10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2023

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to

Commission File Number 001-38890

Quince Therapeutics, Inc.

(Exact name of registrant as specified in its Charter)

Delaware	90-1024039
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
611 Gateway Boulevard, Suite 273 South San Francisco, California	94080
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (415) 910-5717

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	QNCX	The Nasdaq Stock Market LLC
Series A Junior Participating Preferred Purchase Rights	N/A	The Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control

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

its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The aggregate market value of the common stock held by non-affiliates of the registrant as of June 30, 2023 (the last business day of the registrant’s most recently completed second fiscal quarter) was approximately $50 million, based on the closing price of the registrant’s common stock, as reported by the Nasdaq Global Select Market on June 30, 2023 of $1.505 per share.

The number of shares of the registrant’s common stock outstanding as of March 25, 2024 was 43,215,233.

DOCUMENTS INCORPORATED BY REFERENCE

Part III incorporates by reference certain information from the registrant’s definitive proxy statement (the “Proxy Statement”) relating to its 2024 Annual Meeting of Stockholders. The Proxy Statement will be filed with the United States Securities and Exchange Commission within 120 days after the end of the fiscal year to which this report relates.

Table of Contents

		Page
PART I
Item 1.	Business	8
Item 1A.	Risk Factors	32
Item 1B.	Unresolved Staff Comments	81
Item 1C.	Cybersecurity	81
Item 2.	Properties	83
Item 3.	Legal Proceedings	83
Item 4.	Mine Safety Disclosures	83
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	84
Item 6.	Reserved	84
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	85
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	96
Item 8.	Financial Statements and Supplementary Data	97
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	135
Item 9A.	Controls and Procedures	135
Item 9B.	Other Information	136
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	136
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	137
Item 11.	Executive Compensation	137
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	137
Item 13.	Certain Relationships and Related Transactions, and Director Independence	137
Item 14.	Principal Accountant Fees and Services	137
PART IV
Item 15.	Exhibits and Financial Statement Schedules	138
Item 16	Form 10-K Summary	138

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Special Note Regarding Forward-Looking Statements

This Annual Report on Form 10-K contains forward-looking statements. All statements other than statements of historical facts contained in this report, including statements regarding our future results of operations and financial position, business strategy, drug candidates, planned preclinical studies and clinical trials, research and development costs, regulatory approvals, timing and likelihood of success, as well as plans and objectives of management for future operations, are forward-looking statements. In some cases, forward-looking statements may be identified by words such as "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "could," "would," "expect," "objective," "plan," "potential," "seek," "grow," "target," "if," and similar expressions intended to identify forward-looking statements.

We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives and financial needs. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions, including risks described in the section titled “Risk Factors” set forth in Part I, Item 1A of this Annual Report on Form 10-K and in our other filings with the Securities and Exchange Commission (the "SEC"). It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this Annual Report on Form 10-K may not occur, and actual results may differ materially and adversely from those anticipated or implied in the forward-looking statements. Forward-looking statements contained in this Annual Report on Form 10-K include, but are not limited to, statements about:

•our ability to successfully execute on our current strategic direction;

•our ability to successfully integrate EryDel;

•future research and development activities, including the scope, success, cost and timing of any future development activities, preclinical studies and clinical trials, including clinical trials of EryDex or other pipeline compounds we advance through the drug development process;

•the timing and focus of any potential future clinical trials, and the reporting of data from those trials;

•our ability and timing of seeking and obtaining FDA and any other regulatory approvals for our drug candidates;

•the willingness of the FDA or other regulatory authorities to accept any future completed or planned clinical and preclinical studies and other work, as the basis for review and approval of our drug candidates for their respective indications;

•whether regulatory authorities determine that additional trials or data are necessary in order to accept a new drug application for review and/or approval;

•the ability of any future clinical trials to demonstrate safety and efficacy of our EryDex and other drug candidates, and other positive results;

•our financial performance;

•the sufficiency of our existing cash and cash equivalents to fund our future operating expenses and capital expenditure requirements;

•the accuracy of our estimates regarding expenses, future revenue, capital requirements, and needs for additional financing;

•our expectations related to the use of our available cash;

•our ability to obtain funding for our operations, including funding necessary to develop and commercialize our drug candidates;

•our expectations regarding the potential market size and the size of the patient populations for our drug candidates, if approved for commercial use, and the potential market opportunities for commercializing our drug candidates;

•our plans relating to commercializing our drug candidates, if approved;

•our plans and ability to establish sales, marketing and distribution infrastructure to commercialize any drug candidates for which we obtain approval;

•our ability to attract and retain key scientific and clinical personnel, in light of recent management changes and reduction in force;

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•our ability to contract with third-party suppliers and manufacturers and their ability to perform adequately;

•our reliance on third parties to conduct clinical trials of our drug candidates, and for the manufacture of our drug candidates for preclinical studies and clinical trials;

•dependence upon the integrity of our supply chain, including multiple single-source suppliers;

•our reliance on third-party suppliers for certain of our raw materials and components;

•our ability to expand our drug candidates into additional indications and patient populations;

•the success of competing therapies that are or may become available;

•the beneficial characteristics, safety and efficacy of our drug candidates;

•governmental or regulatory delays, information requests, clinical holds, and regulatory developments in the United States and other jurisdictions;

•our ability to obtain and maintain regulatory approval of our drug candidates, and any related restrictions, limitations and/or warnings in the label of any approved drug candidate;

•our ability to obtain and maintain CE Certificates of conformity for the medical device components of our EryDex System in accordance with applicable legislation governing medical devices;

•our ability to transition CE Certifications under the previous Medical Device Directive, to a regulatory framework under MDR;

•our plans and ability to obtain or protect intellectual property rights, including extensions of existing patent terms where available;

•the scope of protection we are able to establish and maintain for intellectual property rights covering our drug candidates and technology;

•potential claims relating to our intellectual property; and

•our ability to grow our organization and increase the size of our facilities to meet our anticipated growth.

We caution you that the foregoing list may not contain all of the forward-looking statements made in this Annual Report on Form 10-K.

You should not rely upon forward-looking statements as predictions of future events. The events and circumstances reflected in the forward-looking statements may not be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by law, we do not intend to update any of these forward-looking statements after the date of this Annual Report on Form 10-K or to conform these statements to actual results or revised expectations.

You should read this Annual Report on Form 10-K with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially different from what we expect.

This Annual Report on Form 10-K contains estimates, projections and other information concerning our industry, our business and the markets for our drug candidates. We obtained the industry, market and similar data set forth in this report from our own internal estimates and research and from academic and industry research, publications, surveys and studies conducted by third parties, including governmental agencies. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances that are assumed in this information. While we believe that the data we use from third parties are reliable, we have not separately verified these data. Further, while we believe our internal research is reliable, such research has not been verified by any third party. You are cautioned not to give undue weight to any such information, projections and estimates.

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Summary of Risk Factors

We may be unable for many reasons, including those that are beyond our control, to implement our business strategy successfully. The occurrence of any single risk or any combination of risks could materially and adversely affect our business, financial condition, results of operations, cash flows and the trading price of our common stock. Some of these risks are:

•We may experience difficulties integrating Quince and EryDel’s operations and realizing the expected benefits of the EryDel Acquisition.

•We are substantially dependent on the success of our lead drug candidate, EryDex. The Phase 3 NEAT clinical trial of EryDex for A-T will be conducted under a protocol negotiated with FDA by EryDel and our execution of the trial may be delayed, may not be successful, and may not result in NDA approval, with adverse results for our business and share price.

•We have no drug candidates approved for commercial sale, we have never generated any revenue from sales, and we may never be profitable.

•We will require additional capital to fund development of EryDex.

•We may be required to make milestone payments to EryDel shareholders or pursuant to the EIB Facility in connection with our development and commercialization of EryDex, which could adversely affect the overall profitability of EryDex, if approved.

•Clinical drug development is a lengthy, expensive and uncertain process. The results of preclinical studies and early clinical trials are not always predictive of future results. Any drug candidate that we may advance into clinical trials may not achieve favorable results in later clinical trials, if any, or receive marketing approval.

•Results in earlier clinical trials may not be indicative of the results that may be obtained in further registrational clinical trials, which may delay or prevent obtaining regulatory approval.

•We will incur additional costs and may experience delays in completing, or ultimately be unable to complete, the development and commercialization of our drug candidates.

•Our drug candidates may cause or have attributed to them undesirable side effects or have other properties that delay or prevent their regulatory approval or limit their commercial potential.

•Clinical trials of our drug candidates may not uncover all possible AEs that patients may experience.

•If we are not able to successfully demonstrate a favorable differentiation between EryDex and currently available corticosteroids, our business would be harmed and our ability to generate revenue from that class of drugs would be severely impaired.

•Because the potential rare disease target patient populations of EryDex are small, and the addressable patient population even smaller, we may not be able to effectively complete clinical trials or commercialize the drug candidate.

•We are a clinical stage biotechnology company with a limited operating history, which may make it difficult to evaluate the prospects for our future viability.

•We will require substantial additional funding to finance our operations and discover and develop drug candidates. If we are unable to raise this funding when needed or on acceptable terms, we may be forced to delay, reduce or eliminate our drug development programs or other operations.

•We cannot be certain that the FDA or foreign regulatory authorities will permit us to proceed with any current or future proposed clinical trial designs. Our drug candidates may not receive regulatory approval, and without regulatory approval we will not be able to market our drug candidates.

•Clinical failure can occur at any stage of clinical development and we have never submitted an NDA or comparable foreign applications before.

•Clinical trials of our drug candidates have in the past been put on clinical holds by, and failed to demonstrate safety and efficacy to the satisfaction of, the FDA, and if any future clinical trials of our drug candidates are put on clinical holds by, or fail to demonstrate safety and efficacy to the satisfaction of, the FDA, the EMA, or similar regulatory authorities

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outside the United States, or do not otherwise produce positive results, we may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our drug candidates.

•We currently rely and expect to continue to rely on third parties to conduct some of our preclinical studies and clinical trials and some aspects of our research and preclinical testing and on third-party contract manufacturing organizations to manufacture and supply our preclinical, clinical and commercial materials, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials, research, manufacturing or testing.

•If we or any of our third-party manufacturers or suppliers encounter difficulties in production of our future drug candidates, or fail to meet rigorously enforced regulatory standards, our ability to provide supply of our future drug candidates for clinical trials or for patients, if approved, could be delayed or stopped, or we may be unable to maintain a commercially viable cost structure.

•If, in the future, we are unable to establish sales and marketing capabilities or enter into agreements with third parties to sell and market any drug candidates we may develop, we may not be successful in commercializing those drug candidates if and when they are approved.

•If we are unable to obtain and maintain sufficient intellectual property protection for our current drug candidates, any future drug candidates, and other proprietary technology we develop, or if the scope of the intellectual property protection is not sufficiently broad, our competitors could develop and commercialize drug candidates similar or identical to ours, and our ability to successfully commercialize our current drug candidate, if approved, any future drug candidates, and other proprietary technologies if approved, may be adversely affected.

•Our stockholders may realize little or no value from the divesture of our legacy assets, and as a result our stock price may decline, we could be subject to litigation, and our business may be adversely affected.

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DEFINED TERMS

Unless the context requires otherwise, references to “Quince,” “the Company,” “we,” “us,” or “our” in this Annual Report on Form 10-K refer to Quince Therapeutics, Inc. and its consolidated subsidiaries. We also have used several other terms in this Annual Report on Form 10-K, most of which are explained or defined below.

Abbreviated Term	Defined Term
2017 Tax Act	Tax Cuts and Jobs Act of 2017
3PLs	Third-party Logistics Providers
AE	Adverse Event
AIA	Leahy-Smith America Invents Act
AIDE	Autologous Intracellular Drug Encapsulation
ANDA	Abbreviated New Drug Application
ARB	Angiotensin Receptor Blockers
ASC	Accounting Standards Codification
ASU	Accounting Standards Update
A-T	Ataxia-Telangiectasia
ATTeST	Ataxia Telangiectasia Trial with the EryDex SysTem
CARES Act	Coronavirus Aid, Relief, and Economic Security Act
C-GIC	Clinical Global Impression of Change
GMP	Current Good Manufacturing Practice
Cmax	The highest (peak) concentration of a drug in the bloodstream or other part of the body after drug administration
CMC	Chemistry Manufacturing Controls
CMO	Contract Manufacturing Organization
CMS	Center for Medicare and Medicaid Services
the Code	Internal Revenue Code of 1986, as amended
COSO framework	Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission
COVID-19	Coronavirus disease
CPA	Certified Public Accountant
Credits	Tax credits
CRO	Contract Research Organization
CTA	Clinical Trial Application
DOJ	United States Department of Justice
DSMB	Data Safety Monitoring Board
DSP	Dexamethasone Sodium Phosphate
EC	European Commission
EMA	European Medicines Agency
EryDel	EryDel S.p.A.
EryDex	Red blood cell encapsulated dexamethasone sodium phosphate
EU	European Union
EryKit	Consumable treatment kit that provides EryDex
Exchange Act	Securities Exchange Act of 1934
FASB	Financial Accounting Standards Board
FCPA	Foreign Assets Controls, the United States Foreign Corrupt Practices Act of 1977
FDA	United States Food and Drug Administration
FFDCA	Federal Food, Drug, and Cosmetic Act
GAAP	accounting principles generally accepted in the United States
GCP	Good Clinical Practice
GDPR	General Data Protection Regulation
GLP	Good Laboratory Practice
GMP	Good Manufacturing Practice
HHS	United States Department of Health and Human Services

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HIPAA	Health Insurance Portability and Accountability Act of 1996
HITECH	Health Information Technology for Economic and Clinical Health Act of 2009
HPA	Hypothalamic-Pituitary-Adrenal (HPA) Axis
HTA	Health Technology Assessment
ICARS	International Cooperative Ataxia Rating Scale
IND	Investigational New Drug
IPO	Initial Public Offering
IPR&D	In-process Research and Development
IRA	Inflation Reduction Act of 2022
IRB	Institutional Review Board
ITT	Intent To Treat
Jefferies	Jefferies LLC
Lighthouse	Lighthouse Pharmaceuticals, Inc.
LSM	Least Square Mean
MAA	Marketing Authorization Application
MAD	Multiple Ascending Dose
MDD	Medical Devices Directive
MDR	Medical Devices Regulation 2017/745
mICARS	Modified International Cooperative Ataxia Rating Scale
MHRA	United Kingdom Medicines and Healthcare Products Regulatory Agency
MPEEM	Multi-Period Excess Earnings Method
Nasdaq	The Nasdaq Stock Market LLC
NCE	New Chemical Entity
NDA	New Drug Application
NEAT	EryDex Phase 3 Trial (Neurologic Effects of EryDex on Subjects with A-T)
NIH	National Institute of Health
NOL	Net Operating Loss
Novosteo	Novosteo, Inc.
PCAOB	Public Company Accounting Oversight Board
PCT	Patent Cooperation Treaty
PD	Pharmacodynamic
PDMA	Prescription Drug Marketing Act
Process solutions	(Hypotonic Solutions 1& 2 and Hypertonic Solution PIGPA) sterile solutions to allow drug encapsulation and restoring the physiological osmolarity during EryDex process
PDUFA	Prescription Drug User Fee Act
PP	Per Protocol Population is all patients who enrolled into the study and fulfilled all inclusion/exclusion criteria, did not have any major protocol violations, and completed the initial treatment period of the study as planned.
PK	Pharmacokinetic
PMDA	Pharmaceutical and Medical Devices Agency of Japan
PPACA	Patient Protection and Affordable Care Act as amended by the Health Care and Education Reconciliation Act of 2010
PRF	Purdue Research Foundation
PTE	Patent Term Extension
R&D	Research and Development
RCL	Red Cell Loader, the machine that encapsulates drug into red blood cells
Registrational or pivotal trial	An adequate and well-controlled trial designed to be sufficient to apply for regulatory approval of a drug candidate, although notwithstanding the Company’s design a regulatory agency may determine that further clinical studies or data are required
RmICARS	Rescored modified International Cooperative Ataxia Rating Scale
RBC	Red Blood Cell
RSA	Restricted Stock Awards
RSU	Restricted Stock Units
SAD	Single Ascending Dose
SAE	Serious Adverse Event
Sarbanes-Oxley Act	The Sarbanes-Oxley Act of 2002
SEC	United States Securities and Exchange Commission

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Securities Act	Securities Act of 1933
SPA	Special Protocol Assessment
Syringe Kit	Device for anticoagulated blood collection and for the sterile connection to the EryKit
TEAE	Treatment-Emergent Adverse Effect
UPC	Unified Patent Court
USPTO	The United States Patent and Trademark Office
VA	Veterans Affairs

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PART I

Item 1. Business.

