Protara Therapeutics, Inc. (TARA) Business

Item 1. Business.

Overview

We are a New York City based
clinical-stage biopharmaceutical company committed to advancing transformative therapies for the treatment of cancer and rare diseases.
We were founded on the principle of applying modern scientific, regulatory or manufacturing advancements to established mechanisms in
order to create new development opportunities. We prioritize creativity, integrity and tenacity to expedite our goal of bringing life-changing
therapies to people with limited treatment options.

Our portfolio includes two
development programs utilizing TARA-002, an investigational cell therapy based on the broad immunopotentiator, OK-432, which was originally
granted marketing approval by the Japanese Ministry of Health and Welfare as an immunopotentiating cancer therapeutic agent. This cell
therapy is currently approved in Japan and Taiwan for lymphatic malformations, or LMs, and multiple oncologic indications. We have secured
worldwide rights to the asset excluding Japan and Taiwan and are exploring its use in oncology and rare disease indications. TARA-002
was developed from the same master cell bank of genetically distinct group A Streptococcus pyogenes as OK-432 (marketed as Picibanil®
in Japan by Chugai Pharmaceutical Co., Ltd., or Chugai Pharmaceutical). We are currently developing TARA-002 in non-muscle invasive bladder
cancer, or NMIBC, and LMs. We are also pursuing IV Choline Chloride, an investigational phospholipid substrate replacement therapy, for
patients receiving parenteral support, or PS, which includes both nutrition and fluids.

Neither TARA-002 nor IV Choline
Chloride have been approved by the FDA or other comparable regulatory authorities for use for any indications. We have devoted substantial
efforts to the development of both TARA-002 and IV Choline Chloride and, to date, have not generated any revenues from product sales.
We do not expect to generate revenues in the near-term, and it is possible we may never generate revenues in the future. To finance our
current strategic plans, including the conduct of ongoing and future clinical trials and further research and development, we will need
to raise additional capital. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity
and Capital Resources” for additional information about our liquidity and capital resource needs.

TARA-002 in NMIBC

Our lead oncology program is
TARA-002 in NMIBC, which is cancer found in the tissue that lines the inner surface of the bladder that has not spread into the bladder
muscle. Bladder cancer is the sixth most common cancer in the U.S., with NMIBC representing approximately 80% of bladder cancer diagnoses.
Approximately 65,000 patients are diagnosed with NMIBC in the U.S. each year. Very few new therapeutics have been approved for NMIBC since
the 1990s and the current standard of care for NMIBC includes intravesical Bacillus Calmette-Guérin, or BCG.

Following the completion of our ADVANCED-1 and ADVANCED-1EXP trials
in October 2024 and September 2024, respectively, to evaluate safety, preliminary efficacy and the dosing of TARA-002, at the 40KE (Klinische
Einheit, or KE, is a German term indicating a specified weight of dried cells in vial) dose level, we initiated and are currently conducting
our ADVANCED-2 clinical trial. ADVANCED-2 is a Phase 2 open-label clinical trial evaluating intravesical TARA-002 in patients with high-grade
carcinoma in situ, or CIS. Cohort A of the Phase 2 trial has completed enrollment and enrolled 31 patients with CIS (± Ta/T1, with
Ta defined as non-invasive papillary carcinoma and T1 defined as carcinoma invading the lamina propria) who are either BCG-Naïve
or BCG-Exposed and who have not received intravesical BCG for at least 24 months prior to CIS diagnosis. Cohort B of the Phase 2 trial
is expected to enroll 75 to 100 patients with BCG-Unresponsive CIS (± Ta/T1) and is designed to be registrational based on the
FDA’s August 2024 Draft Guidance for Industry on BCG-Unresponsive Nonmuscle Invasive Bladder Cancer: Developing Drugs and Biological
Products for Treatment. Trial subjects in ADVANCED-2 receive an induction course, with or without a reinduction, of six weekly intravesical
instillations of TARA-002, followed by a maintenance course of three weekly instillations every three months.

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In February 2026, we presented
updated interim data from our ongoing Phase 2 open-label ADVANCED-2 trial reporting results that continue to support TARA-002’s
potential as a mainstay in the NMIBC treatment landscape and demonstrating meaningful and durable activity in BCG-Unresponsive and BCG-Naïve
NMIBC patients.

The dataset includes 43 BCG-Unresponsive
patients and 31 BCG-Naïve patients who received at least 1 dose of TARA-002; 35 BCG-Unresponsive patients and 29 BCG-Naïve patients
completed at least one response assessment and were evaluable for efficacy as of a January 28, 2026 data cutoff. Complete response, or
CR, rates at the six months and 12 months landmark time points include all participants who were either evaluable at that time point or
had experienced disease progression or treatment failure prior to the scheduled visit.

For the BCG-Unresponsive cohort,
the CR rate at any time was 65.7% (23/35). The CR rate was 68.2% (15/22) at six months and 33.3% (5/15) at 12 months. Among responders,
the Kaplan-Meier, or KM, estimated probability of maintaining a CR for six months was 71.1% (95% confidence interval, or CI: 46.7, 95.5),
and 100% (5/5) maintained their CR from nine to 12 months. Re-induction therapy successfully converted most initial non-responders to
responders with durable responses: 61.5% (8/13) of re-induced patients converted to a CR at six months.

For the BCG-Naïve cohort,
the CR rate at any time was 72.4% (21/29). The CR rate was 66.7% (18/27) at six months and 57.9% (11/19) at 12 months. Among responders,
the KM estimated probability of maintaining a CR for six months was 73.1% (95% CI: 52.9, 93.4), and 100% (11/11) maintained their CR from
nine to 12 months. Re-induction therapy successfully converted most initial non-responders to responders with durable responses: 66.7%
(4/6) of re-induced patients converted to a CR at six months.

The majority of treatment-related
adverse events, or TRAEs, were Grade 1 and transient with no Grade 3 or greater TRAEs and no related serious adverse events, or SAEs,
as assessed by study investigators. No patients discontinued treatment due to TRAEs. The most commonly occurring TRAEs were dysuria (14%),
bladder spasm (9%), fatigue (7%) and micturition urgency (5%).

We expect to complete enrollment
of the BCG-Unresponsive registrational cohort of the ADVANCED-2 trial in the second half of 2026. Enrollment is complete in the BCG-Naïve
cohort of the ADVANCED-2 trial with 31 patients. In December 2025, we announced the FDA had provided written feedback supporting a proposed
registrational design for a controlled trial in BCG-Naïve patients (who have never been exposed and those who have not received BCG
within the last 24 months and are ineligible to receive BCG or contraindicated, cannot tolerate BCG, do not have access to
BCG, or refuse BCG). The FDA has agreed that BCG is not required as a comparator and that intravesical chemotherapy is an acceptable comparator
to TARA-002 in BCG-Naïve patients. The FDA also is aligned with the primary endpoint of the trial as the CR rate at month 6 with
duration of response as a key secondary endpoint. We intend to initiate the ADVANCED-3 trial in the second half of 2026. We have engaged
the FDA to determine how to include BCG-Exposed patients in our clinical trials of TARA-002, for whom no FDA-approved treatments are available
and who have limited options to access investigational treatment through clinical trials.

In addition to our existing clinical
trials in NMIBC, we plan to continue to explore the anti-tumor activity related to the administration of TARA-002 via systemic administration.
We continue to believe that combination therapy may play a meaningful role in the NMIBC treatment paradigm and intend to evaluate TARA-002
in combination with other therapies. Given what we have observed to date of TARA-002’s mechanism of action and safety profile, we
believe it has strong potential as a combination agent, and we continue to evaluate potential combination therapy options for our clinical
program. We also continue to conduct non-clinical studies on TARA-002 to better characterize the mechanism of action to help us understand
how TARA-002 may perform in potential combinations with other agents used to treat NMIBC, and to help us define other cancer targets for
TARA-002, both within urothelial cancer and other types of cancer affecting different parts of the body.

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IV Choline Chloride for Patients
on PS

We are also pursuing IV Choline
Chloride, an investigational phospholipid substrate replacement therapy, for patients receiving PS which includes both nutrition and fluids.
Choline is a known important substrate for phospholipids that are critical for healthy liver function and also plays an important role
in modulating gene expression, cell membrane signaling, brain development, neurotransmission, muscle function and bone health. PS patients
are unable to synthesize choline from enteral nutrition sources, and there are currently no available PS formulations containing choline.
Every year in the U.S. there are approximately 90,000 people who require PS at home and of those approximately 30,000 are on long-term
PS. IV Choline Chloride has the potential to become the first FDA-approved IV choline formulation for PS patients.

An IV formulation of choline
is recommended for patients on parenteral nutrition, or PN, by the American Society for Parenteral and Enteral Nutrition, or ASPEN, in
their Recommendations for Changes in Commercially Available Parenteral Multivitamin and Multi–Trace Element Products, as well as
by the European Society for Clinical Nutrition and Metabolism, or ESPEN, in their Guideline on Home Parenteral Nutrition. IV Choline Chloride
has been granted Orphan Drug Designation, or ODD, by the FDA for the prevention and/or treatment of choline deficiency in patients on
long-term PN. The U.S. Patent and Trademark Office, or USPTO, has issued us a U.S. patent claiming a choline composition and a U.S. patent
claiming a method for treating choline deficiency with a choline composition, each with a term expiring in 2041.

In April 2024, we announced
alignment with the FDA on a registrational path forward for IV Choline Chloride. Previously, we had been pursuing an indication in intestinal
failure-associated liver disease, or IFALD, and following feedback from the FDA, are pursuing a broader indication as a source of choline
when oral or enteral nutrition is not possible, insufficient, or contraindicated. Feedback from the FDA on our IV Choline Chloride program
indicated that a single study with an endpoint of restoring choline levels in PS patients could serve as the basis for a regulatory submission
for IV Choline Chloride.

In September 2024, we presented
the results of THRIVE-1, a prospective, observational study evaluating the prevalence of choline deficiency and liver injury in patients
dependent on PS in the U.S., U.K. and Europe. The study found that 78% of patients who are dependent on PS were choline deficient, and
that 63% of choline deficient participants had liver dysfunction, including steatosis, cholestasis and hepatobiliary injury, underscoring
the need for IV Choline supplementation in this patient population.

In January 2026, we advanced
the development of IV Choline Chloride as a source of choline for adult and adolescent patients on long-term PS and initiated THRIVE-3,
a registrational Phase 3 clinical trial. THRIVE-3 is a seamless Phase 2b/3 trial with a dose confirmation portion (n=24) followed by a
double-blinded, randomized, placebo-controlled portion to assess the efficacy and safety of IV Choline Chloride over 24 weeks in adolescents
and adults on long-term PS when oral or enteral nutrition is not possible, insufficient, or contraindicated (n=100). The primary endpoint
of the clinical trial is a pharmacokinetic, or PK, endpoint measuring the change from baseline in plasma choline concentration. We also
plan to include a number of secondary endpoints related to liver, bone and memory. The FDA granted IV Choline Chloride Fast Track Designation,
or FTD, as a source of choline when oral or enteral nutrition is not possible, insufficient, or contraindicated.

TARA-002 in LMs

We are also pursuing
TARA-002 in macrocystic and mixed-cystic LMs, which are rare, non-malignant cysts of the lymphatic vascular system that primarily
form in the head and neck region of children before the age of two. In July 2020, the FDA granted Rare Pediatric Disease
Designation, or RPDD, for TARA-002 for the treatment of LMs and in May 2022 the European Commission granted
Orphan Medicinal Product Designation to TARA-002 for the treatment of LMs. In December 2025, the FDA granted both FDA Breakthrough
Therapy Designation, or BTD, and FTD for TARA-002 for the treatment of macrocystic and mixed cystic LMs in pediatric patients.
In addition to the clinical experience in Japan, we have secured the rights to a dataset from one of the largest ever conducted
Phase 2 trials in LMs, in which OK-432 was administered via a compassionate use program led by the University of Iowa to over 500
pediatric and adult patients. We have an open investigational new drug application, or IND, for TARA-002 in LMs with the Vaccines
and Related Products Division of the FDA, or Vaccines Division.

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In October 2023, we initiated
STARBORN-1, which is a Phase 2 single-arm, open-label, prospective clinical trial to evaluate the safety and efficacy of intracystic injection
of TARA-002 for the treatment of macrocystic and mixed-cystic LMs (≥ 50% macrocystic disease) in participants six months to less than
18 years of age in the U.S. Including an age de-escalation safety lead-in, the clinical trial will enroll approximately 30 patients who
will receive up to four injections of TARA-002 spaced approximately six weeks apart. The primary endpoint of the clinical trial is the
proportion of participants with macrocystic LMs and mixed-cystic LMs who demonstrated clinical success, defined as having either a CR
(90% to 100% reduction from baseline in total LM volume) or substantial response (60% to less than 90% reduction in total LM volume) as
measured by axial imaging.

In November 2025, we announced
interim results from our ongoing Phase 2 STARBORN-1 trial evaluating TARA-002 in pediatric patients with macrocystic and mixed cystic
LMs. As of the data cutoff date of November 12, 2025, 12 patients had received at least one dose of TARA-002. Of the eight patients who
were evaluable at the eight-week post-treatment assessment, 100% achieved clinical success. 88% of patients achieved clinical success
with just one or two doses of TARA-002. Among macrocystic patients, 83% (5/6) achieved a CR, and the only mixed cystic patient treated
also achieved a CR. Two patients who reached the 32-week post-treatment assessment remain disease-free.

The safety profile of TARA-002
in this trial has been favorable, with the majority of adverse events, or AEs, being mild to moderate in severity. No SAEs were reported.
The most common AEs were swelling and fatigue, and only one patient discontinued treatment due to a Grade 2 AE of fatigue.

These results underscore
the potential of TARA-002 to address an unmet need for pediatric patients with LMs, for whom there are currently no approved therapies.
Many patients currently rely on invasive surgical procedures or off-label use of chemotherapies and chemicals, which can be associated
with high complication rates and challenging side effects, particularly in pediatric populations.

Other Potential Opportunities

We believe TARA-002 may also
have the potential to be used to treat other maxillofacial cysts based on the historical literature from the TARA-002 predecessor, OK-432,
as well as recent data from the STARBORN-1 trial in which the one pediatric patient with a ranula achieved a CR after a single 1KE injection
of TARA-002. While completing STARBORN-1 in LMs is our priority, we believe there may be an opportunity in the future to explore the potential
of TARA-002 to treat different types of maxillofacial cysts.

