securities or transfers Company Securities by gift or donation regardless of whether a blackout period
is then in effect. To obtain clearance for a transaction, submit via email the information contained in the Request
for Pre-clearance as set forth on Annex A attached hereto at least two business days in advance of the proposed
transaction. In evaluating each proposed transaction, the Clearing Officer will consult as necessary with counsel
and senior management before clearing any proposed trade. Clearance of a transaction will be valid for ten
business days, but may be shortened by the Company at its discretion. Even if a Covered Person has obtained pre-
clearance for a trade, it is the Covered Person’s responsibility to ensure he or she is not aware of material non-
public information at the time of effecting the trade.
3.4.2.
Covered Persons do not need to receive pre-clearance for trades pursuant to a 10b5-1 Trading Plan (as defined in
Section 3.6.1 below) but are required to obtain pre-clearance for entering into, modifying or terminating a 10b5-1
Trading Plan by submitting via email the information contained in the Request for Pre-clearance as set forth on
Annex A attached hereto at least two business days in advance of the proposed transaction.
3.4.3.
Officers, directors and all other employees who wish to purchase or sell Company Securities are strongly
encouraged to do so pursuant to a 10b5-1 Trading Plan.
3.4.4.
Advance notice of an intent to exercise an outstanding stock option shall be given to the Clearing Officer at least
two business days in advance.

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3.5.
Prohibited Transactions
3.5.1.
The Company considers it inappropriate for Covered Persons to engage short-term or speculative transactions in
Company Securities. In addition to the other restrictions set forth in this Policy, Covered Persons (including their
family members or other persons that reside in their household, and any person or entity whose transactions in
Company Securities are subject to their control or influence) are strictly prohibited from engaging in the following
transactions at any time:
·
trading in call or put options involving Company Securities and other derivative securities;
·
engaging in short sales of Company Securities;
·
holding Company Securities in a margin account or pledging Company Securities to secure margin or other
loans;
·
all forms of hedging or monetization transactions, such as zero-cost collars and forward sale contracts; and
·
any other inherently speculative transaction with respect to Company Securities.
3.5.2.
If you are unsure whether a transaction is prohibited under this Policy, you should consult with the General
Counsel prior to engaging in the transaction.
3.6.
Transactions Not Subject to the Policy
3.6.1.
The trading restrictions and pre-clearance procedures contained in this Policy do not apply to:
·
purchases or sales of Company Securities made pursuant to any binding contract, specific instruction or
written plan (a “10b5-1 Trading Plan”) established in good faith and entered into outside of a blackout period
and while the Covered Person was unaware of any material non-public information and which contract,
instruction or plan (i) meets all of the requirements of the affirmative defense provided by Rule 10b5-1
promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”), (ii) was pre-cleared in
advance pursuant to Section 3.4.2 of this Policy, (iii) allows for the cancellation of a transaction and/or
suspension of such 10b5-1 Trading Plan upon notice and request by the Company to the Covered Person if
any proposed trade fails to comply with applicable laws (e.g., exceeding the number of shares that may be
sold under Rule 144), and (iv) has not been amended or modified in any respect or terminated after such initial
pre-clearance without such amendment, modification or termination being pre-cleared in advance pursuant to
this Policy;
·
the purchase or sale of Company securities from or to the Company, as applicable (such as stock purchases
pursuant to a Company employee stock purchase plan); or