Overview

Effective August 1, 2022, the Company, previously named Cortexyme, Inc. ("Cortexyme"), changed its name to Quince Therapeutics, Inc. (“Quince”, the “Company”, “we”, “us” or “our”). The Company was incorporated in the State of Delaware in June 2012 and is headquartered in South San Francisco, California. From inception, we have been focused on novel therapeutic approaches to improve the lives of patients with major, unmet medical needs. The Company was initially founded on the seminal discovery of the presence of Porphyromonas gingivalis, and its secreted toxic virulence factor proteases, called gingipains, in the relevant brain areas of both Alzheimer's and Parkinson's disease patients.

In May 2022, we completed the acquisition of Novosteo, a Delaware corporation, a privately held biotechnology company focused on targeted therapeutics to treat rare skeletal diseases, bone fractures and injury. The acquisition of Novosteo (the “Novosteo Acquisition”) and the addition of new executive management precipitated a strategic shift in our focus. In August 2022, we also announced our intent to actively seek compelling clinical-stage assets available for in-licensing and acquisition to expand our development pipeline with a focus on acquiring, developing, and commercializing innovative therapeutics for patients suffering from debilitating and rare diseases.

On January 30, 2023, we announced that we intended to prioritize capital resources toward the expansion of our development pipeline through opportunistic in-licensing and acquisition of clinical-stage assets targeting debilitating and rare diseases.

On October 20, 2023, we completed our acquisition of EryDel, a privately held, late-stage biotechnology company (the “EryDel Acquisition”) with a proprietary AIDE technology platform and Phase 3 lead asset, EryDex, that targets the potential treatment of a rare neurodegenerative disease, A-T, for which there are currently no approved treatments in any global market. EryDel is a variable interest entity and the Company is the primary beneficiary and sole shareholder. In addition, there are no restrictions on the use of the assets of EryDel.

We are a late-stage biotechnology company dedicated to harnessing the power of a patient’s own biology to deliver innovative therapies to those living with rare diseases.

Our proprietary AIDE technology platform is an innovative drug/device combination that uses an automated process designed to encapsulate a drug into the patient’s own red blood cells. Red blood cells have several characteristics that make them a potentially ideal vehicle for drug delivery, including potentially better tolerability, enhanced tissue distribution, reduced immunogenicity, and prolongation of circulating half-life. Our AIDE technology is designed to harness these benefits to allow for new and improved therapeutic options for patients living with high unmet medical needs. The AIDE technology platform is believed to confer several benefits over conventional therapies and can be applied to a broad range of small or large molecule drugs and biologics. Our Phase 3 lead asset, EryDex, leverages our AIDE technology to encapsulate DSP into a patient’s own red blood cells, and is targeted to treat a rare pediatric neurodegenerative disease, A-T. We expect to begin enrollment in a Phase 3 NEAT clinical trial of EryDex in A-T in the second quarter of 2024.

By pioneering the delivery of a drug encapsulated in a patient’s own red blood cells, we seek to advance proprietary therapeutics that hold the potential to redefine the standard of care and meaningfully improve the quality of life for patients with rare disease.

Strategy

We believe we are well-capitalized into 2026 and intend to focus our development expertise and financial resources toward the advancement of our proprietary AIDE technology platform and Phase 3 lead asset, EryDex. As of December 31, 2023, we had $75.1 million in cash, cash equivalents, and investments.

EryDex is the first drug in development that leverages our AIDE technology and is composed of DSP encapsulated in autologous red blood cells for the treatment of a rare pediatric neurodegenerative disease called A-T. DSP is a corticosteroid well described for its anti-inflammatory properties, but coupled with significant adverse effects, including potential long-term adverse effects due to adrenal suppression. EryDex is designed to maintain the known efficacy of corticosteroids but reduce or eliminate the significant adverse effects that accompany chronic use of corticosteroid treatment. Currently, there are no approved treatments for A-T and the global market, based on our internal estimates and assumptions, represents a $1+ billion peak commercial opportunity. We believe this makes EryDex an ideal lead asset to demonstrate the clinical and commercial potential of our AIDE technology.

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Our strategic priority is to complete the Phase 3 clinical trial of EryDex, called NEAT (Neurologic Effects of EryDex on Subjects with A-T; NCT06193200 / IEDAT-04-2022) to evaluate its safety and efficacy for the potential treatment of A-T. We also will investigate additional indications for EryDex and new pipeline programs using our AIDE technology platform. These priorities include the following activities and corporate milestones:

•Complete start up activities for our Phase 3 NEAT clinical trial by the end of second quarter of 2024.

•Enroll the first patient in our Phase 3 NEAT clinical trial in the second quarter of 2024.

•Report our Phase 3 NEAT clinical trial top-line results in the second half of 2025.

•Prepare for a U.S. NDA submission in 2026, provided we obtain positive NEAT study results.

•Pursue potential strategic partnerships to out-license ex U.S. regional territories to extend operational runway to support potential NDA approval of EryDex, as well as further advance other potential indications and programs discovered using the AIDE platform.

We benefit from a strong senior leadership team who possess a wide range of biotech expertise that encompasses all stages of drug development, regulatory submission and approval, and commercialization. Our team has previously been involved in drug programs that resulted in numerous FDA approvals, founded and sold companies, and participated in various public and private financings that resulted in hundreds of millions of dollars of company investment, in addition to a number of successful exits that generated billions of dollars in shareholder value. We believe this breadth of experience will meaningfully benefit the Company as we work to successfully execute our strategic priorities.

Fiscal Year 2023 Key Events

•On January 27, 2023, we sold our legacy small molecule protease inhibitor portfolio, including COR588, COR388, COR852, and COR803, pursuant to an asset purchase agreement with Lighthouse.

•On January 30, 2023, we announced our intention to prioritize capital resources toward the expansion of our development pipeline through opportunistic in-licensing and acquisition of clinical-stage assets targeting debilitating and rare diseases. Our plans also called for the out-licensing of our bone-targeting drug platform and precision bone growth molecule NOV004 designed for accelerated fracture repair in patients with bone fractures and osteogenesis imperfecta. In conjunction with this action, we approved a cost reduction program to align operations with changes in our corporate strategy. This resulted in an approximate 47% reduction in our workforce that was completed by April 2023 and incurred expenses of approximately $0.4 million. We approved the related mutual termination of License Agreement for our bone-targeting drug platform and precision bone growth molecule NOV004 with PRF effective as of October 31, 2023.

•On October 20, 2023, we completed the acquisition of EryDel, a privately held, late-stage biotechnology company with a proprietary AIDE technology platform and Phase 3 lead asset, EryDex, that targets the potential treatment of a rare pediatric neurodegenerative disease, A-T.

Proprietary AIDE Technology Platform

Our proprietary AIDE technology platform is a novel drug/device combination that uses an automated process designed to encapsulate a drug into the patient’s own red blood cells. Red blood cells have several characteristics that make them a potentially ideal vehicle for drug delivery, including potentially better tolerability, enhanced tissue distribution, reduced immunogenicity, and prolongation of circulating half-life. Our AIDE technology is designed to harness these benefits to allow for the chronic administration of drugs that have limitations due to toxicity, poor biodistribution, suboptimal pharmacokinetics, or immune response. In this way, the flexibility of our AIDE technology is believed to confer several benefits over conventional therapies and can be applied to a broad range of small or large molecule drugs and biologics. Additionally, the AIDE technology’s use of autologous red blood cells in the encapsulation process is different from standard cell therapies, such as synthetic or engineered cells, as well as distinct from typical blood transfusions that utilize donor red blood cells for drug administration to the patient. The use of autologous blood may minimize safety risks associated with the use of donor blood and may reduce the potential immunogenic risks associated donor cells and synthetic cell therapies.

The AIDE technology drug/device combination consists of a specialized automated equipment called the RCL, a sterile single-use consumable treatment kit called EryKit, Syringe Kit, drug, and process solutions.

The RCL is a proprietary CE marked non-invasive device that allows blood processing at the point of care. With a user-friendly touch screen interface, the RCL automates the AIDE process technology by handling the blood, drug, and processing solutions with the use of the proprietary EryKit. Our EryKit is a CE marked medical device that provides the essential single-use components for

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loading the patient’s red blood cells with a variety of drugs by using the RCL. The RCL, EryKit, and Syringe Kit have been CE marked in accordance with the MDR. Process solutions (Hypotonic Solution 1&2 and Hypertonic Solution PIGPA) are proprietary sterile solutions, CE marked according to the MDD, aimed to create suitable osmotic condition during the process to allow the drug diffusion into red blood cells and the subsequent restoring of physiological condition.

The automated AIDE process and treatment is designed to be completed at the point-of-care and includes a series of steps which take approximately two hours from start to finish. This process includes:

•Collection of 50mL of a patient’s blood using our proprietary Syringe Kit.

•Processing the patient's collected blood in the RCL using our proprietary EryKit.

•Autologous red blood cells in the RCL are swollen and their pores are “opened” in two steps using two sequential hypotonic process solutions.

•Drug is added to the RCL and enters into the opened red blood cells.

•Physiological osmotic conditions are then restored by adding a hypertonic solution that “reseals” the red blood cells.

•Drug that is not encapsulated during the process is removed by extensive washing with an injectable saline solution.

•Upon completion of the AIDE process, the drug encapsulated red blood cells are infused into the patient.

Potential Benefits of Red Blood Cell Encapsulated Drug Delivery

Many efficacious drugs have limited therapeutic potential because of dose limiting toxicity, while other drugs may have efficacy ceilings due to inferior biodistribution, pharmacokinetics and pharmacodynamics. Our proprietary AIDE technology uses an automated process designed to encapsulate a drug into the patient’s own red blood cells to deliver a therapy in a potentially more effective and safer way. Autologous red blood cells have several characteristics that make them an ideal vehicle for drug delivery:

•Potential for improved biodistribution as encapsulated drug in autologous red blood cells is designed to enable the slow release of the drug from the red blood cells traversing through the body, various tissue beds, and many capillaries for desired therapeutic effect.

•Potential for altered pharmacokinetics and pharmacodynamics, including long circulating half-life, and altered or improved tissue distribution. The altered pharmacokinetics and pharmacodynamics of the encapsulated drug delivery enabled by autologous red blood cells may significantly increase the desired therapeutic effect and/or improve the safety profile of the therapy.

•Potential for improved biocompatibility through the use of autologous red blood cells to, thereby avoiding issues with donor compatibility.

•Potential for the encapsulation of small or large molecules, peptides, and proteins inside of autologous red blood cells to limit biodegradability, thereby altering the encapsulated drug’s metabolism and degradation.

•Potential for significantly decreasing adverse effects of treatments.

New Indications and Program Expansion Potential

The flexibility of the AIDE platform is believed to confer several potential benefits over conventional therapies and can be applied to a broad range of drugs ranging from small to large molecules, as well as biologics. Potential benefits include better tolerability, enhanced tissue distribution, reduced immunogenicity, and prolongation of circulating half-life which we believe could be an advantage for treating patients.

We intend to investigate other potential indications for EryDex where chronic corticosteroid treatment is – or has the potential to become – a standard of care if there were not corticosteroid-related safety concerns. This evaluation process spans across ataxia, neuromuscular, hematology, cancer, and autoimmune disease indications with a focus on rare diseases. To support this drug development pipeline expansion in a capital efficient structure, we would prioritize an investigator initiated clinical trial approach to evaluate EryDex for other potential rare disease indications. In addition, we intend to evaluate additional potential applications of the AIDE technology platform using drugs and biologics targeted at rare and debilitating diseases to further expand our drug development pipeline.

Our AIDE technology platform reflects more than 20 years of innovation and approximately $100 million of investment, which has resulted in innovation that creates high barriers to competitive entry. The RCL, EryKit, Syringe Kit, and process solutions are proprietary products and CE marked in the EU, in accordance with the MDR and MDD.

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Phase 3 Lead Asset – EryDex for the Potential Treatment of A-T

EryDex is the first drug in development that leverages our AIDE technology and is composed of DSP encapsulated in autologous red blood cells targeted to treat a rare pediatric neurodegenerative disease, A-T. We call this drug/device combination the EryDex System.

A-T Background and Prevalence

A-T is an inherited autosomal recessive neurodegenerative and immunodeficiency disorder caused by mutations in ATM gene, which is responsible for cell homeostatic and cell division functions including but not limited to double-stranded DNA repair.

Typically, A-T is first diagnosed before the age of five as children begin to develop an altered gait and fall with greater frequency. Neurological symptoms worsen and patients with A-T frequently become wheelchair-bound by adolescence. Teenage years for patients with A-T are typically marked by repeated infections, pulmonary impairment, and malignancies. The median lifespan is approximately 25 to 30 years old with mortality due to infections and malignancy.