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Our Product Candidate Pipeline

The following chart summarizes
the current status of our product candidate pipeline:

Our Corporate Strategy:

We are an oncology and rare
disease company focused on applying modern scientific advancements to established mechanisms to deliver efficient de-risked clinical programs.
Leveraging the drug development experience of our management team, our goal is to build a leading biopharmaceutical company focused on
bringing life-saving therapies to patients with significant unmet needs. Our current key initiatives are listed below:

1. Progress the registrational clinical
trial of TARA-002 for the treatment of BCG-Unresponsive NMIBC

Complete enrollment of ADVANCED-2
Cohort B in BCG-Unresponsive NMIBC patients with CIS.

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2. Initiate ADVANCED-3 registrational clinical
trial of TARA-002 for the treatment of BCG-Naïve NMIBC

Complete the BCG-Naïve cohort of ADVANCED-2 for patients with
CIS and initiate the registrational ADVANCED-3 trial evaluating TARA-002 in patients with BCG-Naïve NMIBC.

3. Progress the registrational seamless
Phase 2b/3 trial evaluating IV Choline Chloride in patients receiving PS

Progress THRIVE-3, a seamless
Phase 2b/3 trial assessing the efficacy and safety of low and high dose IV Choline Chloride in adolescent and adult patients receiving
long-term PS when oral or enteral nutrition is not possible, insufficient, or contraindicated.

4. Progress the Phase 2 clinical trial of
TARA-002 in patients with macrocystic and mixed-cystic LMs; confirm with FDA the registrational pathway for TARA-002 in LMs

We initiated the STARBORN-1
Phase 2 trial evaluating TARA-002 in pediatric patients with macrocystic and mixed-cystic LMs and expect to complete enrollment of the
trial in the second half of 2026. In addition, we expect to meet with the FDA to determine the registrational path forward for TARA-002
in LMs in the first half of 2026.

5. Build our operational capabilities to
successfully commercialize our oncology and rare disease programs

As we approach regulatory
filings and possible approvals of our oncology and rare disease investigational therapies, we intend to build our commercial infrastructure
to successfully launch and commercialize our products in key geographies where we can maximize value. Across the rare disease populations
(LMs and patients on PS) as well as bladder cancer, a high volume of patients are concentrated in a small number of centers of excellence.
We believe this concentration of treatment centers will potentially enable us to efficiently cover our addressable market with a relatively
small commercial footprint. Across our rare disease programs, there is significant unmet need and no available FDA-approved therapies
to meet the needs of these patients currently. In NMIBC, there is also a significant unmet need, and we believe TARA-002’s important
attributes, such as fast, simple administration by a nurse with no cumbersome additional steps or required safety protocols and a favorable
tolerability profile, will position the potential therapy favorably with patients and physicians versus other treatment options.

Our Pipeline

TARA-002

TARA-002, our lead program, is
an investigational cell therapy developed from the master cell line of the same genetically distinct Streptococcus pyogenes (group A,
type 3) Su strain as OK-432, a broad immunopotentiator marketed as Picibanil® in Japan by Chugai Pharmaceutical. We are using the
same regulatory starting materials as OK-432 and manufacture TARA-002 using an updated version of the same proprietary processes used
to manufacture OK-432. We have designated this product candidate as TARA-002 in order to differentiate the regulatory path in the U.S.
and other geographies from that of OK-432 in Japan.

We entered into an agreement
with Chugai Pharmaceutical in June 2019, as amended in July 2020, to support our development of TARA-002. The agreement provides us with
exclusive access to certain materials and documents relating to OK-432 including the master cell bank of Streptococcus pyogenes used in
the manufacturing of OK-432. Additionally, the agreement provides technical support during a certain period. We have utilized the materials,
proprietary manufacturing process and technical support provided by Chugai Pharmaceutical to support a contract development and manufacturing
organization, or CDMO, in the production of TARA-002 at a current Good Manufacturing Practices, or cGMP, compliant facility in the U.S.
Under the agreement with Chugai Pharmaceutical, we have sole responsibility for the development and commercialization of TARA-002 worldwide,
excluding Japan and Taiwan. This agreement is exclusive through June 17, 2030, or following any termination of the agreement by either
party.

In Japan, OK-432 is indicated
for: the treatment of lymphangiomas (LMs); the prolongation of survival time in patients with gastric cancer (postoperative cases) or
primary lung cancer in combination with chemotherapy; and the reduction of cancerous pleural effusion or ascites in patients with lung
cancer or gastrointestinal cancer respectively, head and neck cancer (maxillary cancer, laryngeal cancer, pharyngeal cancer, and tongue
cancer) and thyroid cancer that are resistant to other drugs.

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We are developing TARA-002 for
the treatment of NMIBC and LMs initially in the U.S., and plan to also seek approval in other regions in the future and may also explore
additional indications where its utility as an immunopotentiator has been hypothesized to be of therapeutic benefit.

TARA-002 in NMIBC

Disease Overview

Bladder cancer is the sixth most
common cancer in the U.S., with NMIBC representing approximately 80% of bladder cancer diagnoses. NMIBC is cancer found in the tissue
that lines the inner surface of the bladder that has not spread into the bladder muscle. There are three subtypes of NMIBC: Ta, CIS, and
T1. Among the types of NMIBC, Ta accounts for most NMIBC cases (70%), whereas T1 and CIS account for 20% and 10%, respectively.

There are approximately 65,000
incidents of NMIBC in the U.S. every year, and based upon currently available data we believe that approximately 45% (approximately 30,000)
are made up of high-grade tumor types that are considered higher risk, and therefore candidates for immunotherapies, such as TARA-002.
In addition, NMIBC has one of the highest rates of recurrence with the five-year rate estimated at up to 70%.

Treatment

Treatment for NMIBC is typically
targeted to reduce unresectable persistence, recurrence after resection and to prevent disease progression to muscle-invasive bladder
cancer. The initial treatment for NMIBC includes cystoscopy and complete transurethral resection of the bladder tumor, or TURBT, for papillary
Ta or T1, or biopsy for CIS. A single postoperative instillation of intravesical chemotherapy is recommended in patients with low risk
of progression, and for patients with intermediate and high-risk disease, a longer course of intravesical therapy is administered. The
most efficacious intravesical agent to date has been BCG, a live attenuated form of Mycobacterium bovis. BCG has been the subject
of multiple supply shortages in the U.S. in the past decade due to the inability to meet demand to treat the large population of patients
with NMIBC. There has been a significant increase in bladder cancer recurrence and progression with an escalated number of patients who
require cystectomy. As such, with the current BCG shortage and limited effective alternate therapies or dosing strategies, there continues
to be a significant unmet need for treatment options for patients with NMIBC.

Clinical Development

Following the completion
of our ADVANCED-1 and ADVANCED-1EXP trials in October 2024 and September 2024, respectively, to evaluate safety, preliminary efficacy
and the dosing of TARA-002, at the 40KE dose level, we initiated and are currently conducting our ADVANCED-2 clinical trial. ADVANCED-2
is a Phase 2 open-label clinical trial evaluating intravesical TARA-002 in patients with high-grade CIS. Cohort A of the Phase 2 trial
has completed enrollment and enrolled 31 patients with CIS (± Ta/T1) who are either BCG-Naïve or BCG-Exposed and who have
not received intravesical BCG for at least 24 months prior to CIS diagnosis. Cohort B of the Phase 2 trial is expected to enroll 75 to
100 patients with BCG-Unresponsive CIS (± Ta/T1) and is designed to be registrational based on the FDA’s August 2024 Draft
Guidance for Industry on BCG-Unresponsive Nonmuscle Invasive Bladder Cancer: Developing Drugs and Biological Products for Treatment. Trial
subjects in ADVANCED-2 receive an induction course, with or without a reinduction, of six weekly intravesical instillations of TARA-002,
followed by a maintenance course of three weekly instillations every three months.

In April 2025, we presented interim
data from our ADVANCED-2 trial with an April 16, 2025 data cutoff. The BCG-Unresponsive dataset included a total of five patients, all
of whom were six- and nine-month evaluable, and three of whom were evaluable at 12 months. The CR rate at any time in BCG-Unresponsive
patients was 100% (5/5). The CR rate in BCG-Unresponsive patients was 100% (5/5) at six months, 80% (4/5) at nine months, and 67% (2/3)
at 12 months.

The BCG-Naïve dataset
included a total of 21 patients, including 16 evaluable at six months, eight at nine months, and seven at 12 months. The CR rate at any
time in BCG-Naïve patients was 76% (16/21). The CR rate in BCG-Naïve patients was 63% (10/16) at six months, 63% (5/8) at nine
months, and 43% (3/7) at 12 months.

The majority of AEs were Grade
1 and transient with no Grade 3 or greater TRAEs, as assessed by study investigators. No patients discontinued treatment due to TRAEs.
The most common AEs were in line with typical responses to bacterial immunopotentiation, such as flu-like symptoms. The most common urinary
symptoms reflect urinary tract instrumentation effects, such as bladder spasm, burning sensation and urinary tract infection. Most bladder
irritations resolved shortly after administration or within a few hours to a few days.

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In December 2025, we presented
updated interim data from our ADVANCED-2 trial of TARA-002 in BCG-Naïve patients. The dataset included 31 BCG-Naïve patients
who received at least one dose of TARA-002; 29 patients completed at least one response assessment and were evaluable for efficacy as
of a November 7, 2025 data cutoff. CR rates at the six months and 12 months landmark time points include all participants who were either
evaluable at that time point or had experienced disease progression or treatment failure prior to the scheduled visit. The CR rate at
any time was 72% (21/29). The CR rate was 69% (18/26) at six months and 50% (7/14) at 12 months. Among initial responders, 88% (14/16)
maintained their response through six months and 100% (3/3) through 12 months. Re-induction therapy successfully salvaged most initial
nonresponders, resulting in high conversion rates and durable responses: 80% (4/5) of re-induced patients converted to a CR at 6 months,
and 100% (4/4) of those responders maintained their CR at 12 months.

The majority of TRAEs were
Grade 1 and transient with no Grade 3 or greater TRAEs as assessed by study investigators. No patients discontinued treatment due to TRAEs.
The most commonly occurring TRAEs were dysuria (13%), fatigue (13%) and hematuria (6%).

In February 2026, we presented updated interim data from our ADVANCED-2
trial, reporting results that continue to support TARA-002.

The dataset includes 43 BCG-Unresponsive
patients and 31 BCG-Naïve patients who received at least one dose of TARA-002; 35 BCG-Unresponsive patients and 29 BCG-Naïve
patients completed at least one response assessment and were evaluable for efficacy as of a January 28, 2026 data cutoff. CR rates at
the six months and 12 months landmark time points include all participants who were either evaluable at that time point or had experienced
disease progression or treatment failure prior to the scheduled visit.

For the BCG-Unresponsive cohort,
the CR rate at any time was 65.7% (23/35). The CR rate was 68.2% (15/22) at six months and 33.3% (5/15) at 12 months. Among responders,
the KM estimated probability of maintaining a CR for six months was 71.1% (95% CI: 46.7, 95.5), and 100% (5/5) maintained their CR from
nine to 12 months. Re-induction therapy successfully converted most initial non-responders to responders with durable responses: 61.5%
(8/13) of re-induced patients converted to a CR at six months.

For the BCG-Naïve cohort,
the CR rate at any time was 72.4% (21/29). The CR rate was 66.7% (18/27) at six months and 57.9% (11/19) at 12 months. Among responders,
the KM estimated probability of maintaining a CR for six months was 73.1% (95% CI: 52.9, 93.4), and 100% (11/11) maintained their CR from
nine to 12 months. Re-induction therapy successfully converted most initial non-responders to responders with durable responses: 66.7%
(4/6) of re-induced patients converted to a CR at six months.

The majority of TRAEs were Grade
1 and transient with no Grade 3 or greater TRAEs and no related SAEs as assessed by study investigators. No patients discontinued treatment
due to TRAEs. The most commonly occurring TRAEs were dysuria (14%), bladder spasm (9%), fatigue (7%) and micturition urgency (5%).

In December 2025, we announced
that the FDA has provided written feedback supporting a proposed registrational design for a controlled trial in BCG-Naïve patients
(who have never been exposed and those who have not received BCG within the last 24 months and are ineligible to receive BCG or contraindicated,
cannot tolerate BCG, do not have access to BCG, or refuse BCG). The FDA has agreed that BCG is not required as a comparator and that intravesical
chemotherapy is an acceptable comparator to TARA-002 in BCG-Naïve patients. The FDA also is aligned with the primary endpoint of
the trial as the CR rate at month six with duration of response as a key secondary endpoint. We intend to initiate this registrational
clinical trial in the second half of 2026. We have engaged the FDA to determine how to include BCG-Exposed patients in our clinical trials
of TARA-002, for whom no FDA-approved treatments are available and who have limited options to access investigational treatment through
clinical trials.

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Non-clinical Development

We continue to conduct non-clinical
studies on TARA-002 to better characterize the mechanism of action to help us understand how TARA-002 may perform in potential combinations
with other agents used to treat NMIBC. We have completed non-clinical studies comparing TARA-002 to BCG. Mechanistically, TARA-002 and
BCG are similar in that they are both intravesically administered broad-spectrum immune potentiators that drive a TH-1 pro-inflammatory
response and have a preference to M1 polarization. We found several important differences when we compared the two agents in non-clinical
studies that we believe make TARA-002 a potentially compelling new therapy. We found that TARA-002 is a NOD2/TLR 2 agonist (NOD2 is defined
as Nucleotide-binding oligomerization domain 2; TLR 2 is defined as toll-like receptor 2) and BCG is a toll-like receptor 4, or TLR4,
agonist. When we compared TARA-002 directly to BCG, in a cytotoxicity assay, we found that TARA-002 resulted in significantly stronger
tumor cell killing compared to BCG. We also found that TARA-002 resulted in significantly higher upregulation of key pro-inflammatory
cytokines and chemokines, including tumor necrosis factor alpha, or TNF-α, and interferon gamma, or interferon-γ. We also
observed that TARA-002 meaningfully down-regulated Interleukin-8, or IL-8, which at prolonged elevations is thought to increase risk for
tumor recurrence in bladder cancer after BCG therapy.

The approved indications
for OK-432 in Japan are based on systemic administration of the drug. There is a significant existing safety database with this route
of administration for OK-432 in Japan. In addition, we have completed subcutaneous systemic toxicology studies of TARA-002 and we are
considering a proof-of-concept study exploring systemic administration of TARA-002.

Regulatory Interactions

In October 2021, we announced
that the Office of Tissues and Advanced Therapies Division, now referred to as the Office of Therapeutic Products, of the FDA’s
Center for Biologics Evaluation and Research, or CBER, cleared our IND for TARA-002 in NMIBC.