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·
transactions between Covered Persons and the Company with respect to grants under its equity plans,
including the exercise of stock options for cash, the vesting of restricted stock units (“RSUs”), or the exercise
of a tax withholding right pursuant to which a person has elected to have the Company withhold shares to
satisfy tax withholding upon the exercise of stock options or the vesting of RSUs.
3.6.2.
For purposes of clarity, restrictions contained in this Policy would apply to the “cashless exercise” of an option
effected through a broker or “same day sale” of an option, which generally entail the sale of a portion of the
underlying stock in the market to cover the costs of exercise or the resulting taxes. In addition, the subsequent sale
of the stock acquired upon the exercise of a stock option is subject to the restrictions contained in this Policy.
3.7.
Compliance with Section 16 and Rule 144
Covered Persons who are directors or executive officers are responsible for compliance with Section 16 of
the Exchange Act and Rule 144 of the Securities Act of 1933 in connection with their transactions in
Company Securities. The requirements of this Policy do not supersede the required compliance with your
obligations under Section 16 or Rule 144.
3.7.1.
Section 16 Reporting Obligations. Directors and executive officers should be aware that most transactions in
Company Securities are subject to two business day reporting requirements under Section 16(a) of the Exchange
Act. The Company’s policy is to assist directors and officers in completing and filing their individual Section 16
reports. It is important that the Company’s Compliance Coordinator (as defined in the Company’s Section 16
Compliance Program) receive prompt notice of reportable transactions, so that the Company can assist in filing the
required reports on a timely basis.
3.7.2.
Section 16 Trading Restrictions. Under Section 16(b) of the Exchange Act, any profit realized by an officer,
director or any stockholder owning more than 10% of a public company’s securities (“10% Holder”) on a “short-
swing” transaction (i.e., a non-exempt purchase and sale, or non-exempt sale and purchase, of the Company’s
equity securities within a period of less than six months) must be disgorged to the Company upon demand by the
Company or a stockholder acting on the Company’s behalf.
Under Section 16(c) of the Exchange Act, officers, directors and 10% Holders are prohibited from effecting “short
sales” of the Company’s equity securities. A “short sale” is one involving securities which the seller does not own
at the time of sale, or, if owned, are not delivered within 20 days after the sale or deposited in the mail or other
usual channels of transportation within five days after the sale.
3.7.3.
Rule 144. Directors and executive officers are required to file a Form 144 before making open market sales of
Company Securities. This form is generally prepared and filed by your broker.

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3.8.
Post-Employment Transactions
3.8.1.
The trading restrictions of this Policy apply to all Covered Persons who are aware of material non-public
information when they terminate employment or services. Such Covered Persons may not trade in Company
Securities until that information has become public or is no longer material. The pre-clearance procedures and
blackout periods set forth in this Policy will cease to apply to such Covered Person’s transactions in Company
Securities upon the termination of such person’s employment or services.
3.8.2.
Directors and executive officers should continue to provide prompt notice to the Compliance Coordinator of any
transactions in Company Securities that occur within six months of termination of service so that the Company can
assist in filing any required Section 16 reports on a timely basis.
3.9.
Consequences of Violations
3.9.1.
Insider trading violations are pursued vigorously by the SEC, U.S. Attorneys and state enforcement authorities as
well as the laws of foreign jurisdictions. Punishment for insider trading violations is severe and could include
significant fines and imprisonment. While the regulatory authorities concentrate their efforts on the individuals
who trade, or who tip inside information to others who trade, the federal securities laws also impose potential
liability on companies and other “controlling persons” within the organization if they fail to take reasonable steps
to prevent insider trading by company personnel.
3.9.2.
In addition, an individual’s failure to comply with this Policy may subject the individual to Company-imposed
sanctions, including dismissal for cause, whether or not the employee’s failure to comply results in a violation of
law.
3.10.
Administration of the Policy
3.10.1.
The Company’s General Counsel (and in such person’s absence, an employee designated by the General Counsel),
shall be responsible for administration of this Policy. All determinations and interpretations by the General
Counsel (or such person’s designee) shall be final and not subject to further review.
3.10.2.
Any person who has a question about this Policy or its application to any proposed transaction may obtain
additional guidance from the General Counsel.
4.
RELATED DOCUMENTS
4.1.
Annex A – Request for Pre-clearance