We estimate that there are approximately 5,000 patients with A-T in the U.S. and approximately 5,000 patients with A-T in the UK and EU4 countries. There are currently no approved therapeutic treatments in any global market for A-T.

Limitations of Chronic Corticosteroid Administration

DSP is a corticosteroid well known for its anti-inflammatory properties as well as its dose-limiting toxicity due to adrenal suppression. Our AIDE technology is designed to encapsulate DSP in a patient’s own red blood cells and to alter the biodistribution, pharmacokinetics, and pharmacodynamics of the DSP allowing for both effective and safe treatment.

The optimal efficacy of corticosteroids is the result of two pharmacokinetic characteristics: 1) an initial bolus to achieve a high Cmax that results in high levels of corticosteroid receptor occupation; and 2) sufficient sustained tissue concentrations that allow for continued receptor site occupancy over time.

In order for a conventional corticosteroid to achieve these characteristics, the drug must be dosed frequently, typically daily. Long-term daily dosing regimens sufficient to ensure efficacy lead to significant and debilitating long-term adverse effects associated with HPA axis suppression. Based on many years of patients being dosed monthly with EryDex, the EryDex therapy may avoid these long-term safety concerns that are a major impediment to the chronic administration of corticosteroids. Corticosteroid therapy without significant long-term safety liabilities would represent a major advancement in the potential treatment of many chronic diseases where corticosteroids are already known to be beneficial.

 

Note: Information represented does not reflect a completed comparative study of EryDex versus oral/IV administration of DSP, but rather provides a comparison of published corticosteroid pharmacokinetic information relative to company data regarding EryDex. IC50 and SC50 refer to pharmacodynamic parameters of which IC50 reflects drug concentration eliciting 50% of the maximum inhibition and SC50 reflects drug concentration eliciting 50% of the maximum stimulation. References: Company prior Phase 3 ATTeST clinical trial data (ClinicalTrials.gov ID: NCT02770807); Montanha et al, Frontiers in Pharmacology (2022) 13: 814134; Krzyzanski et al, Journal of Pharmacokinetics and Pharmacodynamics (2021) 48: 411-438; Aljebab et al, PLOS ONE (2017) 10: 1371.

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The standard delivery of corticosteroids by either intravenous, intramuscular, subcutaneous, or oral routes result in multiple peaks and troughs. Although corticosteroids can readily achieve Cmax levels required to establish efficacy, frequent dosing repeatedly exceeds toxicity thresholds associated with AEs, leading to the chronic adverse effects such as hyperglycemia, immunosuppression, and suppression of the HPA.

In contrast, EryDex delivers approximately 40% of the total dose in the first 24 hours of infusion to achieve an initial Cmax required for efficacy. Over the following approximately 30 days, DSP is dephosphorylated by red blood cell intracellular phosphatases, resulting in the slow diffusion of DSP from the red blood cell.

Prior ATTeST Phase 3 Clinical Trial Results in Patients with A-T

EryDel completed the largest global clinical trial of patients with A-T in a Phase 3 clinical trial called ATTeST (Ataxia TelangiectasiaTrial with the EryDex SysTem; NCT02770807 / IEDAT-02-2015). ATTeST was an international, multicenter, randomized, double-blind, placebo-controlled, Phase 3 clinical trial of patients ages six years and older. The objective of ATTeST was to evaluate the effect of two doses (Low Dose and High Dose DSP/infusion) of EryDex, compared to placebo, on central nervous system symptoms in subjects with A-T. The initial treatment period was six months. All participants who completed efficacy assessments over the initial six months were eligible to continue in an additional six-month, double blind, placebo-controlled treatment designed to collect longer-term safety and efficacy data. There were 176 patients randomized (1:1:1) between Low Dose (mean of 8.2 mg ± standard deviation of 3.3 mg), High Dose (mean of 17.4 mg ± standard deviation of 5.4 mg), and placebo. Participants received monthly doses for 12 months. At time points of month six and nine, one-third of participants on placebo switched to active drug, respectively. All participants who completed treatment in the ATTeST study were subsequently eligible to enroll in an open-label extension study (NCT03563053 / IEDAT-03-2018; OLE-IEDAT) with 104 participants receiving High Dose EryDex.

The primary efficacy endpoint of ATTeST was change in neurological symptoms from baseline to month six measured by mICARS and compared between EryDex active arms and the placebo control arm using a mixed model repeated measures analysis. The ICARS was developed to quantify the level of impairment as a result of ataxia as related to hereditary ataxias. The modified ICARS, or mICARS, was the result of discussions with the FDA. The key secondary efficacy endpoint of ATTeST was the change in participant’s global clinical status from baseline until month six. This was measured by using the CGI-C. The safety objective was to evaluate the safety and tolerability of two dose levels of EryDex compared to placebo in participants with A-T, based on the occurrence of AEs.

The point estimate of ATTeST’s treatment effect LSM and a p-value are presented below. High Dose EryDex missed the pre-specified primary efficacy endpoint with a p-value of 0.077. However, High Dose EryDex demonstrated statistical significance in the per protocol (PP) population with a p-value of 0.019. Most of the clinical signs of neurodegeneration are observed in patients with A-T before the age of 10. By the age of 12, the vast majority of patients with A-T have become non-ambulatory and the neurological signs of disease progression slow significantly since most of the lower limb neuronal damage has already occurred. mICARS is focused on lower limb movement and published natural history data suggest two distinctive regression patterns between patients ages six to nine and 10 years or older with rapid neurological deterioration in the younger age group (six to nine years) compared to a much slower deterioration in older patients (10 years or older), many of whom are non-ambulatory. These data underpin the treatment effect in the patient population where neurodegeneration is most pronounced. Subgroup analyses were performed in the six to nine year old subgroup in the mITT population and there was a statistically significant difference for mICARS in the High Dose group as compared to placebo. Of note, the majority of patients eliminated from the PP population were due to COVID-19. COVID-19 uniquely impacted this trial because of two critical factors: 1) participants received their infusion at hospitals where essential personnel were diverted to care for COVID patients, and 2) participants with A-T are immunocompromised and there was hesitation in taking them into a high risk setting for acquiring the infection.

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Note: mICARS = Modified International Cooperative Ataxia Rating Scale by Central Rater • LSM = Least Square Means

 

Note: mICARS = Modified International Cooperative Ataxia Rating Scale by Central Rater • LSM = Least Square Means

In the ATTeST clinical trial, EryDex treatment was well tolerated with only mild to moderate transient AEs that rapidly resolved without medical intervention in all dose groups. No patterns of clinically relevant AEs were observed. Additionally, there were no clear, clinically significant differences in potential corticosteroid-induced side effects observed between the treated and placebo groups, including adrenal insufficiency, cushingoid appearance, osteoporosis, growth and development through puberty, and serious systemic infections.

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Note: TEAE = Treatment Emergent Adverse Event • EDS-EP = EryDex System End Product

Pivotal Phase 3 NEAT Clinical Trial of EryDex in Patients with A-T

We gained valuable learnings from the ATTeST clinical trial. Treating patients early is an important factor in A-T because the rate of neurological deterioration is most pronounced between the ages of six to nine years old.

Beginning in the second quarter of 2024, we expect to begin enrollment of the global Phase 3 clinical trial. NEAT is an international, multicenter, randomized, double-blind, placebo-controlled study to evaluate the neurological effects of EryDex in patients with A-T. We plan to enroll approximately 86 patients with A-T ages six to nine years old randomized (1:1) between EryDex or placebo, and approximately 20 patients with A-T ages 10 years or older. Participants who complete the full treatment period, complete the study assessments, and provide informed consent will be eligible to transition to an open label extension program after trial completion. The primary efficacy endpoint for the NEAT study will be measured by the change from baseline to last visit completion in RmICARS.

 

Regulatory Interactions

The pivotal Phase 3 NEAT clinical trial will be conducted under an SPA agreement with the FDA, which should allow for the submission of an NDA following completion of this study, provided we obtain positive results. Our plan would be to submit the NDA in 2026 with expectations to submit a MAA with the EMA shortly thereafter. EryDex is considered to be a drug/device combination product . We anticipate submitting a 505(b)(2) NDA to the FDA, which allows us to rely upon the agency’s prior findings of safety and effectiveness for the active pharmaceutical ingredient DSP.

EryDex has received orphan drug designation for the treatment of A-T from the FDA and EC. The EryDex System’s RCL is a CE marked non-invasive device that allows blood processing at the point of care, and the EryKit is a CE marked medical device in accordance with the MDR. Process Solutions are CE marked according to the MDD.

Manufacturing

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We currently operate one manufacturing facility in Medolla, Italy, which is authorized for the design and development, production, distribution, and servicing of our RCL machines, EryKit, and all proprietary medical devices. This production facility complies with EU ISO13485 and U.S. quality standards for medical device manufacturers. We also use several third-party manufacturers to produce key components and for final assemblies of the RCL and EryKit. We believe our current leased space is sufficient to meet our current needs to ensure adequate supply in our ongoing and future clinical trials, as well as anticipated early commercial needs, if EryDex is approved for marketing.

We also rely on third-party providers to manufacture sterile process solutions and drug product. Under unilateral development of our drug candidates, we are responsible for our internal manufacturing efforts, as well as for those of our third-party contract manufacturers, and we expect to continue to rely on internal manufacturing and multiple external manufacturers. We believe there are multiple sources for all of the materials required for the manufacture of our drug candidates. We intend to identify and qualify additional manufacturers to provide both process solutions and bulk drug product manufacturing services prior to submission of an NDA to the FDA as necessary to provide adequate commercial quantities of each of the sterile solutions. As our drug candidates advance through development, we expect to enter into long-term commercial supply agreements with key suppliers and manufacturers to fulfill and secure the ongoing and planned preclinical, clinical, and, if our drug candidates are approved for marketing, our commercial supply needs for ourselves and our collaborators.

Commercialization Plan

We plan to establish a commercial infrastructure in the U.S. to support the launch of EryDex, provided we obtain positive results from the Phase 3 NEAT clinical trial and subsequent regulatory approval from the FDA. We hired commercial leadership and are developing plans to ensure the necessary teams, infrastructure, systems, and processes are in place for a successful launch.

If we receive FDA approval for EryDex for the treatment of A-T, we plan to utilize a specialty distribution model to support drug availability to patients. We will also utilize a patient-centered hub to support education, insurance coverage, and compliance.

Commercial infrastructure for rare disease drugs typically consists of a targeted specialty sales force responsible for a focused group of stakeholders, including physicians, specialty distributors, and patient groups. Each sales territory collaborates closely with a cross functional team, including sales management, medical liaisons, internal sales support, marketing, and distribution. One challenge unique to commercializing therapies for rare diseases is the difficulty in identifying eligible patients due to the very small and sometimes heterogeneous disease populations.

Additional capabilities important to the rare disease marketplace include the management of key accounts such as centers of excellence, managed care organizations, group-purchasing organizations, specialty distributors and pharmacies, and government accounts. To develop the required commercial infrastructure, we will have to invest significant financial and management resources. Some of these resources will be committed prior to any regulatory confirmation that any of our drug candidates will be approved.

Outside of the United States, where appropriate and depending on the terms of contractual arrangements, we plan to commercialize EryDex through strategic partners. In certain instances, we may consider building our own commercial infrastructure.

Competition

We face competition from a number of different sources, including large and specialty pharmaceutical and biotechnology companies, academic research institutions, governmental agencies and public and private research institutions. We believe that the key competitive factors affecting the success of any drug candidates will include efficacy, safety profile, method of administration, cost, level of promotional activity, and intellectual property protection.

There are currently no therapies approved for A-T on the global market. If EryDex is approved for the treatment of A-T, it has the potential to be the first treatment on the market for this indication, but it currently faces pipeline competition. Pipeline competition for this rare disease results in competition for patient recruitment, as well as investigators’ time and resources. There are drugs currently in development for A-T in the U.S., and other countries, including corticosteroids. GTX-102, an oral spray formulation of betamethasone, in development by Acasti; IB1001, N-Acetyl-L-Leucine, in development by IntraBio; MBM-01, an EPAS1/HIF1 inhibitor, in development by Matrix Biomed; splice-switching antisense oligonucleotide in development by the Boston Children’s Hospital; triheptanoin, a medium-chain triglyceride marketed by Ultragenyx under the name Dojolvi, in development by The University of Queensland; and nicotinamide riboside, in development by Oslo University Hospital. In addition to drugs in development, there are many available corticosteroids, including prednisone, prednisolone, betamethasone, deflazacort, vamorolone, and many in development that could allow for longer half-lives and less AEs than approved corticosteroids.

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If approved and launched commercially, EryDex may face competition from these drugs and drug candidates. Some of these drug candidates may enter the market prior to EryDex, and some of these drug candidates could limit the market or level of reimbursement available for EryDex, if it is commercialized.

Intellectual Property

The divesture of the numerous patents and patent applications relating to the compound NOV004 was completed on October 31, 2023. Under the Termination Agreement, we agreed to reimburse PRF for certain fees and costs incurred in connection with the prosecution of the licensed patents prior to termination. We also agreed to assign to PRF certain documents and materials developed by us in connection with the development of the licensed product under the License Agreement, subject to our retained right to use such documents and materials for internal research purpose. If during a specified period following the termination of the License Agreement, PRF assigns or grants any license, option or other rights under the licensed patents to certain third parties that we had identified in its prior efforts to pursue out-licensing opportunity, PRF would be required to pay us 35% of related payments received by PRF.

EryDel, our wholly owned subsidiary, owns numerous patents and patent applications covering EryDex and AIDE technology in the United States and in jurisdictions outside of the United States. Issued patents covering EryDex and AIDE technology have been obtained in the United States, Europe, Japan, and a number of other jurisdictions outside of the United States. Our patent portfolio consists of six published patent families. Two patent families are directed to the EryDex system and the process for loading a drug into an erythrocyte.

The first patent family consists of U.S. Patent No. 9,089,640 and select foreign counterparts. The ‘640 patent issued on July 28, 2015. The ‘640 patent is the U.S. national phase entry of International PCT Patent Appl. No. PCT/IB2011/000891, filed on April 26, 2011, which claims priority to U.S. Provisional Patent Appl. No. 61/373,018, filed on August 12, 2010. The patent has 154 days of PTA and will expire in 2031 (excluding PTE). The ‘640 patent was recorded as assigned to EryDel on January 4, 2013. The ‘640 patent discloses a portable and automated apparatus and kit for introducing compounds within erythrocytes. The apparatus has a reusable part provided with mechanical elements such as pumps and valves and electronic units such as a control unit, which introduces compounds into erythrocytes in an automated manner. The apparatus also has a disposable part which comes into contact with the sample containing the erythrocytes. The apparatus also provides for further concentration of the erythrocytes after they have been treated. There are foreign counterparts in the same family, including in Italy, Australia, Brazil, Canada, China, Israel, Japan, Mexico, Russia, Singapore, South Korea, and the EPO. The corresponding EPO patent is EP 2563343 B1. The claims of this patent cover the RCL and EryKit.