Manufacturing

TARA-002 is manufactured using
an equivalent, but modernized, proprietary manufacturing process as is used to produce OK-432 by Chugai Pharmaceutical. We propagated
a master cell bank using the same master cell line of the genetically distinct strain of Streptococcus pyogenes (A group, type 3) Su strain
as OK-432. The bacteria is rendered inactive during the manufacturing process, consistent with the process used for OK-432. We have contracted
a cGMP compliant CDMO to manufacture TARA-002 in the U.S.

IV Choline Chloride for PS Patients

IV Choline Chloride is an
IV substrate therapy in development for patients receiving PS.

Choline is a known important
substrate for phospholipids, a source of methyl groups needed for many steps in metabolism and plays important roles in modulating gene
expression, cell membrane signaling, lipid transport, metabolism, liver health, brain development, neurotransmission, muscle function
and bone health. The only way to reliably replenish choline is through exogenous consumption. Patients receiving PS cannot sufficiently
absorb adequate levels of choline and available PS components do not contain sufficient amounts of choline to correct this deficit. The
use of choline for PS patients is included in key professional medical society recommendations, including ASPEN. IV Choline Chloride has
been granted ODD by the FDA for the prevention and/or treatment of choline deficiency in patients on long-term PN. The FDA granted IV
Choline Chloride FTD as a source of choline when oral or enteral nutrition is not possible, insufficient, or contraindicated.

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We have entered into a license
agreement with Dr. Alan Buchman for exclusive rights to the IND, ODD and other regulatory assets related to IV Choline Chloride, as well
as exclusive rights to the data from previously conducted Phase 1 and Phase 2 clinical trials led by Dr. Buchman.

The results of Dr. Buchman’s
randomized, controlled, Phase 2 clinical trial demonstrated that treatment with IV Choline Chloride resulted in normalization of plasma-free
choline concentrations, improvement of hepatic steatosis, and statistically significant improvement in cholestasis in patients dependent
on PS.

Disease Overview

PN typically consists of
carbohydrate (typically derived from dextrose), fat (lipid emulsion with essential fatty acids), protein (in the form of a balanced free
amino acid solution), electrolytes, trace elements, and most vitamins and essential nutrients known to be required by the human body,
with the notable exception of choline. PS is a medical treatment, representing PN plus fluids and is used to manage and treat malnourishment
and is indicated when there is impaired gastrointestinal function and contraindications to enteral nutrition. ASPEN and the Academy of
Nutrition and Dietetics’ Dietitians in Nutrition Support both recommend that choline be required in PN products (Vanek et al., 2012);
however, there are currently no FDA-approved intravenous choline chloride products. Humans can produce choline endogenously in the liver,
but the amount that the body naturally synthesizes is not sufficient to meet human needs, making it an essential nutrient. As a result,
humans must obtain choline from their diets. The development of IV Choline Chloride is intended to provide a source of choline when oral
or enteral nutrition is not possible, insufficient, or contraindicated.

Clinical Development

In Dr. Buchman’s Phase
2 randomized, double-blind, controlled 24-week clinical trial, patients (n=15) receiving nightly PN for 85% of their nutritional
needs (for at least 12 weeks prior to entry) were randomized to receive via IV infusion (10-12 hours) their usual PN with placebo (n =
8), or PN to which 2g IV Choline Chloride was added (n = 7).

In the IV Choline Chloride
group, mean choline levels were within or greater than the estimated normal range (i.e., 6.7 to 26.9 nmol/mL) throughout the 24-week trial
and quickly returned to baseline levels when treatment was discontinued.

In September 2024, we presented
the results of THRIVE-1, a prospective, observational study evaluating the prevalence of choline deficiency and liver injury in patients
dependent on PS in the U.S., U.K. and Europe. The study found that 78% of patients who are dependent on PS were choline deficient, and
that 63% of choline deficient participants had liver dysfunction, including steatosis, cholestasis and hepatobiliary injury, underscoring
the need for IV Choline supplementation in this patient population.

In January 2026, we advanced
the development of IV Choline Chloride as a source of choline for adult and adolescent patients on long-term PS and initiated THRIVE-3.
THRIVE-3 is a seamless Phase 2b/3 trial with a dose confirmation portion (n=24) followed by a double-blinded, randomized, placebo-controlled
portion to assess the efficacy and safety of IV Choline Chloride over 24 weeks in adolescents and adults on long-term PS when oral or
enteral nutrition is not possible, insufficient, or contraindicated (n=100). The primary endpoint of the clinical trial is a PK endpoint
measuring the change from baseline in plasma choline concentration. We also plan to include a number of secondary endpoints related to
liver, bone and memory.

In addition to the studies performed by Dr. Buchman,
we have completed a number of preclinical in vitro and non-clinical pharmacology studies for IV Choline Chloride.

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Regulatory Interactions

IV Choline Chloride has been
granted ODD by the FDA for the prevention and/or treatment of choline deficiency in patients on long-term PN.

In April 2024, we announced
alignment with the FDA on a registrational path forward for IV Choline Chloride.

In October 2024, the FDA
granted FTD to IV Choline Chloride as a source of choline when oral or enteral nutrition is not possible, insufficient, or contraindicated.

Manufacturing

Our end-to-end manufacturing
of IV Choline Chloride is conducted in the U.S. by a cGMP compliant CDMO.

TARA-002 in LMs

Disease Overview

The International Society
for the Study of Vascular Anomalies classifies LMs as either macrocystic, microcystic, or mixed-cystic. Macrocystic and microcystic LMs
are differentiated by the size of the fluid-containing portion of the malformation. Macrocystic LMs are characteristically large, fluid-filled
cysts with a thin endothelial lining. Macrocystic LMs are composed of cysts greater than 2 cubic centimeters in size and present as a
soft, fluid-filled swelling beneath normal or slightly discolored skin. Macrocystic LMs are usually located in the antero-lateral cervical
region of the neck; however, it is possible for this type of LM to originate in other areas of the body. In contrast, microcystic LMs
have very limited internal space with a thick irregular endothelial lining. Microcystic LMs are comprised of cysts less than 2 cubic centimeters
in size and are often composed of micro-lymphatic channels that integrate and infiltrate normal soft tissue. Microcystic LMs can involve
both superficial and deep aspects including muscle and bone. Microcystic LMs can thicken or swell causing enlargement of surrounding soft
tissue and bones and can be found on any area of the skin or mucous membrane. Mixed-cystic LMs are comprised of varying degrees of both
macrocystic and microcystic LMs.

While the exact prevalence of
LMs is not known, in the U.S., the condition is thought to be present in approximately one in every 4,000 live births and we believe there
are approximately 1,400-1,800 LM cases per year.

Treatment

We are not aware of any approved
pharmacotherapies for LMs, except in Japan and Taiwan where OK-432 is approved. In Japan, for example, OK-432 has been the standard of
care for LMs for over 25 years.

Treatment of LMs varies depending
on the symptoms and complications that present themselves. The standard of care outside Japan for the treatment of LMs is either a partial
or complete surgical excision of the cysts. While surgery is the standard approach to the treatment of LMs in the head and neck, the region
is a difficult area to operate on because of the large number of important anatomical structures in the area. Major venous and arterial
trunks travel through the neck, as do important nerves. Surgery on such malformations frequently results in high rates of recurrence and
complications including life-long chronic conditions, such as damage to nerves and other important structures of the head and neck.

Clinical Development

Historical Data on OK-432, predecessor therapy
to TARA-002

When TARA-002 is administered,
it is hypothesized that innate and adaptive immune cells within the cyst or tumor are activated and produce a strong immune cascade. Neutrophils,
monocytes, and lymphocytes infiltrate the abnormal cells and various cytokines, including interleukins IL-2, IL-6, IL-10, IL-12, interferon-γ,
and TNF-α are secreted by immune cells to induce a strong inflammatory reaction and destroy the abnormal cells. In concert, these
immune activities induce a strong local inflammatory reaction in the cyst wall, resulting in fluid drainage, shrinkage and fibrotic adhesion
of the cyst.

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A randomized, Phase 2 clinical
trial led by the University of Iowa studied the use of OK-432 in patients with LMs from 1998 to 2005. Most eligible subjects were between
six months and 18 years of age with macrocystic or mixed-cystic LMs (with ≥ 50% macrocystic disease) of the head and/or neck. There
were three treatment groups: immediate treatment, or ITG, delayed treatment, or DTG, and open label treatment group. The ITG received
treatment with OK-432 upon diagnosis. The DTG received OK-432 treatment following a six-month observation period; the cross-over design
was intended to investigate spontaneous resolution. The open-label treatment group included infants younger than six months of age, adults
older than 18 years of age, patients with LMs involving sites other than the head and neck (such as the axilla, thorax and extremities),
and patients treated on an emergent basis. The open label treatment group were treated immediately with OK-432. Response to therapy was
measured by quantitating change in lesion size. Clinical success was defined as a complete (90% to 100%) or substantial (60% to 89%) response
to treatment based on radiographically confirmed shrinkage in lesions.

The study results were based
on a retrospective analysis of source verified data that included the full dataset of subjects enrolled in the Phase 2 randomized clinical
trial between January 1998 and August 2005, including data in the published study (Smith et al. 2009) that included subjects enrolled
between January 1998 and November 2004.

Overall, 310 subjects were enrolled
with intent to treat: 246 subjects were randomized to the immediate (ITG, N=171) and delayed (DTG, N=75) treatment groups; 64 subjects
were nonrandomized and assigned to the open-label group. Analysis of the primary efficacy endpoint (N=150) demonstrated clinical success
(complete and/or substantial response) in 69% of patients in the ITG 6 months after enrollment, while 7.5% of patients in the DTG experienced
spontaneous regression of a LM during this time interval (p 0.0001). When the results were analyzed by lesion type across all treatment
groups, a successful outcome was observed in 84% and 60% of patients with macrocystic and mixed-cystic LMs, respectively. None of the
patients with microcystic LMs demonstrated clinical success with OK-432 therapy. The results of the retrospective analysis were consistent
with the results observed in the original analysis (Smith et al. 2009).

Figure 1: 69% of patients
in the ITG had a complete or substantial response to OK-432, meeting the primary endpoint, while 7.5% of patients in the DTG had a complete
or substantial response after six months of observation and before treatment.

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Figure 2: patients with radiographically
confirmed macrocystic lesions had the greatest likelihood of clinical success and in those patients with mixed lesions, clinical success
was also present.

TARA-002 Clinical Development

We have an open IND for LMs with
the FDA’s Vaccines Division. In October 2023, we initiated the STARBORN-1 trial, a Phase 2 single arm, open-label clinical trial
to evaluate the safety and efficacy of TARA-002 in approximately 30 pediatric patients ages six months to less than 18 years old with
macrocystic and mixed-cystic LMs. The clinical trial design includes a safety lead-in phase followed by an expansion phase. The primary
endpoint of the clinical trial is the proportion of participants with macrocystic and mixed cystic LMs who demonstrate clinical success,
defined as having either a CR (90% to 100% reduction from baseline in total LM volume) or substantial response (60% to less than 90% reduction
in total LM volume) as measured by axial imaging.

In November 2025, we announced
interim results from our ongoing Phase 2 open-label STARBORN-1 trial. The interim analysis included a total of 12 patients who enrolled
in the trial and received ≥ one dose of TARA-002 as of the November 12, 2025 data cutoff. Of those, eight patients were evaluable at
an eight-week post-treatment assessment, two withdrew prior to the eight-week assessment and two remain in dosing. Patients receive up
to four injections of TARA-002 spaced approximately six weeks apart. Of the eight patients who were evaluable, the majority (7/8) achieved
clinical success with one or two doses. Only one patient, who presented with a 1,739 mL macrocystic LM, required all four doses, and achieved
a CR.

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Overall, 80% (8/10) of patients
that completed treatment achieved clinical success and 100% (8/8) of patients who completed the eight-week response assessment achieved
clinical success. 83% (5/6) of macrocystic patients achieved a CR (90% to 100% reduction in total LM volume) and one patient achieved
a substantial response (60% to less than 90% reduction in total LM volume). The only mixed cystic patient treated achieved a CR.

Two LMs patients in the interim
analysis reached the 32-week post-treatment assessment and remain disease-free. One patient deemed a CR was subsequently diagnosed with
a ranula (a different type of maxillofacial cyst from LMs). Two patients withdrew before the eight-week post-treatment assessment, including
one patient who was misdiagnosed and had a rare form of cancer and did not respond to treatment and one patient who dropped out after
achieving a notable resolution of their macrocystic LM. The patient received two doses of TARA-002 with 160 mL aspiration at the first
dose, which was reduced to a 10 mL aspiration at the second dose.

The majority of AEs were
mild to moderate, with no serious AEs reported. The most common AEs were swelling and fatigue. One patient discontinued treatment due
to a Grade 2 AE of fatigue.

Historical Safety Profile on OK-432, predecessor
therapy to TARA-002

The most common AEs with
treatment with OK-432 were local injection site reactions, fever, fatigue and decreased appetite, with resolution within two weeks. Treatment
emergent SAEs (treatment emergent SAEs are defined as any SAE occurring or worsening on or after the first dose of study drug and within
35 days after the last dose of study drug) associated with OK-432 treatment were reported in 4.1% of patients, with the most severe events
being airway obstruction and facial paralysis due to massive swelling post-injection that required tracheostomy and hospitalization. Both
of these events were reported as resolved.

The safety findings from
the sponsor-conducted retrospective analysis are consistent with the original analysis reported in Smith et al. 2009, and with safety
data in published studies in approximately 865 patients with LMs after treatment with OK-432.

Historical Preclinical Development on
OK-432, predecessor therapy to TARA-002

A comprehensive preclinical
development program for OK-432, including in vitro and in vivo pharmacology and toxicology studies, was conducted by Chugai Pharmaceutical
to support the filing and approval of an NDA with the Japan Pharmaceuticals and Medical Devices Agency. We believe these studies may
help inform the design of a development plan for TARA-002 in LMs. In addition, there is a significant body of literature exploring
the use of OK-432 in other maxillofacial cysts demonstrating strong potential for TARA-002 to be explored in the treatment of these cysts
as well.