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Annex A
Request for Pre-clearance
To:
General Counsel
Name:
Title:
I hereby request clearance to execute the following transaction relating to the securities of Aclaris Therapeutics, Inc.
Type of Transaction:
☐
I wish to purchase shares of common stock. Number of shares of common stock to be purchased:
☐
I wish to sell shares of common stock. Number of shares of common stock to be sold:
☐
I wish to enter into a 10b5-1 Trading Plan
☐
Other:
If the request is for a transaction to be executed by a family member or other person that resides in my household, or a person or entity
whose transactions in Company Securities that are subject to my control or influence:
Name of Person:
Relationship:
I hereby represent that I am not aware of any material non-public information concerning Aclaris Therapeutics, Inc. or its subsidiaries at
the time of submitting this request and I agree that should I become aware of any material non-public information concerning Aclaris
Therapeutics, Inc. or its subsidiaries prior to consummating the approved transaction, I will not consummate such transaction.
I understand that once approved, the authorization is valid from the date of approval until the end of the tenth business day from the date
of the approval.
Signature
Date
Approved by:
General Counsel
Date

Exhibit 23.1
1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (Nos. 333-283942 and 333-
212095) and Form S-8 (Nos. 333-283506, 333-279169, 333-271718, 333-264813, 333-255922, 333-238079, 333-230614,
333-223922, 333-220149, 333-216703, 333-210379, and 333-207434) of Aclaris Therapeutics, Inc. of our report dated
February 27, 2025 relating to the financial statements, which appears in this Form 10-K.
/s/ PricewaterhouseCoopers LLP 
Philadelphia Pennsylvania
February 27, 2025

Exhibit 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER 

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Neal Walker, certify that:
1.    I have reviewed this annual report on Form 10-K of Aclaris Therapeutics, Inc. (the “registrant”);
2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
the period covered by this report;
3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in
this report;
4.    The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange
Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known
to us by others within those entities, particularly during the period in which this report is being prepared;
(b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles;
(c)  Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on
such evaluation; and
(d)  Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the
registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.    The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial
reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the
equivalent functions):
(a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;
and
(b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting.
Date: February 27, 2025
 
/s/ Neal Walker
Neal Walker
Chief Executive Officer
(principal executive officer)

Exhibit 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER 

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Kevin Balthaser, certify that:
1.    I have reviewed this annual report on Form 10-K of Aclaris Therapeutics, Inc. (the “registrant”);
2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
the period covered by this report;
3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in
this report;
4.    The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange
Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known
to us by others within those entities, particularly during the period in which this report is being prepared;
(b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles;
(c)  Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on
such evaluation; and
(d)  Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the
registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.    The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial
reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the
equivalent functions):
(a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;
and
(b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting.
Date: February 27, 2025
 
/s/ Kevin Balthaser
Kevin Balthaser
Chief Financial Officer
(principal financial officer and principal accounting officer)

Exhibit 32.1
CERTIFICATIONS OF
PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. §1350), Neal Walker, Chief Executive Officer of Aclaris
Therapeutics, Inc. (the “Company”), and Kevin Balthaser, Chief Financial Officer of the Company, each hereby certifies that, to the best
of his knowledge:
1.
The Company’s Annual Report on Form 10-K for the period ended December 31, 2024 (the “Annual Report”), to which this
Certification is attached as Exhibit 32.1, fully complies with the requirements of Section 13(a) or Section 15(d) of the
Exchange Act, and
2.
The information contained in the Annual Report fairly presents, in all material respects, the financial condition of the
Company as of the end of the period covered by the Annual Report and results of operations of the Company for the periods
covered by the Annual Report.
In Witness Whereof, the undersigned have set their hands hereto as of the 27th day of February 2025.
 
    
/s/ Neal Walker
/s/ Kevin Balthaser
Neal Walker
Kevin Balthaser
Chief Executive Officer
Chief Financial Officer
 
*  This certification accompanies the Form 10-K to which it relates, is not deemed filed with the Securities and Exchange Commission
and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the
Exchange Act (whether made before or after the date of the Form 10-K), irrespective of any general incorporation language contained
in such filing.