The second patent family consists of U.S. Patent No. 10,849,858 and select foreign counterparts. The ‘858 patent issued on December 1, 2020. The ‘858 patent was is the U.S. national phase entry of International PCT Patent Appl. No. PCT/IB2014/061338, filed on May 9, 2014, which claims priority to Italian Application numbers RM2013A0280 and RM2013A0610, filed May 10, 2013 and November 5, 2013, respectively. The ‘858 application was recorded as assigned to EryDel on December 11, 2015. The patent has 477 days of PTA and will expire in 2035 (excluding PTE). U.S. Pat. Appl. No. 17/083,771, which is a continuation application of the ‘858 patent, is currently pending in the U.S. The ‘858 patent discloses a second swelling step that differentiates it from the method of the prior art which only has one swelling step. The second swelling step of the ‘858 patent leads to significant improvement in the viability and tunability of the erythrocytes before and after drug loading. There are foreign counterparts in the same family, including in Italy, Australia, Brazil, Canada, China, Israel, Japan, Mexico, Philippines, Russia, Singapore, South Korea, and the EPO. The corresponding EPO patent is EP 2994117 B1. This patent covers the planned method of operation of the EryDex system.

Two provisional patent applications 63/625,213, filed January 25, 2024, and 63/626,398, filed January 29, 2024 have also been filed in the U.S. and are directed to the therapeutic use of drug-loaded erythrocytes in treating disease.

We actively protect our commercially important proprietary technology by, among other methods, obtaining, maintaining, and defending our patent rights. Issued patents can provide protection for varying periods of time, depending upon the date of filing of the patent application, the date of patent issuance and the legal term of patents in the countries in which they are obtained. In general, patents issued for applications filed in the United States can provide exclusionary rights for 20 years from the earliest effective non-provisional filing date. In addition, in certain instances, the term of an issued U.S. patent that covers or claims an FDA approved product can be extended to recapture a portion of the term effectively lost as a result of the FDA regulatory review period, which is called patent term extension. The period of patent term extension in the United States cannot be longer than five years and the total patent term, including the extension period, must not exceed 14 years following FDA approval. The term of patents outside of the United States varies in accordance with the laws of the foreign jurisdiction, but typically is also 20 years from the earliest effective non-provisional filing date. However, the actual protection afforded by a patent varies on a product-by-product basis, from country-to-country, and depends upon many factors, including the type of patent, the scope of its coverage, the availability of regulatory-related extensions, the availability of legal remedies in a particular country and the validity and enforceability of the patent. Some countries

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also provide mechanisms to recapture a portion of the patent term lost during regulatory review, similar to patent term extension in the United States. The amount of patent term that can be recaptured depends on the laws of the relevant jurisdictions.

As with other biotechnology and pharmaceutical companies, our ability to maintain and solidify our proprietary and intellectual property position for our drug candidates and technologies will depend on our success in obtaining effective patent claims and enforcing those claims if granted. However, our pending patent applications, and any patent applications that we may in the future file or license from third parties may not result in the issuance of patents. We cannot guarantee that our owned pending patent application, or any patent applications that we may in the future file or license from third parties, will result in the issuance of patents. We also cannot predict the scope of claims that may be allowed or enforced in our patents. 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 programs and drug candidates. Any issued patents that we may receive in the future may be challenged, invalidated or circumvented. For example, we cannot be certain of the priority rights of inventions covered by pending third-party patent applications. If third parties prepare and file patent applications in the United States or other jurisdictions that also claim technology or therapeutics to which we have rights, we may have to participate in interference proceedings, post-grant review, reissue, or reexamination in the USPTO and equivalent foreign courts, which could result in substantial costs to us even if the eventual outcome, which is highly unpredictable, is favorable to us. In addition, because of the extensive time required for clinical development and regulatory review of a drug candidate we may develop, it is possible that, before any of our drug candidates can be commercialized, any related patent may expire or remain in force for only a short period following commercialization, thereby limiting any protection such patent would afford the respective product and any competitive advantage such patent may provide. For more information regarding the risks related to our intellectual property, see “Risk Factors—Risks Relating to Our Intellectual Property.”

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 file, the patent term is 20 years from the earliest date of filing a non-provisional patent application in the United States. In the United States, the patent term of a 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, only one patent applicable to an approved drug may be extended and only those claims covering the approved drug, a method for using it, or a method for manufacturing it 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 drug candidates receive FDA approval, we expect to apply for patent term extensions on patents covering those drug candidates. We plan to seek patent term extensions to any of our issued patents in any jurisdiction where these are available, however there is no guarantee that the applicable authorities, including the FDA in the United States, will agree with our assessment of whether such extensions should be granted, and if granted, the length of such extensions. For more information regarding the risks related to our intellectual property, see “Risk Factors—Risks Relating to Our Intellectual Property.”

In addition to patent protection, we also rely on trademark registration, trade secrets, know-how, other proprietary information and continuing technological innovation to develop and maintain our competitive position. We 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 or disclose our technology. Thus, we may not be able to meaningfully protect our trade secrets and we cannot guarantee, however, that these agreements will afford us adequate protection of our intellectual property and proprietary information rights. It is our policy to require our employees, consultants, outside scientific collaborators, 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. However, such confidentiality agreements and invention assignment agreements can be breached, and we may not have adequate remedies for any such breach. Additionally, some of our trade secrets and know-how for which we decide to not pursue additional patent protection may, over time, be disseminated within the industry through independent development and public presentations describing the methodology. For more information regarding the risks related to our intellectual property, see “Risk Factors—Risks Relating to Our Intellectual Property.”

The patent positions of biotechnology companies like ours are generally uncertain and involve complex legal, scientific and factual questions. Our commercial success will also depend in part on not infringing upon the proprietary rights of third parties. It is uncertain whether the issuance of any third-party patent would require us to alter our development or commercial strategies, or our drugs or processes, obtain licenses or cease certain activities. Our breach of any license agreements or our failure to obtain a license to

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proprietary rights required to develop or commercialize our future drug candidates may have a material adverse impact on us. If third parties prepare and file patent applications in the United States that also claim technology to which we have rights, we may have to participate in interference or derivation proceedings in the USPTO to determine priority of invention. For more information, see “Risk Factors—Risks Relating to Our Intellectual Property.”

Regulatory Matters

Government authorities in the United States at the federal, state and local level, and in other countries and jurisdictions, extensively regulate, among other things, the research, development, testing, manufacture, quality control, approval, labeling, packaging, storage, record-keeping, promotion, advertising, distribution, post-approval monitoring and reporting, marketing, sampling and export and import of pharmaceutical products. Generally, before a new drug can be marketed, considerable data demonstrating its quality, safety and efficacy must be obtained, organized into a format specific for each regulatory authority, submitted for review and approved by the regulatory authority.

Products composed of components that would normally be regulated by different centers at the FDA are known as combination products. Typically, the FDA’s Office of Combination Products assigns a combination product to a specific agency center as the lead reviewer. The FDA determines which center will lead a product’s review based upon the product’s primary mode of action. Depending on the type of combination product, its approval, clearance or licensure may usually be obtained through the submission of a single marketing application. We anticipate that EryDex will be regulated as a drug, and that the FDA will permit a single regulatory submission seeking approval of EryDex. Even when a single marketing application is required for a combination product, such as an NDA for a combination pharmaceutical and device product, both the FDA’s Center for Drug Evaluation and Research and the FDA’s Center for Devices and Radiological Health may participate in the review. An applicant will also need to discuss with the agency how to apply certain premarket requirements and post-marketing regulatory requirements, including conduct of clinical trials, AE reporting and GMP, to their combination product.

U.S. Drug Development

In the United States, the FDA regulates drugs under the Federal Food, Drug, and Cosmetic Act, or FDCA, and its implementing regulations. The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations requires the expenditure of substantial time and financial resources. Failure to comply with the applicable U.S. requirements at any time during the product development process, approval process or post-market may subject an applicant to administrative or judicial sanctions. These sanctions could include, among other actions, the FDA’s refusal to approve pending applications, withdrawal of an approval, a clinical hold, untitled or warning letters, product recalls or market withdrawals, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement and civil or criminal penalties.

An applicant seeking approval to market and distribute a new drug product in the United States must typically undertake the following:

•completion of preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s GLP, regulations;

•submission to the FDA of an IND, which must take effect before human clinical trials may begin;

•approval by an independent IRB, representing each clinical site before each clinical trial may be initiated;

•performance of adequate and well-controlled human clinical trials in accordance with GCPs, to establish the safety and efficacy of the proposed drug product for each proposed indication;

•preparation and submission to the FDA of an NDA, requesting marketing for one or more proposed indications;

•review by an FDA advisory committee, where appropriate or if applicable;

•satisfactory completion of one or more FDA inspections of the manufacturing facility or facilities at which the product, or components thereof, are produced to assess compliance with current Good Manufacturing Practices, or cGMP, requirements and to assure that the facilities, methods and controls are adequate to preserve the product’s identity, strength, quality and purity;

•satisfactory completion of FDA audits of clinical trial sites to assure compliance with GCPs and the integrity of the clinical data;

•payment of user fees and securing FDA approval of the NDA; and

•compliance with any post-approval requirements, including the potential requirement to implement a Risk Evaluation and Mitigation Strategy, or REMS, and the potential requirement to conduct post-approval studies.

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Preclinical Studies

Before an applicant begins testing a compound with potential therapeutic value in humans, the drug candidate enters the preclinical testing stage. Preclinical studies include laboratory evaluation of product chemistry, toxicity and formulation, as well as in vitro and animal studies to assess the potential safety and activity of the drug for initial testing in humans and to establish a rationale for therapeutic use. The conduct of preclinical studies is subject to federal regulations and requirements, including GLP regulations. The results of the preclinical tests, together with manufacturing information, analytical data, any available clinical data or literature and plans for clinical trials, among other things, are submitted to the FDA as part of an IND. Some long-term preclinical testing, such as animal tests of reproductive AEs and carcinogenicity, may continue after the IND is submitted.

The IND and IRB Processes

The authorization for an IND must be secured prior to interstate shipment and administration of any new drug that is not the subject of an approved NDA. In support of a request for an IND, applicants must submit a protocol for each clinical trial and any subsequent protocol amendments must be submitted to the FDA as part of the IND. In addition, the results of the preclinical tests, together with manufacturing information, analytical data, any available clinical data or literature and plans for clinical trials, among other things, are submitted to the FDA as part of an IND. The FDA requires a 30-day waiting period after the filing of each IND before clinical trials may begin. This waiting period is designed to allow the FDA to review the IND to determine whether human research subjects will be exposed to unreasonable health risks. At any time during this 30-day period, the FDA may raise concerns or questions about the conduct of the trials as outlined in the IND and impose a clinical hold. In this case, the IND sponsor and the FDA must resolve any outstanding concerns before clinical trials can begin.

Following commencement of a clinical trial under an IND, the FDA may also place a clinical hold or partial clinical hold on that trial. A clinical hold is an order issued by the FDA to the sponsor to delay a proposed clinical investigation or to suspend an ongoing investigation. A partial clinical hold is a delay or suspension of only part of the clinical work requested under the IND. For example, a specific protocol or part of a protocol is not allowed to proceed, while other protocols may do so. Following issuance of a clinical hold or partial clinical hold, an investigation may only resume after the FDA has notified the sponsor that the investigation may proceed. The FDA will base that determination on information provided by the sponsor correcting the deficiencies previously cited or otherwise satisfying the FDA that the investigation can proceed.

A sponsor may choose, but is not required, to conduct a foreign clinical study under an IND. When a foreign clinical study is conducted under an IND, all IND requirements must be met unless waived. When the foreign clinical study is not conducted under an IND, the sponsor must ensure that the study complies with certain FDA regulatory requirements in order to use the study as support for an IND or application for marketing approval. Specifically, the FDA has promulgated regulations governing the acceptance of foreign clinical studies not conducted under an IND, establishing that such studies will be accepted as support for an IND or application for marketing approval if the study was conducted in accordance with GCP including review and approval by an independent ethics committee, or IEC, and informed consent from subjects, and the FDA is able to validate the data from the study through an on-site inspection if the FDA deems such inspection necessary. The GCP requirements encompass both ethical and data integrity standards for clinical studies. The FDA’s regulations are intended to help ensure the protection of human subjects enrolled in non-IND foreign clinical studies, as well as the quality and integrity of the resulting data. They further help ensure that non-IND foreign studies are conducted in a manner comparable to that required for IND studies. If a marketing application is based solely on foreign clinical data, the FDA requires that the foreign data be applicable to the U.S. population and U.S. medical practice; the studies must have been performed by clinical investigators of recognized competence; and the FDA must be able to validate the data through an on-site inspection or other appropriate means, if the FDA deems such an inspection to be necessary.

In addition to the foregoing IND requirements, an IRB representing each institution participating in the clinical trial must review and approve the plan for any clinical trial before it commences at that institution, and the IRB must conduct continuing review and reapprove the study at least annually. The IRB must review and approve, among other things, the study protocol and informed consent information to be provided to study subjects. An IRB must operate in compliance with FDA regulations. An IRB can suspend or terminate approval of a clinical trial at its institution, or an institution it represents, if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the drug candidate has been associated with unexpected serious harm to patients.

Additionally, some trials are overseen by an independent group of qualified experts organized by the trial sponsor, known as a data safety monitoring board or committee. This group provides authorization for whether or not a trial may move forward at designated check points based on access that only the group maintains to available data from the study. Suspension or termination of development during any phase of clinical trials can occur if it is determined that the participants or patients are being exposed to an unacceptable health risk. Other reasons for suspension or termination may be made by us based on evolving business objectives and/or competitive climate.

Information about certain clinical trials must be submitted within specific timeframes to the NIH, for public dissemination on its ClinicalTrials.gov website.

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Human Clinical Studies in Support of an NDA

Clinical trials involve the administration of the investigational product to human subjects under the supervision of qualified investigators in accordance with GCP requirements, which include, among other things, the requirement that all research subjects provide their informed consent in writing before their participation in any clinical trial. Clinical trials are conducted under written study protocols detailing, among other things, the inclusion and exclusion criteria, the objectives of the study, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated.