Regulatory Interactions

In July 2020, the FDA granted
RPDD for TARA-002 for the treatment of LMs. The FDA grants RPDD for serious diseases that primarily affect children ages 18 years or younger
and fewer than 200,000 persons in the U.S. Under the FDA’s Rare Pediatric Disease Priority Review Voucher Program, a sponsor who
receives an approval of an NDA or BLA for a product for the prevention or treatment of a rare pediatric disease may be eligible for a
voucher, which can be redeemed to obtain priority review for any subsequent marketing application or may be sold or transferred prior
to such redemption. Under the current provisions in the law, the Rare Pediatric Disease Priority Review Voucher Program will sunset on
September 30, 2029, which means that the FDA may only award a Priority Review Voucher, or PRV, for an approved Rare Pediatric Disease
product application if the sponsor has received RPDD for the product and the product is subsequently approved by September 30, 2029.

In
May 2022, the European Commission granted Orphan Medicinal Product Designation to TARA-002 for the treatment of LMs.

In December 2025, the FDA
granted both BTD and FTD for TARA-002 for the treatment of macrocystic and mixed cystic LMs in pediatric patients.

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Manufacturing

TARA-002 is manufactured using
an equivalent, but modernized, proprietary manufacturing process as is used to produce OK-432 by Chugai Pharmaceutical. We propagated
a master cell bank using the same master cell line of the genetically distinct strain of Streptococcus pyogenes (A group, type 3) Su
strain as OK-432. The bacteria is rendered inactive during the manufacturing process, consistent with the process used for OK-432. We
have contracted a cGMP compliant CDMO to manufacture TARA-002 in the U.S.

Collaborations and License Agreements

Chugai Agreement

On June 17, 2019, we entered
into an agreement, or the Chugai Agreement, with Chugai Pharmaceutical, a company organized and existing under the laws of Japan. Chugai
Pharmaceutical has developed and commercialized a therapeutic product, OK-432, or Existing Product, in Japan and Taiwan, or the Chugai
Territory, and owns and controls certain materials and documents related to the Existing Product, or the Chugai Materials. Pursuant to
the Chugai Agreement, Chugai Pharmaceutical has provided us with certain materials and documents relating to the Existing Product and
has provided certain technical services to us for our development and commercialization. This pertains to territories other than the Chugai
Territory, or the Protara Territory, of a new therapeutic product, or the New Product or TARA-002, comparable to the Existing Product.
Under the Chugai Agreement, Chugai Pharmaceutical will exclusively provide the Existing Product and Chugai Materials to us and will not
provide the Existing Product or Chugai Materials to any third parties during the Chugai Service Period, other than for medical, compassionate
use and/or non-commercial research purposes. Additionally, beginning on the effective date of the Chugai Agreement and ending on the fifth
anniversary of such date or upon the termination of the Chugai Agreement, whichever comes earlier, Chugai Pharmaceutical will not provide
Chugai Materials or technical support to any third-party for the purpose of development and commercialization in the Protara Territory
of a therapeutic product comparable to the Existing Product. We are responsible, at our sole cost and expense, for the development and
commercialization of the New Product in the Protara Territory.

On July 14, 2020, we and
Chugai Pharmaceutical entered into an amendment of the Chugai Agreement, or the Chugai Pharmaceutical Amendment, with an effective date
as of June 30, 2020. The Chugai Amendment extended the date through which Chugai will exclusively provide the Existing Product and materials
to us from June 30, 2020 to June 30, 2021, extended the date through which Chugai will not provide materials or technical support to any
third-party for the purpose of development and commercialization in a given area from the fifth anniversary to the eleventh anniversary
of the original effective date (extended to June 17, 2030), and provides for further such extensions on the occurrence of certain events
and milestones. The Chugai Amendment also provides that, in addition to the designated fee payable upon the initial indication approval
in the Chugai Agreement described below, we will pay Chugai Pharmaceutical a designated fee in the low, single digit millions for each
additional indication approval.

As consideration for Chugai
Pharmaceutical’s performance under the Chugai Agreement, we agreed to pay Chugai Pharmaceutical a payment in the low, single-digit
millions, which will be made in two installments with an initial payment made in July 2020, and the remaining majority of the total amount
will be payable upon FDA approval of the New Product.

We granted Chugai Pharmaceutical
a right of first refusal on terms to be negotiated between the parties for a license related to the New Product-relevant information,
data and documentation and inventions to develop and commercialize the New Product in the Chugai Territory. We will be responsible for
manufacturing and supplying, or causing our CDMO to manufacture and supply, the New Product to Chugai Pharmaceutical.

The
Chugai Agreement will remain in full force and effect until the first anniversary of the date of FDA approval of the New Product, unless
terminated sooner, or the Chugai Term. Following the Chugai Service Period and during the Chugai Term, Chugai Pharmaceutical may terminate
the Chugai Agreement, in whole or in part, without cause, by providing us 90 days prior written notice. Following such termination, we
would maintain exclusive access to Chugai Materials, subject to the termination clauses outlined below. We may terminate the Chugai Agreement,
in whole only, by providing Chugai Pharmaceutical 90 days’ prior written notice if: (i) we decide to discontinue the New Product
development; (ii) we decide that the FDA’s requirements for the New Product are not likely to be met; or (iii) the FDA identifies
a safety issue regarding the New Product.

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In addition, either party
may terminate the Chugai Agreement, in whole or in part, in the event that the other party materially breaches the Chugai Agreement and
fails to cure the breach within 30 days of written notice. Either party may terminate the Chugai Agreement in its entirety immediately
upon notice to the other party if such other party: (i) is dissolved or liquidated or takes any corporate action for such purpose; (ii)
becomes insolvent or is generally unable to pay, or fails to pay, its debts as they become due; (iii) files or has filed against it a
petition for voluntary or involuntary bankruptcy or otherwise becomes subject to any proceeding under any domestic or foreign bankruptcy
or insolvency laws; (iv) makes or seeks to make a general assignment for the benefit of creditors; or (v) applies for or has a receiver,
trustee, custodian or similar agent appointed by order of any court to take charge of or sell any material portion of its property or
business.

In the event that we undergo
a change of control, Chugai Pharmaceutical may terminate the Chugai Agreement upon 90 days’ written notice to us, absent a written
pledge by the new controlling party of its agreement to fulfill and undertake all obligations of ours and to be bound by the Chugai Agreement.

Sponsored Research and License Agreement

On November 28, 2018, we
entered into a sponsored research and license agreement, or the Research Agreement, with The University of Iowa, or the University, pursuant
to which the University will provide access to certain program data related to Chugai Pharmaceutical’s OK-432 and will assist us
in conducting certain clinical studies. As consideration for the University’s performance under the Research Agreement, we will
pay the University $30,000 per year in funding for the project, taking into consideration the time spent by University employees required
for the Project. The parties also agree to discuss in good faith potential additional funding required for completion of the project pursuant
to the Research Agreement as applicable and necessary. In addition, within 45 days of approval of the TARA-002 BLA by the FDA, we will
pay a one-time approval milestone between $0 and $1 million to the University, the amount of which depends on the usefulness of the program
data in TARA-002’s BLA filing. We will also be responsible for certain tiered royalties on annual net sales of products for the
indication, which royalty rates are in the low single digit percentages. These royalty rates are also subject to a reduction in the event
that regulatory authorities determine that the program data is not sufficient for regulatory approval on its own and additional pediatric
efficacy and safety clinical studies are required. In the event that the annual net sales surpass certain dollar amount thresholds, we
will need to make certain additional milestone payments following the close of the calendar quarter in which each milestone is reached,
with the payments ranging from $62,500 to $125,000.

We may terminate the Research
Agreement upon 30 days’ prior written notice to the University. Either party may terminate the project under the Research Agreement
and all commitments and obligations with respect thereto upon 30 days’ prior written notice to the other party. In the event of
any termination of the project under the Research Agreement by the University, (a) the University agrees to complete certain phases of
the project and (b) we will continue to provide annual funding until the completion of the second phase of the project. Upon termination
of the project by us, the Agreement will terminate and we will reassign to the University the IND for LMs.

Choline License Agreement

On September 27, 2017, we
entered into a choline license agreement, or the Choline Agreement, with Alan L. Buchman, M.D., pursuant to which Dr. Buchman granted
us an exclusive, worldwide, non-transferable license in and to certain licensed orphan designations, a certain licensed IND, certain existing
study data and certain licensed know-how to develop, make, use, sell, offer for sale and import the licensed product during the term of
the Choline Agreement. We are solely responsible for all fees and expenses under the Choline Agreement, including all due diligence obligations,
regulatory authority fees, attorney fees and consulting fees. During the term of the Choline Agreement, Dr. Buchman may not work with
any third parties on any product competing with the licensed product. In consideration for the rights and licenses granted under the Choline
Agreement, we made an initial upfront payment of $50,000 to Dr. Buchman.

Certain milestone and royalty
payments may also be payable to Dr. Buchman. Pursuant to the Choline Agreement, we paid Dr. Buchman $50,000 in October 2019 because we
had not received at least $5 million in working capital from any source or in any manner as of October 15, 2019. We then paid Dr. Buchman
a $550,000 milestone in January 2020 following our receipt of at least $5 million in working capital.

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Regardless of whether development
or commercialization is undertaken by us under the Choline Agreement, commencing in November 2022 and during the term of the Choline Agreement,
we will pay Dr. Buchman a minimum annual royalty that ranges from $25,000 to $75,000.

We have an obligation to pay
Dr. Buchman sales royalties based on aggregate net sales of IV Choline Chloride in each calendar quarter, with the tiered royalty rates
ranging from 5.0% to 10.5% of net sales. In the event of development or commercialization activity by any sublicensees, we also agreed
to pay Dr. Buchman a royalty in the mid-single digit percentage of (i) net cash receipts, after payment of taxes, received by us from
sublicensees for their sales of licensed products and (ii) any other consideration received by us from such sublicensees; in each case,
including a fair monetary value for any transaction that is not a bona fide arms-length transaction or that is for consideration other
than monetary. Further, in the event of a sale or transfer of a PRV, regarding the license product, regardless of whether any development
or commercialization activity is undertaken by us or our sublicensees, we agreed to pay Dr. Buchman a milestone payment representing the
mid-single digit percentage of (i) net cash receipts, after payment of taxes and (ii) any other consideration; in each case, received
by us, our affiliates, or our sublicensees, including a fair monetary value for any transaction that is not a bona fide arms-length transaction
or that is for consideration other than monetary.

We will also pay Dr. Buchman
up to $775,000 in additional payments upon the achievement of various regulatory approval milestones.

The Choline Agreement will remain
in full force and effect until the last sale of the licensed product under the Choline Agreement. After we received the FDA’s written
minutes from the initial FDA meeting concerning the development of the first licensed product for one or more of the licensed indications,
we paid an additional payment of $100,000 to Dr. Buchman and elected to not terminate the Choline Agreement at that time. The Choline
Agreement may be terminated by Dr. Buchman if, following regulatory approval of a licensed product, we have not made our first sale of
a licensed product within such country within a specified time period. We may terminate the Choline Agreement for convenience upon 90
days’ prior written notice to Dr. Buchman. Dr. Buchman may terminate the Choline Agreement for non-payment of any payment due that
has not been cured. Either party may terminate the Choline Agreement if the other party is in material breach and has not cured such breach
within 60 days’ notice. In addition, Dr. Buchman may terminate the Choline Agreement upon 60 days’ prior written notice if:
(a) we cease or threaten to cease to carry on our business; (b) a petition or resolution for the making of an administration order or
for the bankruptcy, winding-up or dissolution of us is presented or passed; (c) we file a voluntary petition in bankruptcy or insolvency;
(d) a receiver or administrator takes possession of our assets; or (e) any similar procedure is commenced against us in the U.S.

License Agreement

On December 22, 2017, we
entered into a license agreement, or the License Agreement, with The Feinstein Institute for Medical Research, a not-for-profit corporation
organized and existing under the laws of New York, or the Institute. The Institute owns, by assignment, a U.S. patent related to the treatment
of fatty liver disease in humans. Pursuant to the License Agreement, the Institute granted us an exclusive, worldwide license, with the
right to grant sublicenses to non-affiliate third parties, to develop, make, have made, use, sell, offer for sale and import certain products
for use in the field of fatty liver disease in humans receiving total PN, by administering, as monotherapy, a pharmaceutical composition
comprising intravenous choline, wherein the fatty liver disease is selected from IFALD, non-alcoholic fatty liver, non-alcoholic steatohepatitis,
or NASH, NASH-associated liver fibrosis, or non-alcoholic cirrhosis. Notwithstanding the exclusive rights granted to us, the Institute
will retain the right to make, use and practice such patents in its own laboratories solely for non-commercial scientific purposes and
for continued non-commercial research.

As consideration for the
license grant, we agreed to pay the Institute tiered royalties of between 1.0% and 1.5% of all net sales. In addition, we agreed to pay
the Institute a low double digit percentage of net proceeds resulting from agreements entered into within two years from the effective
date of the License Agreement and a mid-single digit percentage of net proceeds resulting from agreements entered into thereafter. We
also agreed to make certain license maintenance payments of $15,000 beginning on the second anniversary of the effective date of the License
Agreement and continuing upon every anniversary thereafter until the first commercial sale of a licensed product. Beginning on the first
anniversary of the effective date of the License Agreement after the first commercial sale of a licensed product and every anniversary
of the effective date of the License Agreement thereafter, we will pay the Institute $30,000 as a license maintenance fee. Such license
maintenance fees are non-refundable but are creditable against future royalty payments due to the Institute during the 12-month period
following each such anniversary.

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We agreed to make certain
one-time milestone payments in the aggregate amount of $375,000 upon the achievement of certain regulatory approval milestones, of which
$100,000 was paid on January 28, 2020 upon us having consummated certain private placements of securities.

Unless terminated earlier,
the License Agreement will expire upon the expiration of the last to expire patent under the License Agreement. We may terminate the License
Agreement by giving the Institute 60 days’ prior notice. Either party may terminate the License Agreement in the event of a default
or breach by the other party that has not been cured within 60 days of such notice. If we (i) make an assignment for the benefit of creditors
or if proceedings for a voluntary bankruptcy are instituted on our behalf; (ii) are declared bankrupt or insolvent or (iii) are convicted
of a felony relating to the manufacture, use or sale of the licensed products or a felony relating to moral turpitude, the Institute may
terminate the License Agreement.

Intellectual Property

Our intellectual property is
critical to our business and we strive to protect it, including by obtaining and maintaining patent protection in the U.S. and internationally
for our product candidates, novel biological discoveries, epitopes, new therapeutic approaches and potential indications, and other inventions
that are important to our business. Throughout the development of our product candidates, we will seek to identify additional means of
obtaining patent protection that would potentially enhance commercial success. We also rely upon trade secrets, know-how, continuing technological
innovation and in-licensing opportunities to develop and maintain our proprietary position.