Human clinical trials are typically conducted in the following sequential phases, which may overlap or be combined:

•Phase 1: The drug is initially introduced into healthy human subjects or, in certain indications such as cancer, patients with the target disease or condition and tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an early indication of its effectiveness and to determine optimal dosage.

•Phase 2: The drug is administered to a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage.

•Phase 3: The drug is administered to an expanded patient population, generally at geographically dispersed clinical trial sites, in well-controlled clinical trials to generate enough data to statistically evaluate the efficacy and safety of the product for approval, to establish the overall risk-benefit profile of the product, and to provide adequate information for the labeling of the product.

•Phase 4: Post-approval studies, which are conducted following initial approval, are typically conducted to gain additional experience and data from treatment of patients in the intended therapeutic indication.

The clinical drug development phases described above are general guidelines. The phases are not clearly delineated from each other in every regard, and it is common practice to separate (e.g., Phase 1a and 1b trials) or combine (e.g., a Phase 2/3 trial) phases, which is accepted by the FDA and other global regulatory agencies.

Progress reports detailing the results of the clinical trials must be submitted at least annually to the FDA and more frequently if SAEs occur. In addition, IND safety reports must be submitted to the FDA for any of the following: serious and unexpected suspected adverse reactions; findings from other studies or animal or in vitro testing that suggest a significant risk in humans exposed to the drug; and any clinically important increase in the case of a serious suspected adverse reaction over that listed in the protocol or investigator brochure. Phase 1, Phase 2 and Phase 3 clinical trials may not be completed successfully within any specified period, or at all. Furthermore, the FDA or the sponsor may suspend or terminate a clinical trial at any time on various grounds, including a finding that the research subjects are being exposed to an unacceptable health risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution, or an institution it represents, if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the drug has been associated with unexpected serious harm to patients. The FDA will typically inspect one or more clinical sites to assure compliance with GCP and the integrity of the clinical data submitted.

Concurrent with clinical trials, companies often complete additional animal studies and must also develop additional information about the chemistry and physical characteristics of the drug as well as 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 drug candidate and, among other things, must develop methods for testing the identity, strength, quality, and purity of the final drug. Additionally, appropriate packaging must be selected and tested and stability studies must be conducted to demonstrate that the drug candidate does not undergo unacceptable deterioration over its shelf life.

Special Protocol Assessment

A sponsor may request an SPA, the purpose of which is to reach agreement with the FDA on the Phase 3 clinical trial protocol design and analysis that will form the primary basis of an efficacy claim. An SPA request must be made before the proposed trial begins, and all open issues must be resolved before the trial begins for an SPA to be approved. If a written agreement is reached, it will be documented in an SPA letter or the minutes of a meeting between the sponsor and the FDA and made part of the administrative record.

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Even if the FDA agrees to the design, execution and analyses proposed in protocols reviewed under the SPA process, the FDA may revoke or alter its agreement under the following circumstances:

•public health concerns emerge that were unrecognized at the time of the protocol assessment, or the director of the review division determines that a substantial scientific issue essential to determining safety or efficacy has been identified after testing has begun;

•a sponsor fails to follow a protocol that was agreed upon with the FDA; or

•the relevant data, assumptions, or information provided by the sponsor in a request for SPA change, are found to be false statements or misstatements, or are found to omit relevant facts.

A documented SPA may be modified, and such modification will be deemed binding by the FDA review division, except under the circumstances described above, if the FDA and the sponsor agree in writing to modify the protocol and such modification is intended to improve the study. However, an SPA does not guarantee that a trial will be successful.

Submission of an NDA to the FDA

Assuming successful completion of required clinical testing and other requirements, the results of the preclinical studies and clinical trials, together with detailed information relating to the product’s chemistry, manufacture, controls and proposed labeling, among other things, are submitted to the FDA as part of an NDA requesting approval to market the drug product for one or more indications. Under federal law, the submission of most NDAs is additionally subject to an application user fee, and the sponsor of an approved NDA is also subject to annual program fees.

The FDA conducts a preliminary review of an NDA within 60 days of its receipt and informs the sponsor by the 74th day after the FDA’s receipt of the submission to determine whether the application is sufficiently complete to permit substantive review. The FDA may request additional information rather than accept an NDA for filing. In this event, the application must be resubmitted with the additional information. The resubmitted application is also subject to review before the FDA accepts it for filing. Once the submission is accepted for filing, the FDA begins an in-depth substantive review. The FDA has agreed to specified performance goals in the review process of NDAs. Most such applications are meant to be reviewed within ten months from the filing date, and most applications for “priority review” products are meant to be reviewed within six months of the filing date. The review process and the Prescription Drug User Fee Act goal date may be extended by the FDA for three additional months to consider new information or clarification provided by the applicant to address an outstanding deficiency identified by the FDA following the original submission.

Before approving an NDA, the FDA typically will inspect the facility or facilities where the product is or will be manufactured. These pre-approval inspections may cover all facilities associated with an NDA submission, including drug component manufacturing (such as active pharmaceutical ingredients), finished drug product manufacturing, and control testing laboratories. 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, the FDA will typically inspect one or more clinical sites to assure compliance with GCP.

In addition, as a condition of approval, the FDA may require an applicant to develop a REMS. A REMS uses risk minimization strategies beyond the professional labeling to ensure that the benefits of the product outweigh the potential risks. To determine whether a REMS is needed, the FDA will consider the size of the population likely to use the product, seriousness of the disease, expected benefit of the product, expected duration of treatment, seriousness of known or potential AEs, and whether the product is a new molecular entity. A REMS can include medication guides, physician communication plans for healthcare professionals, and elements to assure safe use, or ETASU. ETASU may include, but are not limited to, special training or certification for prescribing or dispensing, dispensing only under certain circumstances, special monitoring, and the use of patient registries. The FDA may require a REMS before approval or post-approval if it becomes aware of a serious risk associated with use of the product. The requirement for a REMS can materially affect the potential market and profitability of a product.

The FDA is required to refer an application for a novel drug to an advisory committee or explain why such referral was not made. Typically, an advisory committee is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides a recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.

The FDA’s Decision on an NDA

On the basis of the FDA’s evaluation of the NDA and accompanying information, including the results of the inspection of the manufacturing facilities, the FDA may issue an approval letter or a complete response letter. An approval letter authorizes commercial marketing of the product with specific prescribing information for specific indications. A complete response letter generally outlines the deficiencies in the submission and may require substantial additional testing or information in order for the FDA

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to reconsider the application. If and when those deficiencies have been addressed to the FDA’s satisfaction in a resubmission of the NDA, 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. Even with submission of this additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval.

If the FDA approves a product, it may limit the approved indications for use for the product, require that contraindications, warnings or precautions be included in the product labeling, require that post-approval studies, including Phase 4 clinical trials, be conducted to further assess the drug’s safety after approval, require testing and surveillance programs to monitor the product after commercialization, or impose other conditions, including distribution restrictions or other risk management mechanisms, including REMS, which can materially affect the potential market and profitability of the product. The FDA may prevent or limit further marketing of a product based on the results of post-market studies or surveillance programs. After approval, many types of changes to the approved product, such as adding new indications, manufacturing changes and additional labeling claims, are subject to further testing requirements and FDA review and approval.

Post-Approval Requirements

Drugs manufactured or distributed pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to recordkeeping, periodic reporting, product sampling and distribution, advertising and promotion and reporting of adverse experiences with the product. 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 annual user fee requirements for any marketed products and the establishments at which such products are manufactured, as well as new application fees for supplemental applications with clinical data.

In addition, drug manufacturers and other entities involved in the manufacture and distribution of approved drugs are required to register their establishments with the FDA and state agencies and are subject to periodic unannounced inspections by the FDA and these state agencies for compliance with cGMP requirements. Changes to the manufacturing process are strictly regulated and often require prior FDA approval before being implemented. FDA regulations also require investigation and correction of any deviations from cGMP and impose reporting and documentation requirements upon the sponsor and any third-party manufacturers that the sponsor may decide to use. Accordingly, manufacturers must continue to expend time, money, and effort in the area of production and quality control to maintain cGMP compliance.

Once an approval is granted, the FDA may withdraw the 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 or other restrictions under a REMS program. Other potential consequences include, among other things:

•restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls;

•safety alerts, Dear Healthcare Provider letters, press releases or other communications containing warning or other safety information about the product;

•fines, warning letters or holds on post-approval clinical trials;

•refusal of the FDA to approve pending NDAs or supplements to approved NDAs, or suspension or revocation of product license approvals;

•product seizure or detention, or refusal to permit the import or export of products; or

•injunctions or the imposition of civil or criminal penalties.

The FDA strictly regulates marketing, labeling, advertising and promotion of products that are placed on the market. Drugs may be promoted only for the approved indications 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, and a company that is found to have improperly promoted off-label uses may be subject to significant liability.

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Medical Device Regulation

The medical device component of EryDex will be subject to additional FDA regulations, including:

•the FDA’s Quality System Regulation, which requires manufacturers, including their suppliers, to follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects of the manufacturing process;

•a requirement for Human Factors studies during development to support approval;

•medical device reporting regulations, which require that manufacturers report to the FDA if their device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if the malfunction were to recur;

•medical device recalls, which require that manufacturers report to the FDA any recall of a medical device, provided the recall was initiated to either reduce a risk to health posed by the device, or to remedy a violation of the FDCA caused by the device that may present a risk to health; and

•post-market surveillance regulations, which apply when necessary to protect the public health or to provide additional safety and effectiveness data for the device.

Disclosure of Clinical Trial Information

Sponsors of clinical trials of FDA regulated products are required to register and disclose certain clinical trial information. Information related to the product, patient population, phase of investigation, trial 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 trials can be delayed in certain circumstances for up to two years after the date of completion of the trial. Competitors may use this publicly available information to gain knowledge regarding the progress of development programs.

The Orphan Drug Act

Under the Orphan Drug Act, the FDA may grant orphan drug designation to drugs intended to treat a rare disease or condition—generally a disease or condition that affects fewer than 200,000 individuals in the United States. Orphan drug designation must be requested before submitting an NDA. After the FDA grants orphan drug designation, the generic identity of the drug and its potential orphan use are disclosed publicly by the FDA. Orphan drug designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process. The first NDA applicant to receive FDA approval for a particular active ingredient to treat a particular disease with FDA orphan drug designation is entitled to a seven-year exclusive marketing period in the United States for that product, for that indication. During the seven-year exclusivity period, the FDA may not approve any other applications to market the same drug for the same disease, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity. Orphan drug exclusivity does not prevent the FDA from approving a different drug for the same disease or condition, or the same drug for a different disease or condition. Among the other benefits of orphan drug designation are Credits for certain research and a waiver of the NDA application user fee.

Pediatric Exclusivity and Pediatric Use

Under the Best Pharmaceuticals for Children Act, certain drugs may obtain an additional six months of exclusivity in an indication, if the sponsor submits information requested in writing by the FDA in what is known as a Written Request, relating to the use of the active moiety of the drug in children. The FDA may not issue a Written Request for studies on unapproved or approved indications where it determines that information relating to the use of a drug in a pediatric population, or part of the pediatric population, may not produce health benefits in that population. The six-month period of pediatric exclusivity attaches to the end of all existing marketing exclusivity and patent periods listed in FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations (“Orange Book”) at the time of granting.

To receive the six-month pediatric market exclusivity, a sponsor would have to receive a Written Request from the FDA and conduct the requested studies in accordance with a written agreement with the FDA. If there is no written agreement, studies would be conducted in accordance with commonly accepted scientific principles, and reports submitted of those studies. A Written Request may include studies for indications that are not currently in the labeling if the FDA determines that such information will benefit the public health. The FDA will accept the reports upon its determination that the studies were conducted in accordance with and are responsive to the original Written Request, agreement, or commonly accepted scientific principles, as appropriate, and that the reports comply with the FDA’s filing requirements.

In addition, the Pediatric Research Equity Act (PREA) requires a sponsor to conduct pediatric studies for most drugs, for a new active ingredient, new indication, new dosage form, new dosing regimen, or new route of administration. Under PREA, original

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NDAs and supplements thereto must contain a pediatric assessment unless the sponsor has received a deferral or waiver. The required assessment must include the evaluation of the safety and effectiveness of the product for the claimed indications in all relevant pediatric subpopulations and support dosing and administration for each pediatric subpopulation for which the product is safe and effective. The FDA, on its own initiative or at the request of the sponsor, may defer pediatric trial requirements for some or all of the pediatric subpopulations. A deferral may be granted by the FDA if it believes that additional safety or effectiveness data in the adult population need to be collected before the pediatric studies begin. The FDA must send a non-compliance letter to any sponsor that fails to submit the required assessment, keep a deferral current, or fails to submit a request for approval of a pediatric formulation. Unless otherwise required by regulation, PREA generally does not apply to a drug for an indication for which orphan designation has been granted with the exception of orphan-designated drugs if the drug is a molecularly targeted cancer product intended for the treatment of an adult cancer and is directed at a molecular target that the FDA has determined is substantially relevant to the growth or progression of a pediatric cancer.

Fast Track Designation, Accelerated Approval, and Priority Review

A sponsor may seek approval of its drug candidate under programs designed to accelerate the FDA’s review and approval of NDAs. For example, Fast Track Designation may be granted to a drug intended for treatment of a serious or life-threatening disease or condition that has potential to address unmet medical needs for the disease or condition. The key benefits of Fast Track Designation are more frequent interactions with the FDA and rolling review (submission of portions of an application before the complete marketing application is submitted).

Under the accelerated approval programs, the FDA may approve an NDA on the basis of either a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments. Post-marketing studies or completion of ongoing studies after marketing approval are required to verify the drug’s clinical benefit in relationship to the surrogate endpoint or ultimate outcome in relationship to the clinical benefit. FDA is authorized to require a post-approval study to be underway prior to approval or within a specified time period following approval and requires sponsors to submit progress reports for required post-approval studies and any conditions required by the FDA not later than 180 days following approval and not less frequently than every 180 days thereafter until completion or termination of the study.

Based on results of the Phase 3 clinical trials submitted in an NDA, upon the request of an applicant, the FDA may grant the NDA a Priority Review designation, which sets the target date for FDA action on the application at eight months after the NDA submission. Priority Review is granted where there is evidence that the proposed product would be a significant improvement in the safety or effectiveness of the treatment, diagnosis, or prevention of a serious condition. If criteria are not met for Priority Review, the application is subject to the standard FDA review period of twelve months after NDA submission. Priority Review designation does not change the scientific/medical standard for approval or the quality of evidence necessary to support approval.

EU Drug Development

Clinical Trials in the EU

Similarly to the United States, the various phases of non-clinical and clinical research in the EU are subject to significant regulatory controls.

In the EU, clinical trials are governed by the Clinical Trials Regulation (EU) No 536/2014, or CTR, which entered into application on January 31, 2022 repealing and replacing the former Clinical Trials Directive 2001/20, or CTD. The CTR is intended to harmonize and streamline clinical trial authorizations, simplify adverse-event reporting procedures, improve the supervision of clinical trials and increase transparency. Specifically, the Regulation, which is directly applicable in all EU Member States, introduces a streamlined application procedure through a single-entry point, the "EU portal", the Clinical Trials Information System, or CTIS; a single set of documents to be prepared and submitted for the application; as well as simplified reporting procedures for clinical trial sponsors. A harmonized procedure for the assessment of applications for clinical trials has been introduced and is divided into two parts. Part I assessment is led by the competent authorities of a reference Member State selected by the trial sponsor and relates to clinical trial aspects that are considered to be scientifically harmonized across EU Member States. This assessment is then submitted to the competent authorities of all concerned Member States in which the trial is to be conducted for their review. Part II is assessed separately by the competent authorities and Ethics Committees in each concerned EU Member State. Individual EU Member States retain the power to authorize the conduct of clinical trials on their territory.

The extent to which on-going clinical trials will be governed by the CTR will depend on the duration of the individual clinical trial. For clinical trials in relation to which an application for approval was made on the basis of the CTD before January 31, 2023, the CTD will continue to apply on a transitional basis until January 31, 2025. By that date, all ongoing trials will become subject to the provisions of the CTR. The CTR will apply to clinical trials from an earlier date if the related clinical trial application was made on the basis of the CTR or if the clinical trial has already transitioned to the CTR framework before January 31, 2025.

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In all cases, clinical trials must be conducted in accordance with GCP and the applicable regulatory requirements. Medicines used in clinical trials, including ATMPs, must be manufactured in accordance with the guidelines on cGMP and in a GMP licensed facility, which can be subject to GMP inspections.

EU Review and approval process

In the EU, medicinal products can only be commercialized after a related marketing authorization, or MA, has been granted. To obtain an MA for a product in the EU, an applicant must submit a Marketing Authorization Application, or MAA, either under a centralized procedure administered by the EMA, or one of the procedures administered by the competent authorities of EU Member States (decentralized procedure, national procedure or mutual recognition procedure). An MA may be granted only to an applicant established in the EU.

The centralized procedure provides for the grant of a single MA by the European Commission that is valid throughout the EEA (which is comprised of the 27 EU Member States plus Norway, Iceland and Liechtenstein). Pursuant to Regulation (EC) No 726/2004, the centralized procedure is compulsory for specific products, including for (i) medicinal products derived from biotechnological processes, (ii) products designated as orphan medicinal products, (iii) advanced therapy medicinal products, or ATMPs, and (iv) products with a new active substance indicated for the treatment of HIV/AIDS, cancer, neurodegenerative diseases, diabetes, auto-immune and other immune dysfunctions and viral diseases. For products with a new active substance indicated for the treatment of other diseases and products that are highly innovative or for which a centralized process is in the interest of patients, authorization through the centralized procedure is optional on related approval.

Under the centralized procedure, the EMA’s Committee for Medicinal Products for Human Use, or CHMP, conducts the initial assessment of a product. The CHMP is also responsible for several post-authorization and maintenance activities, such as the assessment of modifications or extensions to an existing MA. The maximum timeframe for the evaluation of an MAA under the centralized procedure is 210 days, excluding clock stops when additional information or written or oral explanation is to be provided by the applicant in response to questions of the CHMP. Accelerated assessment may be granted by the CHMP in exceptional cases, when a medicinal product targeting an unmet medical need is expected to be of major interest from the point of view of public health and, in particular, from the viewpoint of therapeutic innovation. If the CHMP accepts a request for accelerated assessment, the time limit of 210 days will be reduced to 150 days (excluding clock stops). The CHMP can, however, revert to the standard time limit for the centralized procedure if it considers that it is no longer appropriate to conduct an accelerated assessment.

Unlike the centralized authorization procedure, the decentralized MA procedure requires a separate application to, and leads to separate approval by, the competent authorities of each EU Member State in which the product is to be marketed. This application is identical to the application that would be submitted to the EMA for authorization through the centralized procedure. The reference EU Member State prepares a draft assessment and drafts of the related materials within 120 days after receipt of a valid application. The resulting assessment report is submitted to the concerned EU Member States who, within 90 days of receipt, must decide whether to approve the assessment report and related materials. If a concerned EU Member State cannot approve the assessment report and related materials due to concerns relating to a potential serious risk to public health, disputed elements may be referred to the Heads of Medicines Agencies’ Coordination Group for Mutual Recognition and Decentralized Procedures – Human, or CMDh, for review. The subsequent decision of the European Commission is binding on all EU Member States.

The mutual recognition procedure allows companies that have a medicinal product already authorized in one EU Member State to apply for this authorization to be recognized by the competent authorities in other EU Member States. Like the decentralized procedure, the mutual recognition procedure is based on the acceptance by the competent authorities of the EU Member States of the MA of a medicinal product by the competent authorities of other EU Member States. The holder of a national MA may submit an application to the competent authority of an EU Member State requesting that this authority recognize the MA delivered by the competent authority of another EU Member State.

An MA has, in principle, an initial validity of five years. The MA may be renewed after five years on the basis of a re-evaluation of the risk-benefit balance by the EMA or by the competent authority of the EU Member State in which the original MA was granted. To support the application, the MA holder must provide the EMA or the competent authority with a consolidated version of the Common Technical Document providing up-to-date data concerning the quality, safety and efficacy of the product, including all variations introduced since the MA was granted, at least nine months before the MA ceases to be valid. The European Commission or the competent authorities of the EU Member States may decide on justified grounds relating to pharmacovigilance, to proceed with one further five-year renewal period for the MA. Once subsequently definitively renewed, the MA shall be valid for an unlimited period. Any authorization which is not followed by the actual placing of the medicinal product on the EU market (for a centralized MA) or on the market of the authorizing EU Member State within three years after authorization ceases to be valid (the so-called sunset clause).

Innovative products that target an unmet medical need and are expected to be of major public health interest may be eligible for a number of expedited development and review programs, such as the Priority Medicines, or PRIME, scheme, which provides incentives similar to the breakthrough therapy designation in the U.S. PRIME is a voluntary scheme aimed at enhancing the EMA’s

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support for the development of medicinal products that target unmet medical needs. Eligible products must target conditions for which there is an unmet medical need (there is no satisfactory method of diagnosis, prevention or treatment in the EU or, if there is, the new medicinal product will bring a major therapeutic advantage) and they must demonstrate the potential to address the unmet medical need by introducing new methods of therapy or improving existing ones. Benefits accrue to sponsors of product candidates with PRIME designation, including but not limited to, early and proactive regulatory dialogue with the EMA, frequent discussions on clinical trial designs and other development program elements, and potentially accelerated MAA assessment once a dossier has been submitted.

In the EU, a “conditional” MA may be granted in cases where all the required safety and efficacy data are not yet available. The European Commission may grant a conditional MA for a medicinal product if it is demonstrated that all of the following criteria are met: (i) the benefit-risk balance of the medicinal product is positive; (ii) it is likely that the applicant will be able to provide comprehensive data post-authorization; (iii) the medicinal product fulfils an unmet medical need; and (iv) the benefit of the immediate availability to patients of the medicinal product is greater than the risk inherent in the fact that additional data are still required. The conditional MA is subject to conditions to be fulfilled for generating the missing data or ensuring increased safety measures. It is valid for one year and must be renewed annually until all related conditions have been fulfilled. Once any pending studies are provided, the conditional MA can be converted into a traditional MA. However, if the conditions are not fulfilled within the timeframe set by the EMA and approved by the European Commission, the MA will cease to be renewed.

An MA may also be granted “under exceptional circumstances” where the applicant can show that it is unable to provide comprehensive data on efficacy and safety under normal conditions of use even after the product has been authorized and subject to specific procedures being introduced. These circumstances may arise when the intended indications are very rare and, in the state of scientific knowledge at that time, it is not possible to provide comprehensive information, or when generating data may be contrary to generally accepted ethical principles. Like a conditional MA, an MA granted in exceptional circumstances is reserved to medicinal products intended to be authorized for treatment of rare diseases or unmet medical needs for which the applicant does not hold a complete data set that is required for the grant of a standard MA. However, unlike the conditional MA, an applicant for authorization in exceptional circumstances is not subsequently required to provide the missing data. Although the MA “under exceptional circumstances” is granted definitively, the risk-benefit balance of the medicinal product is reviewed annually, and the MA will be withdrawn if the risk-benefit ratio is no longer favorable.

Pediatric Development in the EU

In the EU, Regulation (EC) No 1901/2006 provides that all MAAs for new medicinal products have to include the results of trials conducted in the pediatric population, in compliance with a pediatric investigation plan, or PIP, agreed with the EMA’s Pediatric Committee, or PDCO. The PIP sets out the timing and measures proposed to generate data to support a pediatric indication of the medicinal product for which MA is being sought. The PDCO can grant a deferral of the obligation to implement some or all of the measures provided in the PIP until there are sufficient data to demonstrate the efficacy and safety of the product in adults. Further, the obligation to provide pediatric clinical trial data can be waived by the PDCO when these data are not needed or appropriate because the product is likely to be ineffective or unsafe in children, the disease or condition for which the product is intended occurs only in adult populations, or when the product does not represent a significant therapeutic benefit over existing treatments for pediatric patients. Once the MA is obtained in all EU Member States and study results are included in the product information, even when negative, the product is eligible for a six-month extension to the Supplementary Protection Certificate, or SPC, if any is in effect at the time of authorization or, in the case of orphan medicinal products, a two-year extension of orphan market exclusivity.

Manufacturing Regulation in the EU

In addition to an MA, various other requirements apply to the manufacturing and placing on the EU market of medicinal products. The manufacturing of medicinal products in the EU requires a manufacturing authorization and import of medicinal products into the EU requires a manufacturing authorization allowing for import. The manufacturing authorization holder must comply with various requirements set out in the applicable EU laws, regulations and guidance, including EU cGMP standards. Similarly, the distribution of medicinal products within the EU is subject to compliance with the applicable EU laws, regulations and guidelines, including the requirement to hold appropriate authorizations for distribution granted by the competent authorities of EU Member States. Marketing authorization holders and/or manufacturing and import authorization, or MA holders and/or distribution authorization holders may be subject to civil, criminal or administrative sanctions, including suspension of manufacturing authorization, in case of non-compliance with the EU or EU Member States’ requirements applicable to the manufacturing of medicinal products.

Data and Market Exclusivity in the EU

The EU provides opportunities for data and market exclusivity related to MAs. Upon receiving an MA, innovative medicinal products are generally entitled to receive eight years of data exclusivity and 10 years of market exclusivity. Data exclusivity, if granted, prevents regulatory authorities in the EU from referencing the innovator’s data to assess a generic application

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or bio similar application for eight years from the date of authorization of the innovative product, after which a generic or bio similar MAA can be submitted, and the innovator’s data may be referenced. The market exclusivity period prevents a successful generic or bio similar applicant from commercializing its product in the EU until 10 years have elapsed from the initial MA of the reference product in the EU. The overall ten-year period may, occasionally, be extended for a further year to a maximum of 11 years if, during the first eight years of those ten years, the MA holder obtains an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to their authorization, are held to bring a significant clinical benefit in comparison with existing therapies. However, there is no guarantee that a product will be considered by the EU’s regulatory authorities to be a new chemical/biological entity, and products may not qualify for data exclusivity.

Orphan Designation in the EU

In the EU, Regulation (EC) No. 141/2000, as implemented by Regulation (EC) No. 847/2000 provides that a medicinal product can be designated as an orphan medicinal product by the European Commission if its sponsor can establish that: (i) the product is intended for the diagnosis, prevention or treatment of life-threatening or chronically debilitating conditions; (ii) either (a) such conditions affect not more than 5 in 10,000 persons in the EU when the application is made, or (b) the product without the benefits derived from orphan status, would not generate sufficient return in the EU to justify the necessary investment in developing the medicinal product; and (iii) there exists no satisfactory authorized method of diagnosis, prevention, or treatment of the condition that has been authorized in the EU, or even if such method exists, the product will be of significant benefit to those affected by that condition.

Regulation (EC) No 847/2000 sets out further provisions for implementation of the criteria for designation of a medicinal product as an orphan medicinal product. An application for the designation of a medicinal product as an orphan medicinal product must be submitted at any stage of development of the medicinal product but before filing of an MAA. An MA for an orphan medicinal product may only include indications designated as orphan. For non-orphan indications treated with the same active pharmaceutical ingredient, a separate marketing authorization must be sought.

Orphan medicinal product designation entitles an applicant to incentives such fee reductions or fee waivers, protocol assistance, and access to the centralized marketing authorization procedure. Upon grant of a marketing authorization, orphan medicinal products are entitled to a ten-year period of market exclusivity for the approved therapeutic indication, which means that the EMA cannot accept another marketing authorization application or accept an application to extend for a similar product and the European Commission cannot grant a marketing authorization for the same indication for a period of ten years. The period of market exclusivity is extended by two years for orphan medicinal products that have also complied with an agreed PIP. No extension to any supplementary protection certificate can be granted on the basis of pediatric studies for orphan indications. Orphan medicinal product designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process.

The period of market exclusivity may, however, be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria on the basis of which it received orphan medicinal product destination, including where it can be demonstrated on the basis of available evidence that the original orphan medicinal product is sufficiently profitable not to justify maintenance of market exclusivity or where the prevalence of the condition has increased above the threshold. Additionally, an MA may be granted to a similar medicinal product with the same orphan indication during the 10 year period if: (i) if the applicant consents to a second original orphan medicinal product application, (ii) if the manufacturer of the original orphan medicinal product is unable to supply sufficient quantities; or (iii) if the second applicant can establish that its product, although similar, is safer, more effective or otherwise clinically superior to the original orphan medicinal product. A company may voluntarily remove a product from the register of orphan products.

Post-authorization Requirements

Where an MA is granted in relation to a medicinal product in the EU, the holder of the MA is required to comply with a range of regulatory requirements applicable to the manufacturing, marketing, promotion and sale of medicinal products. Similar to the United States, both MA holders and manufacturers of medicinal products are subject to comprehensive regulatory oversight by the EMA, the European Commission and/or the competent regulatory authorities of the individual EU Member States. The holder of an MA must establish and maintain a pharmacovigilance system and appoint an individual qualified person for pharmacovigilance who is responsible for oversight of that system. Key obligations include expedited reporting of suspected serious adverse reactions and submission of periodic safety update reports, or PSURs.