The patent positions of biotechnology
companies like us are generally uncertain and involve complex legal, scientific and factual questions. We recognize that the ability to
obtain patent protection and the degree of such protection depends on a number of factors, including the extent of the prior art, the
novelty and non-obviousness of the invention, and the ability to satisfy the enablement requirement of the patent laws. In addition, the
coverage claimed in a patent application can be significantly reduced before the patent is issued, and its scope can be reinterpreted
after issuance. Consequently, we may not obtain or maintain adequate patent protection for any of our product candidates. Any patents
that we hold may be challenged, circumvented or invalidated by third parties.

Our commercial success will also
depend in part on not infringing the proprietary rights of third parties. In addition, we have licensed rights under proprietary technologies
of third parties to develop, manufacture and commercialize specific aspects of our products and services. It is uncertain whether the
issuance of any third-party patent would require us to alter our development or commercial strategies, alter our processes, obtain licenses
or cease certain activities. The expiration of patents or patent applications licensed from third parties or our breach of any license
agreements or failure to obtain a license to proprietary rights that it may require to develop or commercialize our future technology
may have a material adverse impact on it. If third parties prepare and file patent applications in the U.S. that also claim technology
to which we have rights, we may have to participate in interference proceedings in the USPTO to determine priority of invention. For a
more comprehensive discussion of the risks related to our intellectual property, please see “Risk Factors—Risks Related
to Our Intellectual Property.”

TARA-002:

TARA-002
is a genetically distinct Su strain of Streptococcus pyogenes (group A, type 3). TARA-002 is produced through a proprietary manufacturing
process, during which the bacteria is inactivated. We believe a significant barrier to entry exists, as we believe only Chugai Pharmaceutical
and we have the specific strain and possess the know-how to manufacture the product. We anticipate that, if approved by the FDA, TARA-002
will be protected by 12 years of biologic exclusivity. In addition, the USPTO has issued to us U.S. Patent No. 12,551,514 claiming a
method of treating NMIBC with a combination of non-viable cells of streptococcus pyogenes and an immune checkpoint inhibitor,
with a term expiring in 2044.

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IV Choline Chloride:

With respect to IV Choline Chloride,
we have acquired an exclusive, worldwide license to U.S. Patent 8,865,641 B2 from the Feinstein Institute for Medical Research providing
protection in the U.S. until 2035. The patent applies to a method of treating a fatty liver disease in a subject. In particular, the method
comprises administering to the subject an effective amount of a cholinergic pathway stimulating agent, wherein the fatty liver disease
is selected from non-alcoholic fatty liver, alcoholic fatty liver, or NASH, alcoholic steatohepatitis, or ASH, NASH-associated liver fibrosis,
ASH-associated liver fibrosis, non-alcoholic cirrhosis and alcoholic cirrhosis. In addition, in 2022, the USPTO issued to us Patent No.
US 11,311,503 claiming a sterile aqueous choline salt composition with a term expiring in 2041. We expect to list such patent in the FDA’s
Orange Book List of Approved Drug Products with Therapeutic Equivalence Evaluations if IV Choline Chloride is approved by the FDA. Further,
in 2024, the USPTO issued to us Patent No. US 12,083,081 claiming a method of treating choline deficiency with a choline composition,
also with a term expiring in 2041.

The term of individual patents
depends upon the legal term of the patents in the countries in which they are obtained. In most countries in which we may file, the patent
term is 20 years from the earliest date of filing a non-provisional patent application related to the patent. A U.S. patent also may be
accorded a patent term adjustment under certain circumstances to compensate for delays in obtaining the patent from the USPTO. In some
instances, such a patent term adjustment may result in a U.S. patent term extending beyond 20 years from the earliest date of filing a
non-provisional patent application related to the U.S. patent. In addition, in the U.S., the term of a U.S. patent that covers an FDA-approved
drug may also be eligible for patent term extension, which permits patent term restoration as compensation for the patent term lost during
the FDA regulatory review process. The Hatch-Waxman Act permits a patent term extension of up to five years beyond the expiration of the
patent. The length of the patent term extension is related to the length of time the drug is under regulatory review. Patent term 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 Europe and other foreign jurisdictions to extend the term of
a patent that covers an approved drug. In the future, if and when our products receive FDA approval, we expect to apply for patent term
extensions on patents covering certain of those products, when applicable.

We also rely on trade secrets
relating to product candidates and seek to protect and maintain the confidentiality of proprietary information to protect aspects of our
business that are not amenable to, or that we do not consider appropriate for, patent protection. Although we take steps to protect our
proprietary information and trade secrets, including through contractual means with our employees and consultants, third parties may independently
develop substantially equivalent proprietary information and techniques or otherwise gain access to our trade secrets, including through
breaches of such agreements with our employees and consultants. Thus, we may not be able to meaningfully protect our trade secrets. It
is our policy to require our employees, consultants, outside scientific partners, sponsored researchers and other advisors to execute
confidentiality agreements upon the commencement of employment or consulting relationships with us. These agreements provide that all
confidential information concerning our business or financial affairs developed or made known to the individual during the course of the
individual’s relationship with us is to be kept confidential and not disclosed to third parties except in specific circumstances.
Our agreements with employees also provide that all inventions conceived by the employee in the course of employment with us or from the
employee’s use of our confidential information are our exclusive property.

Manufacturing

We rely on CDMOs to produce
our drug candidates in accordance with cGMP as well as regulations for use in clinical trials and for commercial product. The manufacturing
of pharmaceuticals is subject to extensive cGMP regulations, which impose various procedural and documentation requirements and govern
all areas of record keeping, production processes and controls, personnel and quality control.

The CDMOs that we partner
with have the capability to produce clinical supply required for clinical trials, as well as support commercial scale-up activities for
both TARA-002 and IV Choline Chloride.

TARA-002 is manufactured
using an equivalent, but modernized, proprietary manufacturing process as is used to produce OK-432 by Chugai Pharmaceutical, starting
with a master cell line propagated by us but utilizing the same genetically distinct strain of Streptococcus pyogenes (A group, type 3)
Su strain, which is inactivated during the manufacturing process, as OK-432.

22

Both TARA-002 and IV Choline
Chloride are or will be manufactured in the U.S. The starting materials for TARA-002 were provided to us pursuant to an agreement with
Chugai Pharmaceutical. The regulatory starting materials for IV Choline Chloride are available commercially.

Sales and Marketing

We plan to become a fully-integrated
commercial biopharmaceutical company in the U.S. pursuing our mission of supporting and improving the lives of patients suffering from
cancer and rare diseases.

If approved by the FDA, we plan
to commercialize all of our current product candidates in the U.S. first and then either alone or with partners in other geographies,
if approved by the regulatory authorities in those other locations. As we advance TARA-002 and IV Choline Chloride through our respective
clinical development programs, we plan to grow our commercial organization in support of anticipated product launches.

Competition

The process for commercialization
of new drugs is very competitive, and we could potentially face worldwide competition from other pharmaceutical companies, biotechnology
companies and ultimately generic or biosimilar products. Our potential competitors may develop or market therapies that are available
sooner, more clinically effective, safer or less expensive than any therapeutic products we develop. Numerous companies are engaged in
the development, patenting, manufacturing and marketing of healthcare products competitive with those that we are developing.

With respect to our lead product candidate, TARA-002, for the treatment
of NMIBC and LMs, the active ingredient in TARA-002 is a genetically distinct strain of Streptococcus pyogenes (group A, type 3) Su strain,
which is inactivated during the manufacturing process. TARA-002 is produced through a proprietary manufacturing process. We anticipate
that, if approved by the FDA, TARA-002 will be protected by 12 years of biologic exclusivity. In addition, based on the prevalence of
the disease, TARA-002 is likely to have seven years of concurrent ODD exclusivity for the treatment of LMs. Further, the USPTO issued
to us Patent No. 12,551,514 claiming a method of treating NMIBC with a combination of non-viable cells of streptococcus pyogenes
and an immune checkpoint inhibitor, with a term expiring in 2044.

There are no approved pharmacotherapies
currently available for the treatment of LMs in the U.S., and the current treatment options include a high-risk surgical procedure and
off-label use of sclerosants, including doxycycline, bleomycin, ethanol and sodium tetradecyl sulfate. There are a number of drug development
companies and academic researchers exploring oral and topical formulations of various agents for the treatment of LMs including macrolides,
phosphodiesterase inhibitors, and calcineurin/mTOR inhibitors. These are in early development.

TARA-002, if approved for
the treatment of NMIBC, would be subject to competition from existing treatment methods of surgery, chemotherapy and immunomodulatory
therapy. For example, the current standard of care for NMIBC includes intravesical BCG TICE (manufactured by Merck & Co., Inc.). Other
products approved for the treatment of NMIBC include Merck & Co., Inc.’s Keytruda, Endo International plc’s Valstar, Ferring
B.V.’s Adstiladrin, ImmunityBio, Inc.’s VesAnktiva in combination with BCG and Janssen’s Inlexzo. Additional product
candidates in development include but may not be limited to Japanese BCG Laboratory’s BCG Tokyo, Pfizer Inc.’s Sasanlimab
in combination with BCG, CG Oncology Inc.’s CG0070, enGene Inc.’s, EG-70, Pfizer Inc.’s PADCEV, Janssen’s TAR-200
plus Cetrelimab, Urogen Pharma Ltd.’s Jelmyto, Theralase Technologies Inc.’s Ruvidar, and Auro BioSciences, Inc.’s Aura-0011.
Additional pharmaceutical and biotechnology companies with product candidates in development for the treatment of NMIBC include but may
not be limited to Verity, AstraZeneca PLC, Bristol-Myers Squibb Company, Roche Group, Asieris Pharmaceuticals, BeiGene, Ltd, NanOlogy,
LLC, Linton Pharm Co., Ltd., Lindis Biotech GmbH, Taizhou Hanzhong biomedical co. Ltd., Shionogi & Co. Ltd., Rapamycin Holdings, Inc.,
Vaxiion Therapeutics Inc., Incyte Corporation, LiPac Oncology, Inc., Anika Therapeutics Inc., Surge Pharmaceuticals Pvt. Ltd., and Istari
Oncology, Inc.

There are currently no available
PS formulations containing choline. IV Choline Chloride is the only sterile injectable form of choline chloride that can be combined with
PS. Further, the USPTO, issued to us Patent No. US 11,311,503 claiming a sterile aqueous choline salt composition, and Patent No. US 12,083,081
claiming a method of treating choline deficiency with a choline composition, each with a term expiring in 2041.

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Government Regulation and Product Approval

The FDA and other regulatory
authorities at federal, state, and local levels, as well as in foreign countries, extensively regulate, among other things, the research,
development, testing, manufacturing, quality control, import, export, safety, effectiveness, labeling, packaging, storage, distribution,
record keeping, approval, advertising, promotion, marketing, post-approval monitoring and post-approval reporting of drugs and biologics
such as those we are developing. We, along with third-party contractors, will be required to navigate the various preclinical, clinical
and commercial approval requirements of the governing regulatory agencies of the countries in which we wish to conduct studies or seek
approval or licensure of our product candidates.

In the U.S., the FDA regulates
drugs under the Federal Food, Drug, and Cosmetic Act, and biologics additionally under the Public Health Service Act, or PHSA, as well
as their respective implementing regulations. Drugs are approved via NDAs while biologics are approved via BLAs. The application process
and requirements for approval of BLAs are very similar to those for NDAs. Failure to comply with applicable U.S. requirements may subject
a company to a variety of administrative or judicial sanctions, such as clinical hold, FDA refusal to file NDAs or BLAs and/or to approve
pending NDAs or BLAs, warning or untitled letters, product recalls, product seizures, total or partial suspension of production or distribution,
injunctions, fines, civil penalties and criminal prosecution.

The
process required by the FDA before biopharmaceutical product candidates may be marketed in the U.S. generally involves the following:

24

Preclinical and Clinical Development

Pharmaceutical product development
for a new product or certain changes to an approved product in the U.S. typically involves preclinical laboratory and animal testing,
the submission to the FDA of an IND, which is a request for authorization from the FDA to administer an investigational product candidate
to humans, and adequate and well-controlled clinical trials to establish the safety and effectiveness of the drug for each indication
for which FDA approval is sought. Satisfaction of FDA pre-market approval requirements typically takes many years and the actual time
required may vary substantially based upon the type, complexity and novelty of the product or disease.

Preclinical tests include
laboratory evaluation of product chemistry, formulation and toxicity, as well as animal studies to assess the characteristics and potential
safety and efficacy of the product. The conduct of the preclinical tests must comply with federal regulations and requirements, including
cGLP regulations, an international standard meant to ensure the presence of a standard quality system under which laboratory work and
non-clinical studies are conducted, recorded and archived.

The IND includes results of animal
and in vitro studies assessing the toxicology, PKs, pharmacology and pharmacodynamic characteristics of the product candidate; chemistry,
manufacturing, and controls information; the general investigational plan; the proposed protocol(s) for clinical trials; and any available
human data or literature to support the use of the investigational product. Long-term preclinical tests, such as tests of reproductive
toxicity and carcinogenicity in animals, may continue after the IND is submitted. An IND must become effective before human clinical trials
may begin. The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA, within the 30-day time period, raises
safety concerns or questions about the proposed clinical trial. In such a case, the IND may be placed on clinical hold and the IND sponsor
and the FDA must resolve any outstanding concerns or questions before the clinical trial can begin. Submission of an IND therefore may
or may not result in FDA authorization to begin a clinical trial.

Clinical trials involve the administration
of the investigational product to human subjects under the supervision of qualified investigators in accordance with cGCPs, an international
standard designed to protect the rights and health of human subjects participating in research, which includes the requirement that all
research participants provide their informed consent for their participation in any clinical trial, and to define the roles, qualifications
and responsibilities of clinical trial sponsors, administrators and monitors. Clinical trials are conducted under protocols 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. A separate submission to the existing IND must be made for each successive clinical trial conducted during product development
and for any subsequent protocol amendments. Furthermore, an independent IRB for each site proposing to conduct the clinical trial must
review and approve the plan for any clinical trial and its informed consent form before the clinical trial begins at that site, and must
monitor the clinical trial until completed. Regulatory authorities, the IRB or the sponsor may suspend a clinical trial at any time on
various grounds, including a finding that the subjects are being exposed to an unacceptable health risk or that the clinical trial is
unlikely to meet its stated objectives. Some studies also include oversight by an independent group of qualified experts organized by
the clinical trial sponsor, known as a data safety monitoring board, which provides authorization for whether or not a clinical trial
may move forward at designated check points based on access to certain data from the clinical trial and may recommend that the clinical
trial be stopped if it determines that there is an unacceptable safety risk for subjects or other grounds, such as no demonstration of
efficacy. There are also requirements governing the reporting of ongoing clinical trials and clinical trial results to public registries.