All new MAAs must include a risk management plan, or RMP, describing the risk management system that the company will put in place and documenting measures to prevent or minimize the risks associated with the product. The regulatory authorities may also impose specific obligations as a condition of the MA. Such risk-minimization measures or post-authorization obligations may include additional safety monitoring, more frequent submission of PSURs, or the conduct of additional clinical trials or post-authorization safety studies.

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In the EU, the advertising and promotion of medicinal products are subject to both EU and EU Member States’ laws governing promotion of medicinal products, interactions with physicians and other healthcare professionals, misleading and comparative advertising and unfair commercial practices. General requirements for advertising and promotion of medicinal products, such as direct-to-consumer advertising of prescription medicinal products are established in EU law. However, the details are governed by regulations in individual EU Member States and can differ from one country to another. For example, applicable laws require that promotional materials and advertising in relation to medicinal products comply with the product’s Summary of Product Characteristics, or SmPC, which may require approval by the competent national authorities in connection with an MA. The SmPC is the document that provides information to physicians concerning the safe and effective use of the product. Promotional activity that does not comply with the SmPC is considered off-label and is prohibited in the EU.

Clinical Trial Data Disclosure

Many jurisdictions have mandatory clinical trial information obligations incumbent on sponsors. In the EU, transparency requirements relating to clinical trial information are established in the CTR. The CTR establishes a general principle according to which information contained in CTIS shall be made publicly accessible unless confidentiality is justified on grounds of protecting personal data, or commercially confidential information, necessary to protect confidential communications between EU Member States in relation to the preparation of an assessment report, or necessary to ensure effective supervision of the conduct of a clinical trial by EU Member States. This confidentiality exception may be overruled if there is an overriding public interest in disclosure. The publication of data and documents in relation to the conduct of a clinical trial will take place in accordance with specific timelines. The timelines are established by the EMA and are determined based on the documents and the categorization of the clinical trial.

In addition, Regulation No. 1049/2001 on access to documents, or the ATD Regulation, and the related EMA policy 0043 on access to documents, provide for a wide right for EU-based interested parties to submit an access to documents request to the EMA to access certain information held by the EMA. Only very limited information is exempted from disclosure (i.e., commercially confidential information, which is construed increasingly narrowly and protected personal data). It is possible for competitors to access and use this data in their own research and development programs anywhere in the world, once these data are in the public domain.

Combination Products

The EU regulates medical devices and medicinal products separately, and through different legislative instruments. Products that are a combination of a medicinal product and a medical device may be regulated as either a medicinal product, a medical device or, subject to certain requirements, on the basis of both sets of rules. The applicable requirements governing placing a drug-device combination on the EU market will vary depending on the type of drug-device combination product and on which of the components of the combination has the primary mode of action.

Drug-device combination products that form a single integral product that is not reusable and for which the action of the medicinal product is principal to that of the medical device are governed by the regulatory framework applicable to medicinal products. However, the General Safety and Performance Requirements, or GSPRs, of Annex I to Regulation (EU) 2017/745 on Medical Devices, or MDR, will be applicable to the safety and performance of the medical device part of the product in the context of its use with the medicinal product. In these circumstances, an MAA must be submitted to the competent authorities responsible for evaluating the safety and effectiveness of medicinal products. As part of the MAA, the applicant must also submit, where available, the results of the assessment of the conformity of the medical device part of the product with the MDR contained in the manufacturer's EU Declaration of Conformity of the device or the relevant Certificate of Conformity issued by a Notified Body. If the MAA does not include the results of the conformity assessment, and where the conformity assessment of the device, if used separately, requires the involvement of a Notified Body, the competent authorities must require the applicant to provide a Notified Body Opinion on the conformity of the device with the relevant GSPRs. Based on this approach, the competent authorities responsible for medicinal products will review the specific aspects of the medical devices part of the product which are relevant to the safety and efficacy of the medicinal product and the Notified Body, where applicable, will evaluate the relevant GSPRs of the device.

Drug-device combination products that form a single integral product that is not reusable and for which the action of the medicinal products is ancillary to that of the medical device are governed by the regulatory framework applicable to medical devices in accordance with the MDR. However, the quality, safety and usefulness of the medicinal product must also be verified as part of the device and a scientific opinion from a national competent authority of an EU Member State or from the EMA, depending on its nature and therapeutic intention, must be sought regarding the quality and safety of the medicinal product, including the benefit or risk of its incorporation into the medical device. Where a medical device incorporates a medicinal product as an integral part as a single use drug delivery system, which is intended exclusively for use in the given combination and which is not reusable, it is regulated as a medicinal product. In this case, the relevant General Safety and Performance Requirements, or GSPRs of the MDR will apply to the safety and performance of the device element.

By contrast, drug-device combination products which do not form a single integral product will be regulated separately. This may include, for example a drug-device combination product where a medical device and a medicinal product are co-packaged

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and the medical device is intended solely to be used for the administration of the co-packaged medicinal product. In these circumstances, the medicinal product will be governed by the regulatory framework applicable to medicinal products and the medical device will be governed by the MDR. However, the characteristics of a medical device used for the administration of a medicinal product may impact the quality, safety and efficacy profile of the medicinal product. As a result, as part of the MAA submitted to the competent authorities for the medicinal product, the applicant may need to provide additional information regarding the characteristics of the co-packaged medical device that may impact on the quality, safety and/or efficacy of the medicinal product. Similar requirements may apply where the products are not co-packaged but the medicinal product information makes an explicit reference to a specific medical device.

Pharmaceutical Coverage, Pricing and Reimbursement

In the United States and markets in other countries, patients who are prescribed treatments for their conditions and providers performing the prescribed services generally rely on third-party payors to reimburse all or part of the associated healthcare costs. Patients are unlikely to use our products unless coverage is provided, and reimbursement is adequate to cover a significant portion of the cost of our products. Significant uncertainty exists as to the coverage and reimbursement status of products approved by the FDA and other government authorities. Even if our drug candidates are approved, sales of our products will depend, in part, on the extent to which third-party payors, including government health programs in the United States such as Medicare and Medicaid, commercial health insurers and managed care organizations, provide coverage, and establish adequate reimbursement levels for, such products. The process for determining whether a payor will provide coverage for a product is separate from the process for setting the price or reimbursement rate that the payor will pay for the product if coverage is approved. Third-party payors are increasingly challenging the prices charged, examining the medical necessity, and reviewing the cost-effectiveness of medical products and services and imposing controls to manage costs. Third-party payors may limit coverage to specific products on an approved list, also known as a formulary, which might not include all of the approved products for a particular indication.

In order to secure coverage and reimbursement for any product that might be approved for sale, a company may need to conduct expensive pharmacoeconomic studies in order to demonstrate the medical necessity and cost-effectiveness of the product, in addition to the costs required to obtain FDA or other comparable marketing approvals. Nonetheless, drug candidates may not be considered medically necessary or cost effective. A decision by a third-party payor not to cover our drug candidates could reduce physician utilization of our products once approved and have a material adverse effect on our sales, results of operations and financial condition. Additionally, 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 drug product does not assure that other payors will also provide coverage and reimbursement for the product, and the level of coverage and reimbursement can differ significantly from payor to payor. Third-party reimbursement and coverage may not be available to enable us to maintain price levels sufficient to realize an appropriate return on our investment in product development.

Within the United States, if we obtain appropriate approval in the future to market any of our drug product candidates, those products could potentially be covered by various government health benefit programs as well as purchased by government agencies. The participation in such programs or the sale of products to such agencies is subject to regulation.

The containment of healthcare costs also has become a priority of federal, state and foreign governments and the prices of drugs have been a focus in this effort. Governments have shown significant interest in implementing cost-containment programs, including price controls, restrictions on reimbursement and requirements for substitution of generic products. Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit a company’s revenue generated from the sale of any approved products. Coverage policies and third-party reimbursement rates may change at any time. Even if favorable coverage and reimbursement status is attained for one or more products for which a company or its collaborators receive marketing approval, less favorable coverage policies and reimbursement rates may be implemented in the future. Any reduction in reimbursement from Medicare and other government programs may result in a similar reduction in payments from private payors. The implementation of cost containment measures or other healthcare reforms may prevent the generation of revenue, attainment of profitability, or commercialization of products. In addition, it is possible that there will be further legislation or regulation that could harm the business, financial condition and results of operations.

Outside the United States, ensuring adequate coverage and payment for our drug candidates will face challenges. Pricing of prescription pharmaceuticals is subject to governmental control in many countries. Pricing negotiations with governmental authorities can extend well beyond the receipt of marketing approval for a product and may require us to conduct a clinical study that compares the cost effectiveness of our drug candidates or products to other available therapies. The conduct of such a clinical study could be expensive and result in delays in our commercialization efforts.

In the EU, pricing and reimbursement schemes vary widely from country to country. Some countries provide that products may be marketed only after a reimbursement price has been agreed. Some countries may require the completion of additional studies that compare the cost-effectiveness of a particular drug candidate to currently available therapies (so called HTA) in order to obtain reimbursement or approval. This HTA process is the procedure according to which the assessment of the public health impact,

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therapeutic impact and the economic and societal impact of use of a given medicinal product in the national healthcare systems of the individual country is conducted. The outcome of HTA regarding specific medicinal products will often influence the pricing and reimbursement status granted to these medicinal products by the competent authorities of individual EU Member States. For example, the EU provides options for its member states to restrict the range of products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use. EU member states may approve a specific price for a product or it may instead adopt a system of direct or indirect controls on the profitability of the company placing the product on the market. Other member states allow companies to fix their own prices for products but monitor and control prescription volumes and issue guidance to physicians to limit prescriptions. Recently, many countries in the EU have increased the amount of discounts required on pharmaceuticals and these efforts could continue as countries attempt to manage healthcare expenditures, especially in light of the severe fiscal and debt crises experienced by many countries in the EU. The downward pressure on healthcare costs in general, particularly prescription drugs, has become intense. As a result, increasingly high barriers are being erected to the entry of new products. Political, economic and regulatory developments may further complicate pricing negotiations, and pricing negotiations may continue after reimbursement has been obtained. Reference pricing used by various EU member states, and parallel trade (arbitrage between low-priced and high-priced member states), can further reduce prices. There can be no assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any of our products, if approved in those countries.

Healthcare Law and Regulation

Healthcare providers and third-party payors play a primary role in the recommendation and prescription of drug products that are granted marketing approval. Arrangements with providers, consultants, third-party payors and customers are subject to broadly applicable fraud and abuse, anti-kickback, false claims laws, reporting of payments to physicians, certain other healthcare providers and teaching hospitals and patient privacy laws and regulations and other healthcare laws and regulations that may constrain our business and/or financial arrangements. Restrictions under applicable federal and state healthcare laws and regulations, include the following:

•the U.S. federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, offering, paying, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made, in whole or in part, under a federal healthcare program such as Medicare and Medicaid;

•the federal civil and criminal false claims laws, including the civil False Claims Act, and civil monetary penalties laws, which prohibit individuals or entities from, among other things, knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false, fictitious or fraudulent or knowingly making, using or causing to made or used a false record or statement to avoid, decrease or conceal an obligation to pay money to the federal government;

•the federal HIPAA, which created additional federal criminal laws that prohibit, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters;

•HIPAA, as amended by the HITECH, which impose obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information;

•the federal transparency requirements known as the federal Physician Payments Sunshine Act, under the PPACA, which requires certain manufacturers of drugs, devices, biologics and medical supplies to report annually to the CMS, within the HHS, information related to payments and other transfers of value made by that entity to physicians (defined to include to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other healthcare providers (such as physician assistants and nurse practitioners), and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members;

•analogous state and foreign laws and regulations, such as state and foreign anti-kickback and false claims laws, which may apply to healthcare items or services that are reimbursed by non-governmental third-party payors, including private insurers; and

•outside the United States, interactions between pharmaceutical companies and health care professionals are also governed by strict laws, such as national anti-bribery laws of European countries, national sunshine rules, regulations, industry self-regulation codes of conduct and physicians’ codes of professional conduct. Failure to comply with these requirements could result in reputational risk, public reprimands, administrative penalties, fines or imprisonment.

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Some state and foreign laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the government in addition to requiring drug manufacturers to report information related to payments to physicians and other healthcare providers or marketing expenditures and pricing information. State and foreign laws also govern the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

Failure to comply with the aforementioned laws can result in the imposition of significant civil, criminal and administrative sanctions, damages, disgorgement, monetary fines, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, imprisonment, and integrity oversight and reporting obligations.

Healthcare Reform

A primary trend in the United States healthcare industry and elsewhere is cost containment. There have been a number of federal and state proposals during the last few years regarding the pricing of pharmaceutical and biopharmaceutical products, limiting coverage and reimbursement for drugs and other medical products, government control and other changes to the healthcare system in the United States.

In March 2010, the United States Congress enacted the PPACA, which, among other things, includes changes to the coverage and payment for drug products under government healthcare programs.

Since its enactment, there have been executive, legal and political challenges to certain aspects of the PPACA. On June 17, 2021, the U.S. Supreme Court dismissed a challenge on procedural grounds that argued the PPACA is unconstitutional in its entirety because the “individual mandate” was repealed by Congress. In addition, on August 16, 2022, President Biden signed the IRA into law, which among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in PPACA marketplaces through plan year 2025. The IRA also eliminates the “donut hole” under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and through a newly established manufacturer discount program. It is possible that the PPACA will be subject to judicial or Congressional challenges in the future. It is unclear how any such challenges and additional healthcare reform measures will impact the PPACA and our business. Other healthcare reform measures that may be adopted in the future could have a material adverse effect on our industry generally and on our ability to maintain or increase sales of our existing products that we successfully commercialize or to successfully commercialize our drug candidates, if approved.

Other legislative changes have been proposed and adopted in the United States since the PPACA was enacted. In August 2011, the Budget Control Act of 2011, among other things, created measures for spending reductions by Congress. A Joint Select Committee on Deficit Reduction, tasked with recommending a targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, was unable to reach required goals, thereby triggering the legislation’s automatic reduction to several government programs. This includes aggregate reductions of Medicare payments to providers up to 2% per fiscal year, which went into effect in April 2013 and will remain in effect through 2031, unless additional Congressional action is taken. Additionally, on March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 into law, which eliminates the statutory Medicaid drug rebate cap, currently set at 100% of a drug’s average manufacturer price, for single-source and innovator multiple source drugs, effective January 1, 2024. In addition, Congress is considering additional health reform measures.