Human clinical trials are
typically conducted in three sequential phases that may overlap.

25

In most cases the FDA requires
two adequate and well-controlled Phase 3 clinical trials to demonstrate the efficacy of a drug. A single Phase 3 trial with other confirmatory
evidence may be sufficient in rare instances, including (1) where the study is a large multicenter clinical trial demonstrating internal
consistency and a statistically very persuasive finding of a clinically meaningful effect on mortality, irreversible morbidity or prevention
of a disease with a potentially serious outcome and confirmation of the result in a second clinical trial would be practically or ethically
impossible or (2) when in conjunction with confirmatory evidence. In some cases, the FDA may require, or companies may voluntarily pursue,
additional clinical trials after a product is approved to gain more information about the product. These post-approval trials may be made
a condition to approval of the NDA or BLA. Concurrent with clinical trials, companies may complete additional animal studies and develop
additional information about the biological characteristics of the product candidate, and must finalize a process for manufacturing the
product in commercial quantities in accordance with cGMP requirements. The manufacturing process must be capable of consistently producing
quality batches of the product candidate and, among other things, must develop methods for testing the identity, strength, quality and
purity of the final product, or for biologics, the safety, purity and potency. Additionally, appropriate packaging must be selected and
tested and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over
its shelf life.

In addition, the sponsor
of an investigational drug in a Phase 2 or Phase 3 clinical trial for a serious or life-threatening disease is required to make available,
such as by posting on its website, its policy on evaluating and responding to requests for expanded access to such investigational drug.

Application Submission, Review and Approval

Assuming successful completion
of all required testing in accordance with all applicable regulatory requirements, the results of product development, non-clinical studies
and clinical trials are submitted to the FDA as part of an NDA or BLA requesting approval to market the product for one or more indications
in the U.S. The NDA or BLA must include all relevant data available from all preclinical and clinical trials, including negative or ambiguous
results as well as positive findings, together with detailed information relating to the product’s chemistry, manufacturing, controls,
and proposed labeling, among other things. The submission of an NDA or BLA requires payment of a substantial application user fee to the
FDA, unless a waiver or exemption applies. These fees are typically increased annually.

The FDA has 60 days from its
receipt of an NDA or BLA to determine whether the application will be filed based on the FDA’s determination that it is adequately
organized and sufficiently complete to permit substantive review. Once the submission is filed, the FDA begins an in-depth review. For
new molecular entities, the FDA’s goal is to review standard applications within ten months after it files the application, or,
if the application qualifies for priority review, six months after the FDA files the application. In both standard and priority reviews,
the review process may be extended by FDA requests for additional information or clarification. The FDA reviews the application to determine,
among other things, whether a product is safe, pure and potent and the facility in which it is manufactured, processed, packed, or held
meets standards designed to assure the product’s continued safety, purity and potency. The FDA may convene an advisory committee
– typically a panel that includes clinicians, statisticians and other experts – to provide insight on application review questions.
The FDA is not bound by the recommendation of the advisory committee, but generally follows such recommendation. Before approving an NDA
or BLA, the FDA will typically inspect the facility or facilities where the product is manufactured. The FDA will not approve an application
unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent
production of the product within required specifications. Additionally, before approving an NDA or BLA, the FDA will typically inspect
one or more clinical sites to assure compliance with cGCP. If the FDA determines that the application, manufacturing process or manufacturing
facilities are not acceptable, it will outline the deficiencies in the submission and often will request additional testing or information.
Notwithstanding the submission of any requested additional information, the FDA ultimately may decide that the application does not satisfy
the regulatory criteria for approval.

26

The FDA will issue an approval
letter or a Complete Response letter, or CRL, upon completion of review of an NDA or BLA. An approval letter authorizes commercial marketing
of the product with specific prescribing information for specific indications. A CRL will describe all of the deficiencies that the FDA
has identified in the NDA or BLA. In issuing the CRL, the FDA may recommend actions that the applicant might take to place the application
in condition for approval, including requests for additional information or clarification. The FDA may delay or refuse approval of an
application if applicable regulatory criteria are not satisfied, require additional testing or information and/or require post-marketing
testing and surveillance to monitor safety or efficacy of a product. If, or when, deficiencies outlined in a CRL have been addressed to
the FDA’s satisfaction in a resubmission of the NDA or BLA, the FDA will issue an approval letter. The FDA has committed to reviewing
such resubmissions in two or six months depending on the type of information included.

As a condition of NDA or BLA
approval, the FDA may impose limitations on the indicated uses for which such product may be marketed. For example, the FDA may impose
a REMS, to ensure the benefits of the product outweigh its risks. A REMS is a safety strategy to manage a known or potential serious risk
associated with a product and to enable patients to have continued access to such medicines by managing their safe use, and could include
medication guides, physician communication plans, or elements to assure safe use, such as restricted distribution methods, patient registries
and other risk minimization tools. The FDA also may condition approval on, among other things, changes to proposed labeling or the development
of adequate controls and specifications. Once approved, the FDA may withdraw the product approval if compliance with pre- and post-marketing
requirements is not maintained or if problems occur after the product reaches the marketplace. The FDA may require one or more post-approval
trials and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization, and may limit
further marketing of the product based on the results of these post-marketing trials.

Disclosure of Clinical Trial Information

Sponsors of clinical trials
of FDA regulated products, including drugs, are required to register and disclose certain clinical trial information. Information related
to the product, patient population, phase of investigation, study sites and investigators, and other aspects of the clinical trial is
then made public as part of the registration. Sponsors are also obligated to discuss the results of their clinical trials after completion.
Disclosure of the results of these clinical trials can be delayed in certain circumstances for up to two years after the date of completion
of the clinical trial. Competitors may use this publicly available information to gain knowledge regarding the progress of development
programs. The government published a regulation and policy to expand and enhance the requirements related to registering and reporting
the results of clinical trials, which may result in greater enforcement of these requirements in the future.

Orphan Drug Designation

Under the Orphan Drug Act, the
FDA may grant ODD to a drug or biologic intended to treat a rare disease or condition, which is a disease or condition that affects fewer
than 200,000 individuals in the U.S., or more than 200,000 individuals in the U.S. for which there is no reasonable expectation that the
cost of developing and making available in the U.S. a drug or biologic for this type of disease or condition will be recovered from sales
in the U.S. for that drug or biologic. ODD must be requested before submitting an NDA or BLA. After the FDA grants ODD, the generic identity
of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA. ODD does not convey any advantage in, or shorten
the duration of, the regulatory review or approval process.

If a product that has ODD subsequently
receives the first FDA approval for the disease for which it has such designation, the product is entitled to orphan exclusivity, which
means that the FDA may not approve any other applications, including a full NDA or BLA, to market the same product for the same indication
for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity.
Orphan exclusivity does not prevent the FDA from approving a different drug or biologic for the same disease or condition, or the same
drug or biologic for a different disease or condition. Among the other benefits of ODD are tax credits for certain research and a waiver
of the FDA application fee.

A designated orphan product may
not receive orphan exclusivity if it is approved for a use that is broader than the indication for which it received ODD. In addition,
exclusive marketing rights in the U.S. may be lost if the FDA later determines that the request for designation was materially defective
or if the manufacturer is unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or
condition.

27

Rare Pediatric Disease Priority Review Voucher
Program

The FDA incentivizes the development
of drugs and biologics for diseases that meet the definition of a “rare pediatric disease” defined to mean a serious or life-threatening
disease in which the serious or life-threatening manifestations primarily affect individuals aged from birth to 18 years and the disease
affects fewer than 200,000 individuals in the U.S. or affects 200,000 or more in the U.S. and for which there is no reasonable expectation
that the cost of developing and making in the U.S. a drug for such disease or condition will be received from sales in the U.S. of such
drug. The sponsor of a product candidate granted RPDD may be eligible for a voucher that can be used to obtain a priority review for a
subsequent NDA or BLA after the date of approval of the designated Rare Pediatric Disease drug product, referred to as a PRV. To receive
a Rare Pediatric Disease PRV, a sponsor must notify the FDA, upon submission of the NDA or BLA, of its intent to request a voucher. If
the FDA determines that the NDA or BLA is a Rare Pediatric Disease product application, and if the NDA or BLA is granted priority review
by the FDA and subsequently approved, the FDA will award the sponsor of the application a PRV upon approval of the NDA or BLA. The FDA
may revoke a Rare Pediatric Disease PRV if the product for which it was awarded is not marketed in the U.S. within 365 days of the product’s
approval. The sponsor submitting the PRV must notify the FDA of is intent to submit the voucher with the NDA or BLA at least 90 days prior
to submission of the NDA or BLA and must pay a priority review user fee in addition to any other required user fee. The FDA must take
action on an NDA or BLA under priority review within six months of the FDA’s filing of the NDA or BLA. A RPDD does not guarantee
that an applicant will receive a priority review or a PRV upon approval of its NDA or BLA. If a PRV is received, under the Rare Pediatric
Disease PRV Program, it may be sold or transferred an unlimited number of times prior to its redemption.

The Rare Pediatric Disease
PRV Program has always had a scheduled sunset date established in the law. Under the current provisions in the law, the Rare Pediatric
Disease PRV Program will sunset on September 30, 2029, which means that the FDA may only award a PRV for an approved Rare Pediatric Disease
product application if the sponsor has received RPDD for the product by and the product is subsequently approved by September 30, 2029.

Fast Track Designation

Under the FDA’s Fast Track
program, the sponsor of a new drug candidate may request that the FDA designate the drug candidate for a specific indication as a Fast
Track drug concurrent with, or after, the submission of the IND for the drug candidate. The FDA must determine if the drug candidate qualifies
for FTD within 60 days of receipt of the sponsor’s request. FTD is intended to facilitate development and expedite review of drugs
to treat serious and life-threatening conditions so that an approved product can reach the market expeditiously. If a product receives
FTD, the sponsor may engage in more frequent interactions with the FDA, and the FDA may conduct a rolling review, meaning the FDA will
review sections of the NDA or BLA before the full application is complete. This rolling review is available if, in agreement with the
FDA, the applicant provides a schedule for the submission of the remaining information. However, the FDA does not start the review clock
for the application until the last section of the NDA or BLA is submitted. FTD may be withdrawn by the FDA at any time if the FDA believes
that the designation is no longer supported by emerging data in the development process.

Breakthrough Therapy Designation

Additionally, a drug candidate
may be eligible for designation as a breakthrough therapy if the drug is intended, alone or in combination with one or more other drugs
or biologics, to treat a serious or life-threatening condition and preliminary clinical evidence indicates that the drug may demonstrate
substantial improvement over currently approved therapies on one or more clinically significant endpoints. The FDA expects that such evidence
generally would be derived from early phase clinical trials such as Phase 1 or Phase 2 clinical trials. For purposes of BTD, preliminary
clinical evidence refers to evidence that is sufficient to indicate that the drug may demonstrate substantial improvement in effectiveness
or safety over available therapies. The FDA must determine if the product candidate qualifies for BTD within 60 days of receipt of the
sponsor’s request. The FDA may take certain actions with respect to breakthrough therapies, including holding meetings with the
sponsor throughout the development process, providing timely advice to the product sponsor regarding development and approval, involving
more senior staff in the review process, assigning a cross-disciplinary project lead for the review team and taking other steps to design
the clinical studies in an efficient manner. BTD may be withdrawn by the FDA at any time if they believe that the designation is no longer
supported by emerging data in the development process.

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Post-Approval Requirements

Any products manufactured
or distributed pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things,
requirements relating to quality control and quality assurance, record-keeping, reporting of adverse experiences, periodic reporting,
product sampling and distribution, and advertising and promotion of the product. After approval, most changes to the approved product,
such as adding new indications or other labeling claims, are subject to prior FDA review and approval. There also are continuing user
fee requirements, under which the FDA assesses an annual program fee for each product identified in an approved NDA or BLA. Biopharmaceutical
manufacturers and their subcontractors are required to register their establishments with the FDA and certain state agencies, and are
subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMP, which impose certain procedural
and documentation requirements upon sponsors and their third-party manufacturers. Changes to the manufacturing process are strictly regulated,
and, depending on the significance of the change, may require prior FDA approval before being implemented. FDA regulations also require
investigation and correction of any deviations from cGMP and impose reporting requirements upon sponsor and third-party manufacturers.
Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain compliance
with cGMP and other aspects of regulatory compliance.

The FDA may withdraw approval
if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market.
Later discovery of previously unknown problems with a product, including AEs of unanticipated severity or frequency, or with manufacturing
processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information;
imposition of post-market studies or clinical trials to assess new safety risks; or imposition of distribution restrictions or other restrictions
under a REMS program. Other potential consequences include, among other things:

The FDA closely regulates
the marketing, labeling, advertising and promotion of biopharmaceuticals. A company can make only those claims relating to safety and
efficacy, purity and potency of a biopharmaceutical that are approved by the FDA and in accordance with the provisions of the approved
label. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses. Failure to comply
with these requirements can result in, among other things, adverse publicity, warning letters, corrective advertising and potential civil
and criminal penalties. Physicians may prescribe legally available products for uses that are not described in the product’s labeling
and that differ from those approved by the FDA. Such off-label uses are common across medical specialties. Physicians may believe that
such off-label uses are the best treatment for many patients in varied circumstances. The FDA does not regulate the behavior of physicians
in their choice of treatments. The FDA does, however, restrict manufacturer’s communications on the subject of off-label use of
their products.

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Additional Controls for Biologics

To help reduce the increased
risk of the introduction of adventitious agents, the PHSA emphasizes the importance of manufacturing controls for products whose attributes
cannot be precisely defined. The PHSA also provides authority to the FDA to immediately suspend biologics licenses in situations where
there exists a danger to public health, to prepare or procure products in the event of shortages and critical public health needs, and
to authorize the creation and enforcement of regulations to prevent the introduction or spread of communicable diseases within the U.S.

After a BLA is approved, the
product may also be subject to official lot release as a condition of approval. As part of the manufacturing process, the manufacturer
is required to perform certain tests on each lot of the product before it is released for distribution. If the product is subject to official
release by the FDA, the manufacturer submits samples of each lot of product to the FDA together with a release protocol showing a summary
of the lot manufacturing history and the results of all of the manufacturer’s tests performed on the lot. The FDA may also perform
certain confirmatory tests on lots of some products, such as viral vaccines, before allowing the manufacturer to release the lots for
distribution. In addition, the FDA conducts laboratory research related to the regulatory standards on the safety, purity, potency and
effectiveness of biological products. As with drugs, after approval of a BLA, biologics manufacturers must address any safety issues that
arise, are subject to recalls or a halt in manufacturing, and are subject to periodic inspection after approval.

The Hatch-Waxman Amendments

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. 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
generic competitors in support of approval of an abbreviated new drug application, or ANDA. An ANDA provides for marketing of a drug product
that has the same active ingredients in the same strengths and dosage form as the listed drug and has been shown through bioequivalence
testing to be therapeutically equivalent to the listed drug. Other than the requirement for bioequivalence testing, ANDA applicants are
not required to conduct, or submit results of, preclinical or clinical tests to prove the safety or effectiveness of their drug product.
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.

The ANDA applicant is required
to certify certain statements to the FDA with respect to 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 applicant may also elect to submit a section viii statement certifying
that its proposed ANDA label does not contain (or carve out) any language regarding the patented method-of-use rather than certify to
a listed method-of-use patent. If the applicant does not challenge the listed patents, the ANDA 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 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 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 until the earliest of 30 months, expiration
of the patent, settlement of the lawsuit, or a decision in the infringement case that is favorable to the ANDA applicant.

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The ANDA application will not be approved until any applicable non-patent exclusivity listed in the Orange Book for the referenced product has expired.

Exclusivity

Upon NDA approval of a new chemical
entity, or NCE, which is a drug that contains no active moiety that has been approved by the FDA in any other NDA, that drug receives
five years of marketing exclusivity during which the FDA cannot receive any ANDA seeking approval of a generic version of that drug. An
ANDA may be submitted one year before NCE exclusivity expires if a Paragraph IV certification is filed. If there is no listed patent in
the Orange Book, there may not be a Paragraph IV certification, and, thus, no ANDA may be filed before the expiration of the exclusivity
period. Certain changes to a drug, such as the addition of a new indication to the package insert, can be the subject of a three-year
exclusivity period if the application contains reports of new clinical investigations (other than bioavailability studies) conducted or
sponsored by the sponsor that were essential to the approval of the application. The FDA cannot approve an ANDA for a generic drug that
includes the change during the exclusivity period.

Patent term extension

After NDA approval, owners
of relevant drug patents may apply for up to a five-year patent extension. The allowable patent term extension is calculated as half of
the drug’s testing phase (the time between IND application and NDA submission) and all of the review phase (the time between NDA
submission and approval up to a maximum of five years). The time can be shortened if the FDA determines that the applicant did not pursue
approval with due diligence. The total patent term after the extension may not exceed 14 years from the date of product approval. Only
one patent applicable to an approved drug is eligible for extension and only those claims covering the approved drug, a method for using
it, or a method for manufacturing it may be extended, and the application for the extension must be submitted prior to the expiration
of the patent. For patents that might expire during the application phase, the patent owner may request an interim patent extension. An
interim patent extension increases the patent term by one year and may be renewed up to four times. For each interim patent extension
granted, the post-approval patent extension is reduced by one year. The director of the USPTO must determine that approval of the drug
covered by the patent for which a patent extension is being sought is likely. Interim patent extensions are not available for a drug for
which an NDA has not been submitted.

Biosimilars and Reference Product Exclusivity

The Patient Protection and
Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, or ACA, signed into law in 2010, includes a subtitle
called the Biologics Price Competition and Innovation Act of 2009, or BPCIA, which created an abbreviated approval pathway for biological
products that are biosimilar to or interchangeable with an FDA-approved reference biological product. To date, numerous biosimilars and
several interchangeable biosimilars have been licensed under the BPCIA and approved in Europe. The FDA has issued several guidance documents
outlining its approach to the review and approval of biosimilars and interchangeable biosimilars.

Biosimilarity, which requires
that there be no differences in conditions of use, route of administration, dosage form, and strength, and no clinically meaningful differences
between the biological product and the reference product in terms of safety, purity, and potency, must be shown through analytical studies,
animal studies, and a clinical trial or trials unless the Secretary of the U.S. Department of Health and Human Services, or HHS, waives
a required element. A biosimilar product may be deemed interchangeable with a previously approved product if it is biosimilar to the reference
product and the product demonstrates that it 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. Complexities associated with the larger, and often more complex, structures of biological products, as
well as the processes by which such products are manufactured, pose significant hurdles to implementation of the abbreviated approval
pathway that are still being worked out by the FDA.

Under the BPCIA, an application
for a biosimilar product may not be submitted to the FDA until four years following the date that its 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
its 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
created certain exclusivity periods for biosimilars approved as interchangeable products. At this juncture, it is unclear whether products
deemed “interchangeable” by the FDA will, in fact, be readily substituted by pharmacies, which are governed by state pharmacy
law.

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The BPCIA is complex and
continues to be interpreted and implemented by the FDA and litigated in the courts.

Pediatric Information

Under the Pediatric Research
Equity Act, or PREA, NDAs, BLAs or supplements to NDAs or BLAs must contain data to assess the safety and effectiveness of the drug for
the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation
for which the drug is safe and effective. Alternatively, for an original NDA for a new active ingredient, the application could instead
be required to include reports on a molecularly targeted pediatric cancer investigation, if the drug is intended for the treatment of
an adult cancer and directed at a molecular target that the FDA determines to be substantially relevant to the growth or progression of
a pediatric cancer. The FDA may grant full or partial waivers, or deferrals, for submission of data. With certain exceptions, the PREA
does not apply to any drug for an indication for which ODD has been granted. This exemption does not apply to an original NDA for a new
active ingredient for an indication for which ODD has been granted if the NDA is subject to the molecularly targeted pediatric cancer
investigation requirement.

The Best Pharmaceuticals for
Children Act, or BPCA, provides NDA holders a six-month extension of any exclusivity—patent or nonpatent—for a drug and BLA
holders a six-month extension of market exclusivity for biologics if certain conditions are met. Conditions for exclusivity include the
FDA’s determination that information relating to the use of a new drug or biologic in the pediatric population may produce health
benefits in that population, the FDA making a written request for pediatric studies, and the applicant agreeing to perform, and reporting
on, the requested studies within the statutory timeframe. Applications under the BPCA are treated as priority applications.

Other U.S. Healthcare Laws and Compliance
Requirements

In the U.S., a pharmaceutical
company’s operations are subject to regulation by various federal, state and local authorities in addition to the FDA, including
but not limited to, the Centers for Medicare & Medicaid Services, or CMS, other divisions of the HHS (such as the Office of Inspector
General, Office for Civil Rights and the Health Resources and Service Administration), the U.S. Department of Justice, or DOJ, and individual
U.S. Attorney offices within the DOJ, and state and local governments. For example, clinical research, sales, marketing and scientific/educational
grant programs will need to comply with the anti-fraud and abuse provisions of the Social Security Act, the false claims laws, the privacy
and security provisions of the Health Insurance Portability and Accountability Act, or HIPAA, and similar state laws, each as amended,
as applicable.

The federal Anti-Kickback
Statute prohibits, among other things, any person or entity, from knowingly and willfully offering, paying, soliciting or receiving any
remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce or in return for purchasing, leasing, ordering
or arranging for the purchase, lease or order of any item or service reimbursable, in whole or in part, under Medicare, Medicaid or other
federal healthcare programs. The term remuneration has been interpreted broadly to include anything of value. The Anti-Kickback Statute
has been interpreted to apply to arrangements between therapeutic product manufacturers on one hand and prescribers, purchasers, and formulary
managers on the other. 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 and practices that involve remuneration that may be alleged to be intended to induce
prescribing, purchasing or recommending 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 of its facts and circumstances. A pharmaceutical company’s practices may not in all cases meet all of the
criteria for protection under a statutory exception or regulatory safe harbor.

Additionally, the intent standard
under the Anti-Kickback Statute was amended by the ACA 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. Violations of the Anti-Kickback Statute
are subject to civil and criminal fines and penalties for each violation, plus up to three times the remuneration involved, imprisonment
and exclusion from government healthcare programs. In addition, the ACA 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 False Claims
Act, or the FCA.

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The federal false claims,
including the FCA, and civil monetary penalty laws, which imposes significant penalties and can be enforced by private citizens through
civil qui tam actions, prohibit any person or entity from, among other things, knowingly presenting, or causing to be presented, a false
or fraudulent claim for payment to, or approval by, the federal government, including federal healthcare programs, such as Medicare and
Medicaid, knowingly making, using, or causing to be made or used a false record or statement material to a false or fraudulent claim to
the federal government, or knowingly making a false statement to improperly avoid, decrease or conceal an obligation to pay money to the
federal government. A claim includes “any request or demand” for money or property presented to the U.S. government. For instance,
historically, pharmaceutical and other healthcare companies have been prosecuted under these laws for allegedly providing free product
to customers with the expectation that the customers would bill federal programs for the product. Other companies have been prosecuted
for causing false claims to be submitted because of the companies’ marketing of the product for unapproved, off-label, and thus
generally non-reimbursable, uses.

HIPAA created additional
federal criminal statutes that prohibit, among other things, knowingly and willfully executing, or attempting to execute, a scheme to
defraud or to obtain, by means of false or fraudulent pretenses, representations or promises, any money or property owned by, or under
the control or custody of, any healthcare benefit program, including private third-party payors, willfully obstructing a criminal investigation
of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up by trick, scheme or device, a material fact
or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits,
items or services. Accordingly, HIPAA imposes criminal and civil liability for, among other things, executing a scheme or making materially
false statements in connection with the delivery of or payment for health care benefits, items or services. Like the Anti-Kickback Statute,
the ACA amended the intent standard for certain healthcare fraud statutes 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.

Also, many states have similar,
and typically more prohibitive, fraud and abuse statutes or regulations that apply to items and services reimbursed under Medicaid and
other state healthcare programs, or, in several states, apply regardless of the payor.

Pharmaceutical companies may
be subject to data privacy and security regulations by both the federal government and the states in which they conduct business. HIPAA,
as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, and its implementing regulations, imposes
requirements on “covered entities,” including certain healthcare providers, health plans, and healthcare clearinghouses, as
well as their respective “business associates” that create, receive, maintain or transmit individually identifiable health
information for or on behalf of a covered entity as well as their covered subcontractors relating to the privacy, security and transmission
of individually identifiable health information. Among other things, HITECH makes HIPAA’s privacy and security standards directly
applicable to business associates, independent contractors, including subcontractors, or agents of covered entities that receive or obtain
protected health information, or PHI, in connection with providing a service on behalf of a covered entity. HITECH also created four new
tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates and gave
state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce HIPAA and seek attorneys’
fees and costs associated with pursuing federal civil actions. In addition, many state laws, for example, Washington’s My Health
My Data Act and the California Consumer Privacy Act of 2018, or CCPA, as amended by the California Privacy Rights Act, or CPRA, govern
the privacy and security of health information in specified circumstances, many of which differ from each other in significant ways, are
often not pre-empted by HIPAA, and may have a more prohibitive effect than HIPAA, thus complicating compliance efforts.

The National Security Division
of the DOJ issued a new rule referred to as the Data Security Program, or DSP, to implement Executive Order 14117 aimed at preventing
access to “bulk U.S. sensitive personal data” and “government-related data” by “countries of concern”
(including China, Russia, Iran, North Korea, Cuba, and Venezuela) and “covered persons” (as all such terms are defined in
the DSP). Effective as of April 8, 2025, the DSP imposes stringent obligations on companies within its scope and prohibits or restricts
“covered data transactions” that grant countries of concern or covered persons access to bulk U.S. sensitive personal data
or any amount of government-related data.

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Under currently applicable
U.S. law, certain products not usually self-administered (including injectable drugs) may be eligible for coverage under Medicare through
Medicare Part B. Medicare Part B is part of original Medicare, the federal health care program that provides health care benefits to the
aged and disabled, and covers outpatient services and supplies, including certain biopharmaceutical products, that are medically necessary
to treat a beneficiary’s health condition. As a condition of receiving Medicare Part B reimbursement for a manufacturer’s
eligible drugs, the manufacturer is required to participate in other government healthcare programs, including the Medicaid Drug Rebate
Program and the 340B Drug Pricing Program. The Medicaid Drug Rebate Program requires pharmaceutical manufacturers to enter into and have
in effect a national rebate agreement with the Secretary of HHS as a condition for states to receive federal matching funds for the manufacturer’s
outpatient drugs furnished to Medicaid patients. Under the 340B Drug Pricing Program, the manufacturer must extend discounts to entities
that participate in the program.

In addition, many pharmaceutical
manufacturers must calculate and report certain price reporting metrics to the government, such as average sales price, average
manufacturer price and best price. Penalties may apply in some cases when such metrics are not submitted accurately and timely. Further,
these prices for drugs may be reduced by mandatory discounts or rebates required by government healthcare programs or private payors and
by any future relaxation of laws that presently restrict imports of drugs from countries where they may be sold at lower prices than in
the U.S. It is difficult to predict how Medicare coverage and reimbursement policies will be applied to a pharmaceutical company’s
products in the future and coverage and reimbursement under different federal healthcare programs are not always consistent. Medicare
reimbursement rates may also reflect budgetary constraints placed on the Medicare program.

Additionally, the federal
Physician Payments Sunshine Act, or the Sunshine Act, within the ACA, and its implementing regulations, require that certain manufacturers
of drugs, devices, biological and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health
Insurance Program (with certain exceptions) report annually to CMS information related to certain payments or other transfers of value
made or distributed to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other healthcare
professionals (such as physicians assistants and nurse practitioners), and teaching hospitals, or to entities or individuals at the request
of, or designated on behalf of, the physicians and teaching hospitals and to report annually certain ownership and investment interests
held by physicians and their immediate family members. Failure to report accurately could result in penalties. In addition, many states
also govern the reporting of payments or other transfers of value, many of which differ from each other in significant ways, are often
not pre-empted, and may have a more prohibitive effect than the Sunshine Act, thus further complicating compliance efforts.

In order to distribute products
commercially, pharmaceutical companies must comply with state laws that require the registration of manufacturers and wholesale distributors
of drug and biological products in a state, including, in certain states, manufacturers and distributors who ship products into the state
even if such manufacturers or distributors have no place of business within the state. Some states also impose requirements on manufacturers
and distributors to establish the pedigree of product in the chain of distribution, including some states that require manufacturers and
others to adopt new technology capable of tracking and tracing product as it moves through the distribution chain. Several states and/or
localities have enacted legislation requiring pharmaceutical and biotechnology companies to establish marketing compliance programs, file
periodic reports with the state, make periodic public disclosures on sales, marketing, pricing, clinical trials and other activities,
and/or register their sales representatives, as well as to prohibit pharmacies and other healthcare entities from providing certain physician
prescribing data to pharmaceutical and biotechnology companies for use in sales and marketing, and to prohibit certain other sales and
marketing practices. All of a pharmaceutical company’s activities are potentially subject to federal and state consumer protection
and unfair competition laws.

Ensuring business arrangements
with third parties comply with applicable healthcare laws and regulations is a costly endeavor. If a pharmaceutical company’s operations
are found to be in violation of any of the federal and state healthcare laws described above or any other current or future governmental
regulations that apply to it, it may be subject to penalties, including without limitation, significant civil, criminal and/or administrative
penalties, damages, fines, disgorgement, imprisonment, exclusion from participation in government programs, such as Medicare and Medicaid,
injunctions, private qui tam actions brought by individual whistleblowers in the name of the government, or refusal to allow it to enter
into government contracts, contractual damages, reputational harm, administrative burdens, diminished profits and future earnings, additional
reporting obligations and oversight if it becomes subject to a corporate integrity agreement or other agreement to resolve allegations
of non-compliance with these laws, and the curtailment or restructuring of its operations, any of which could adversely affect its ability
to operate its business and the results of its operations.

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Coverage, Pricing and Reimbursement

Significant uncertainty exists
as to the coverage and reimbursement status of any product candidates for which we may obtain regulatory approval. In the U.S. and in
foreign markets, sales of any products for which a pharmaceutical company receives regulatory approval for commercial sale will depend,
in part, on the extent to which third-party payors provide coverage and establish adequate reimbursement levels for such products. In
the U.S., third-party payors include federal and state healthcare programs, private managed care providers, health insurers and other
organizations. Adequate coverage and reimbursement from governmental healthcare programs, such as Medicare and Medicaid in the U.S., and
commercial payors are critical to new product acceptance.

A pharmaceutical company’s
ability to commercialize any products successfully also will depend in part on the extent to which coverage and reimbursement for these
products and related treatments will be available from government health administration authorities, private health insurers and other
organizations. Government authorities and other third-party payors, such as private health insurers and health maintenance organizations,
decide which therapeutics they will pay for and establish reimbursement levels. Coverage and reimbursement by a third-party payor may
depend upon a number of factors, including the third-party payor’s determination that use of a therapeutic is:

Coverage may also be more
limited than the purposes for which the product is approved by the FDA or comparable foreign regulatory authorities. Reimbursement may
impact the demand for, or the price of, any product for which regulatory approval is obtained.

Third-party payors are increasingly
challenging the price, examining the medical necessity, and reviewing the cost-effectiveness of medical products, therapies and services,
in addition to questioning their safety and efficacy. Obtaining coverage and reimbursement approval of a product from a government or
other third-party payor is a time-consuming and costly process that could require pharmaceutical companies to provide to each payor supporting
scientific, clinical and cost-effectiveness data for the use of a product on a payor-by-payor basis, with no assurance that coverage and
adequate reimbursement will be obtained. A payor’s decision to provide coverage for a product does not imply that an adequate reimbursement
rate will be approved. Further, one payor’s determination to provide coverage for a product does not assure that other payors will
also provide coverage for the product.

Different pricing and reimbursement
schemes exist in other countries. In the European Union, governments influence the price of biopharmaceutical products through their pricing
and reimbursement rules and control of national health care systems that fund a large part of the cost of those products to consumers.
Some jurisdictions operate positive and negative list systems under which products may only be marketed once a reimbursement price has
been agreed. To obtain reimbursement or pricing approval, some of these countries may require the completion of clinical trials that compare
the cost effectiveness of a particular product candidate to currently available therapies. Other member states allow companies to fix
their own prices for medicines but monitor and control company profits. The downward pressure on health care costs has become intense.
As a result, increasingly high barriers are being erected to the entry of new products. In addition, in some countries, cross-border imports
from low-priced markets exert a commercial pressure on pricing within a country.

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Current and Future Healthcare Reform

In the U.S. and some foreign
jurisdictions, there have been, and continue to be, several legislative and regulatory changes and proposed changes regarding the healthcare
system that could prevent or delay marketing approval of product candidates, restrict or regulate post-approval activities and affect
the ability to profitably sell product candidates for which marketing approval is obtained. Among policy makers and payors in the U.S.
and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare
costs, improving quality and/or expanding access. In the U.S., the pharmaceutical industry has been a particular focus of these efforts
and has been significantly affected by major legislative initiatives that directly and indirectly affect manufacturers’ ability
to successfully commercialize approved products and seek government coverage and reimbursement.

Legislative changes have
been proposed and adopted since the ACA was enacted. For example, under the American Rescue Plan Act of 2021, effective January 1, 2024,
the statutory cap on Medicaid Drug Rebate Program rebates that manufacturers pay to state Medicaid programs has been eliminated. Elimination
of this cap has, in some cases, required pharmaceutical manufacturers to pay more in rebates than they have received on the sale of products.
In addition, in 2024, CMS issued a final rule that decreased Medicare reimbursement for physician services by 2.8%, effective January
1, 2025. If federal spending is further reduced, anticipated budgetary shortfalls may also impact the ability of relevant agencies, such
as the FDA, to continue to function at current levels.

Several healthcare reform
proposals culminated in the enactment of the Inflation Reduction Act, or the IRA, in August of 2022, which, among other things, eliminated,
beginning in 2025, the coverage gap under Medicare Part D by significantly lowering the enrollee maximum out-of-pocket costs and requiring
manufacturers to subsidize, through a newly established manufacturer discount program, 10% of Part D enrollees’ prescription costs
for brand drugs below the out-of-pocket limit, and 20% once the out-of-pocket limit has been reached. The IRA also requires HHS to directly
negotiate the selling price of a statutorily specified number of drugs and biologics each year that CMS reimburses under Medicare Part
B and Part D. The negotiated price may not exceed a statutory ceiling price. Only high-expenditure single-source drugs that have been
approved for at least seven years (11 years for single-source biologics) are eligible to be selected by CMS for negotiation, with the
negotiated price taking effect two years after the selection year. For 2026, the first year in which negotiated prices become effective,
CMS selected 10 high-cost Medicare Part D products in 2023, negotiations began in 2024, and the negotiated maximum fair price for each
product has been announced. In addition, CMS selected and announced the negotiated maximum fair price for 15 additional Medicare Part
D drugs, which will become effective in 2027. For 2028, CMS has selected an additional 15 drugs, comprised of drugs covered under Medicare
Part D and, for the first time, drugs under Medicare Part B. For 2029 and subsequent years, 20 Part B or Part D drugs will be selected.
A drug or biological product that has an ODD for only one rare disease or condition will be excluded from the IRA’s price negotiation
requirements, but will lose that exclusion if it receives designations for more than one rare disease or condition, or if is approved
for an indication that is not within that single designated rare disease or condition, unless such additional designation or such disqualifying
approvals are withdrawn by the time CMS evaluates the drug for selection for negotiation. The IRA also imposes rebates on Medicare Part
B and Part D drugs whose prices have increased at a rate greater than the rate of inflation, and in November 2024, CMS finalized regulations
for the Medicare Part B and Part D inflation rebates. The IRA also extended enhanced subsidies for individuals purchasing health insurance
coverage in ACA marketplaces through plan year 2025, but those subsidies expired at the end of 2025. The IRA permits the Secretary of
HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years. Manufacturers that fail to
comply with the IRA may be subject to various penalties, including civil monetary penalties. These provisions may be subject to legal
challenges. For example, the provisions related to the negotiation of selling prices of high-expenditure single-source drugs and biologics
have been challenged in multiple lawsuits brought by pharmaceutical manufacturers. The outcome of these lawsuits is uncertain, and some
IRA drug discount provisions have not been challenged in litigation. Thus, while it is unclear how the IRA will be implemented, it will
likely have a significant impact on the pharmaceutical industry and the pricing of pharmaceutical products.

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The current federal administration is pursuing policies to reduce regulations
and expenditures across government agencies including at HHS, which include the FDA and CMS, and related agencies. These actions include,
for example, directives to reduce agency workforce, which include the FDA and CMS, and related agencies. In addition, on May 12, 2025,
President Trump issued an Executive Order that, among other things, required HHS, within 30 days, to establish and communicate to drug
manufacturers most favored nation, or MFN, price targets designed to bring drug prices for American patients in line with those in comparably
developed nations. If significant progress towards MFN pricing is not achieved, the Executive Order requires HHS to propose a rulemaking
to implement MFN pricing. Recently, on December 23, 2025, CMS issued proposed regulations to establish, under the Center for Medicare
and Medicaid Innovation, or CMMI, two mandatory MFN demonstration models under Medicare Parts B and D, respectively. If these rules or
other MFN pricing rules are finalized, they are likely to reduce prices of at least some drugs in the U.S., if they are also sold in comparably
developed countries. Even if we do not market drugs in such countries, we will be indirectly affected if our drugs competed with drugs
whose prices were reduced as a result of MFN pricing initiatives. Further, as part of the Make America Healthy Again, or MAHA, Commission’s
recent Strategy Report, the federal administration is working across government agencies to increase enforcement on direct-to-consumer
pharmaceutical advertising. These federal administrative actions and policies may significantly reduce U.S. drug prices, potentially
impacting manufacturers’ global pricing strategies and profitability, while increasing their operational costs and compliance risks.

At the state level, legislatures
are increasingly enacting 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. In addition,
the FDA released a final rule in 2020 providing guidance for states to build and submit importation proposals for drugs from Canada. The
FDA authorized the first such plan in Florida in 2024, but the implementation of Florida’s plan has been extended.

The Foreign Corrupt Practices Act

The Foreign Corrupt Practices
Act, or the FCPA, prohibits any U.S. individual or business from paying, offering, or authorizing payment or offering of anything of value,
directly or indirectly, to any foreign official, political party or candidate for the purpose of influencing any act or decision of the
foreign entity in order to assist the individual or business in obtaining or retaining business. The FCPA also obligates companies whose
securities are listed in the U.S. to comply with accounting provisions including maintaining books and records that accurately and fairly
reflect all transactions of the corporation, including international subsidiaries, and to devise and maintain an adequate system of internal
accounting controls for international operations.

Data Privacy and Security Regulations

Numerous state, federal and
foreign laws, regulations and standards govern the collection, transfer, sharing, use, access to, confidentiality and security of health-related
and other personal information, and could apply now or in the future to our operations or the operations of our partners. In the U.S.,
numerous federal and state laws and regulations, including data breach notification laws, health information privacy and security laws
and consumer protection laws and regulations govern the collection, use, disclosure, and protection of health-related and other personal
information. In addition, certain foreign laws govern the privacy and security of personal data, including health-related data. Privacy
and security laws, regulations, and other obligations are constantly evolving, may conflict with each other to complicate compliance efforts,
and can result in investigations, proceedings, or actions that lead to significant civil and/or criminal penalties and restrictions on
data processing.

See “Risk Factors—General
Risk Factors—Pharmaceutical companies are subject to stringent and changing obligations related to data privacy and security. Our
actual or perceived failure to comply with such obligations could lead to regulatory investigations or actions; litigation; fines and
penalties; a disruption of our business operations, including our clinical trials; harm to our reputation; and other adverse effects on
our business or prospects” for additional information about these privacy and security laws, regulations, and other obligations.

Additional Regulation

In addition to the foregoing,
state and federal laws regarding environmental protection and hazardous substances, including the Occupational Safety and Health Act,
the Resource Conservancy and Recovery Act and the Toxic Substances Control Act, affect a pharmaceutical company’s business. These
and other laws govern the use, handling and disposal of various biological, chemical and radioactive substances used in, and wastes generated
by operations.

If our operations result
in contamination of the environment or expose individuals to hazardous substances, we could be liable for damages and governmental fines.
We believe that we are in material compliance with applicable environmental laws and that continued compliance therewith will not have
a material adverse effect on our business. We cannot predict, however, how changes in these laws may affect our future operations.

37

Other Regulations

Pharmaceutical companies
are also subject to numerous federal, state and local laws relating to such matters as safe working conditions, manufacturing practices,
environmental protection, fire hazard control and disposal of hazardous or potentially hazardous substances. Pharmaceutical companies
may incur significant costs to comply with such laws and regulations now or in the future.

Employees

As of December 31, 2025,
we had 51 employees, 46 of whom were full-time employees and five of whom were temporary employees. As of December 31, 2025, 29 of our
employees were engaged in research and development activities and 22 of our employees were engaged in administrative support, business
development, finance, human resources, information systems, legal, or market development. As of December 31, 2025, all of our employees
were located in the U.S. None of our U.S. employees are represented by any collective bargaining agreements. We believe that we maintain
good relations with our employees.

Corporate Information

On January 9, 2020, Protara
Therapeutics, Inc. (formerly ArTara Therapeutics, Inc., formerly Proteon Therapeutics, Inc., or the Company or Protara), and privately-held
ArTara Subsidiary, Inc., or Private ArTara, completed the merger and reorganization, or the Merger, in accordance with the terms of the
Agreement and Plan of Merger and Reorganization, dated September 23, 2019, or the Merger Agreement, by and among the Company, Private
ArTara and REM 1 Acquisition, Inc., a wholly owned subsidiary of the Company, or Merger Sub, whereby Merger Sub merged with and into Private
ArTara, with Private ArTara surviving as a wholly owned subsidiary of the Company. The Merger was structured as a reverse merger and Private
ArTara was determined to be the accounting acquirer based on the terms of the Merger and other factors.

We were originally incorporated
in Delaware in March 2006, and at that time, acquired Proteon Therapeutics, LLC, the predecessor of Protara, which was formed in June
2001.

Our principal executive offices
are located at 345 Park Avenue South, 3rd Floor, New York, New York 10010, our telephone number is (646) 844-0337 and our website
address is www.protaratx.com. The contents of our website are not incorporated into this Annual Report on Form 10-K and our reference
to the URL for our website is intended to be an inactive textual reference only. The information contained on, or that can be accessed
through, our website is not a part of this document.

Unless the context requires
otherwise, references in this Annual Report on Form 10-K to “Protara”, “TARA”, “we”, “us”,
the “Company” and “our” refer to Protara Therapeutics, Inc. and our subsidiaries.

Available Information

Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the
Exchange Act, will be made available free of charge on our website as soon as reasonably practicable after we electronically file such
material with, or furnish it to, the SEC.