In addition to the PPACA, there will continue to be proposals by legislators at both the federal and state levels, regulators and third-party payors to keep healthcare costs down while expanding individual healthcare benefits. For example, there has been increasing legislative and enforcement interest in the United States with respect to drug pricing practices. Specifically, there have been several recent presidential executive orders, Congressional inquiries, and proposed federal legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under Medicare, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drugs. For example, in July 2021, the Biden administration released an executive order, “Promoting Competition in the American Economy,” with multiple provisions aimed at prescription drugs. In response to Biden’s executive order, on September 9, 2021, HHS released a Comprehensive Plan for Addressing High Drug Prices that outlines principles for drug pricing reform and sets out a variety of potential legislative policies that Congress could pursue as well as potential administrative actions HHS can take to advance these principles. Further, the IRA will, among other things (i) allow HHS to negotiate the price of certain high-expenditure, single-source drugs and biologics covered under Medicare, and subject drug manufacturers to civil monetary penalties and a potential excise tax by offering a price that is not equal to or less than the “negotiated fair price” under the law and (ii) impose rebates with respect to certain drugs and biologics covered under Medicare Part B or Medicare Part D to penalize price increases that outpace inflation. On August 29, 2023, HHS announced the list of the first ten drugs that will be subject to price negotiations, although the Medicare drug price negotiation program is currently subject to legal challenges. It is unclear how the IRA will be effectuated but is likely to have a significant impact on the pharmaceutical industry. In response to the Biden administration’s October 2022 executive order, on February 14, 2023, HHS released a report outlining three new models for testing by the CMS Innovation Center which will be evaluated on their ability to lower the cost of drugs, promote accessibility, and improve quality of care. It is unclear whether the models will be utilized in any

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health reform measures in the future. Further, on December 7, 2023, the Biden administration announced an initiative to control the price of prescription drugs through the use of march-in rights under the Bayh-Dole Act. On December 8, 2023, the National Institute of Standards and Technology published for comment a Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights which for the first time includes the price of a product as one factor an agency can use when deciding to exercise march-in rights. While march-in rights have not previously been exercised, it is uncertain if that will continue under the new framework. At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical 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. Any reduction in reimbursement from Medicare and other government programs may result in a similar reduction in payments from private payors. The implementation of cost containment measures or other healthcare reforms may prevent the generation of revenue, attainment of profitability, or commercialization of products. In addition, it is possible that there will be further legislation or regulation that could harm the business, financial condition and results of operations.

In the EU, in December 2021, Regulation No 2021/2282 on HTA, or HTA Regulation, was adopted. The HTA Regulation is intended to boost cooperation among EU Member States in assessing health technologies, including new medicinal products, and providing the basis for cooperation at EU level for joint clinical assessments in these areas. When it enters into application in 2025, the HTA Regulation will be intended to harmonize the clinical benefit assessment of HTA Regulation across the EU.

Employees and Human Capital

Our human capital objectives include identifying, recruiting, retaining, incentivizing, and integrating our employees. Through equity incentive plans, we aim to attract, retain, and motivate selected staff. Our success hinges on retaining highly skilled employees, and we offer competitive salaries, bonuses, equity opportunities, development programs, and a comprehensive well-being package.

As of December 31, 2023, we had 32 total employees, of which 18 are in research and development and 14 are in general and administrative. Our employees are primarily located in South San Francisco, California, Medolla, Italy and Bresso Italy, and others work remotely from their residences located across the United States. None of our employees are represented by a labor union or are a party to a collective bargaining agreement and we believe that we have good relations with our employees.

On January 30, 2023, our Board approved a plan to reduce our workforce by approximately 47% as of such date, in order to preserve cash and to align operations with the change in our corporate strategy.

On October 20, 2023, upon the completion of the EryDel Acquisition, our headcount increased by 20 after the integration of the non-US employees, of which 16 are in research and development, while 4 are in general and administrative functions. Our newly acquired human capital is directly contributing to the advancement of our Phase 3 lead asset, EryDex, as an integral part of our proprietary drug-device combination technology platform.

Corporate Information

We were incorporated in Delaware on June 20, 2012. Our principal executive offices are located at 611 Gateway Blvd Suite 273, South San Francisco, CA 94080. Our telephone number at that location is (415) 910-5717. Our corporate website address is www.quincetx.com. Information contained on, or that may be accessed through, our website is not incorporated by reference into this Annual Report on Form 10-K and should not be considered a part of this Annual Report on Form 10-K.

Quince is a registered trademark of Quince Therapeutics, Inc. All other brand names or trademarks appearing in this Annual Report on Form 10-K are the property of their respective holders. Solely for convenience, the trademarks and trade names in this Annual Report on Form 10-K are referred to without the ® and ™ symbols, but such references should not be construed as any indicator that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto.

Item 1A. Risk Factors.

Our operations and financial results are subject to various risks and uncertainties, including those described below that could adversely affect our business, financial condition, results of operations, cash flows and the trading price of our common stock. You should carefully consider the following risks, together with all of the other information in this Annual Report on Form 10-K, including our consolidated financial statements and the related notes included elsewhere in this Annual Report on Form 10-K.

Risks Relating to Our Business

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We may experience difficulties integrating Quince and EryDel’s operations and realizing the expected benefits of the EryDel Acquisition.

The success of the EryDel Acquisition will depend in part on our ability to realize the expected operational efficiencies and associated cost synergies and anticipated business opportunities and growth prospects from the EryDel Acquisition in an efficient and effective manner. We may not be able to fully realize the operational efficiencies and associated cost synergies or leverage the potential business opportunities and growth prospects to the extent anticipated or at all.

Challenges associated with the integration may include those related to retaining and motivating executives and other key employees, blending corporate cultures, eliminating duplicative operations, and making necessary modifications to internal control over financial reporting and other policies and procedures in accordance with applicable laws. Some of these factors are outside our control, and any of them could delay or increase the cost of our integration efforts. The integration process could take longer than anticipated and could result in the loss of key employees, the disruption of each company’s ongoing businesses, increased tax costs, inefficiencies, and inconsistencies in standards, controls, information technology systems, policies and procedures, any of which could adversely affect our ability to maintain relationships with employees or third parties, or our ability to achieve the anticipated benefits of the transaction, and could harm our financial performance. If we are unable to successfully integrate certain aspects of the operations of EryDel, including relevant human resource functions, or experience delays, we may incur unanticipated liabilities and be unable to fully realize the potential benefit of future revenue and other anticipated benefits resulting from the arrangement, and our business, results of operations and financial condition could be adversely affected.

We are substantially dependent on the success of our lead drug candidate, EryDex.

Our business and future success depends on our ability to successfully develop, obtain regulatory approval for and successfully commercialize our lead drug candidate, EryDex, which is under clinical development for A-T. EryDex is our only drug candidate in late-stage clinical development, and our business currently depends heavily on its successful development. In the previous Phase 3 ATTeST trial, the trial did not meet the primary efficacy endpoint. The trial saw statistically significant results in the age group of six to nine years old and we expect to initiate the NEAT study in this population in the second quarter 2024. We expect to announce the results of the NEAT study in the second half of 2025, but cannot guarantee that the results of this study will be positive or that they will allow further development in this therapeutic indication.

EryDex will require additional clinical and non-clinical development, regulatory review and approval in multiple jurisdictions, substantial investment, access to sufficient commercial manufacturing capacity and significant marketing efforts before we can generate any revenue from product sales. We cannot be certain EryDex will receive regulatory approval or be successfully commercialized even if we receive regulatory approval. In addition, because EryDex is our most advanced drug candidate, and because our other drug candidates are based on the same AIDE platform technology, if EryDex encounters safety or efficacy problems, developmental delays or regulatory issues or other problems, our development plans and business would be significantly harmed.

We have no drug candidates approved for commercial sale, we have never generated any revenue from sales, and we may never be profitable.

We have no drug candidates approved for sale, have never generated any revenue from sales, have never been profitable and do not expect to be profitable in the foreseeable future. We have incurred net losses in each year since our inception. For the years ended December 31, 2023 and 2022, our net losses were $31.4 million and $51.7 million, respectively. We had an accumulated deficit of $319.6 million as of December 31, 2023.

Before we are able to generate any revenue, we will need to commit substantial funds to the anticipated clinical and development activities related to EryDex, and we may not be able to obtain sufficient funds on acceptable terms, if at all. Any additional debt financing or additional equity that we raise may contain terms that are not favorable to us and/or result in dilution to our stockholders.

We expect that it could take several years, if ever, before we may have a drug candidate ready for commercialization. We expect to continue to incur losses for the foreseeable future, and we expect these losses to increase as we pursue our current strategic direction, and seek regulatory approvals for any drug candidates, prepare for and begin the commercialization of any approved drug candidates, and add infrastructure and personnel to support our drug development efforts and operations as a public company. We anticipate that any such losses could be significant for the next several years. These net losses and negative cash flows have had, and will continue to have, an adverse effect on our stockholders’ equity and working capital. Further, these net losses have fluctuated significantly in the past and are expected to continue to significantly fluctuate from quarter-to-quarter or year-to-year. To become and remain profitable, we must develop and eventually commercialize a drug with significant revenue.

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We may never succeed in developing a commercial drug. On January 25, 2022, the FDA placed a full clinical hold on the IND for atuzaginstat (COR388), one of our assets that has since been out-licensed. On March 8, 2023 The FDA placed a partial clinical hold on the IND for EryDex related to extractables and leachables of new components used in the EryKit. The FDA subsequently lifted the partial clinical hold on September 23, 2023. Additionally, the Phase 3 ATTeST study conducted by EryDel failed to meet the primary endpoint. The FDA may place additional clinical holds on our current or currently contemplated clinical programs or otherwise limit our ability to proceed with other clinical programs in our pipeline, which will harm our business, financial condition, results of operations and may force us to cease our operations.

We expect to explore partnership and licensing opportunities to support the future development of EryDex and other drug candidates. We may also encounter other unforeseen expenses, difficulties, complications, delays and other known and unknown challenges as we pursue our current strategic direction.

There are numerous risks and uncertainties, we are unable to accurately predict the timing or amount of increased expenses or when, or if, we will be able to generate revenues or achieve profitability. If we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis and we will continue to incur substantial research and development and other expenditures to develop and market additional drug candidates.

We may be required to make milestone payments to the EryDel Shareholders or pursuant to the EIB Facility in connection with our development and commercialization of EryDex, which could adversely affect the overall profitability of EryDex, if approved.

In connection with the EryDel Acquisition, we may be required to make additional payments to EryDel Shareholders of up to an aggregate of $485.0 million in potential cash payments, comprised of up to $5.0 million upon the achievement of a specified development milestone, $25.0 million at NDA acceptance, up to $60.0 million upon the achievement of specified approval milestones, and up to $395.0 million upon the achievement of specified on market and sales milestones, with no royalties paid to EryDel. These milestone obligations could impose substantial additional costs on us, divert resources from other aspects of our business, and adversely affect the overall profitability of EryDex, if approved. We may need to obtain additional financing to satisfy these milestone payments, and cannot be sure that any additional funding, if needed, will be available on terms favorable to us, or at all.

Additionally, in connection with the EIB Facility, we are also required to make additional payments to the EIB consisting of (i) interest payments on the outstanding loans thereunder, (ii) payments based on a percentage of the revenue derived from the acquisition of EryDel USA, Inc. on July 21, 2023, which will be payable annually with respect to the immediately preceding fiscal year commencing on June 30, 2027, and (iii) repayments of the principal amount of the loans under the EIB Facility upon the occurrence of certain events. The occurrence of certain events of default under the EIB Facility, including failure to make payments as they become due (subject to a grace period of three (3) business days) to the EIB, would result in the EIB having the right to accelerate and demand immediate payment of all outstanding obligations, together with accrued interest, if any, and any prepayment fees, under the EIB Facility. We may need additional funding in order to make such payments.

Our future results could suffer if we do not effectively manage our operations.

In connection with our new strategic pursuits, we may expand our size and operations through the EryDel Acquisition. Our future success depends, in part, upon our ability to manage such expanded business, which may pose substantial challenges for management, including challenges related to the management and monitoring of new operations and associated increased costs and complexity. There can be no assurances that we will be successful or that we will realize the expected synergies and other benefits anticipated from any future acquisitions or strategic transactions that we may undertake in the future.

Our financial results have been in the past and may in the future be adversely affected by impairment charges from the recording of goodwill and intangible assets.

Our financial results have been in the past and may in the future be adversely affected by impairment charges from the recording of goodwill and intangible assets incurred in connection with acquisitions. For example, we incurred a $0.8 million goodwill impairment charge in the quarter ended September 30, 2022 and a $5.9 million IPR&D Intangible Asset impairment charge for the quarter ended March 31, 2023 in connection with the Novosteo Acquisition. Further, our failure to identify or accurately assess the magnitude of necessary technology investments we assumed as a result of the EryDel Acquisition could result in unexpected litigation or regulatory exposure, unfavorable accounting charges, a loss of anticipated tax benefits or other adverse effects on our business, operating results or financial condition.

Risks Related to the Development of Our Drug Candidates

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The Phase 3 NEAT clinical trial of EryDex for A-T will be conducted under a protocol negotiated with FDA by EryDel and our execution of the trial may be delayed, may not be successful, and may not result in NDA approval, with adverse results for our business and share price.

With the acquisition of our Phase 3 lead asset, EryDex, we intend to initiate the Phase 3 NEAT clinical trial in the first half of 2024. The NEAT protocol is the subject of an SPA, agreement with FDA. The FDA may revoke or alter its SPA agreement under the following circumstances:

•public health concerns emerge that were unrecognized at the time of the protocol assessment, or the director of the review division determines that a substantial scientific issue essential to determining safety or efficacy has been identified after testing has begun;

•a sponsor fails to follow a protocol that was agreed upon with the FDA; or

•the relevant data, assumptions, or information provided by the sponsor in a request for SPA change, are found to be false statements or misstatements, or are found to omit relevant facts.

 

A documented SPA may be modified, and such modification will be deemed binding on the FDA review division, except under the circumstances described above, if the FDA and the sponsor agree in writing to modify the protocol and such modification is intended to improve the study. An SPA, however, does not guarantee that a trial will be successful, and our execution of the Phase 3 NEAT clinical trial may be delayed and even if successful may not result in approval by the FDA.

We, or any future development partner with whom we enter into a related agreement, are required to conduct clinical and nonclinical trials in accordance with the study plan and protocols and applicable regulatory requirements. The FDA or comparable regulatory authorities outside the U.S., including in the EU, may disagree with the design or implementation of our or any of our future development partners’ clinical trials. We or any of our future development partners may be unable to demonstrate to the satisfaction of the FDA or other regulatory authorities outside the U.S., including in the EU, that a product candidate is safe and effective for any indication.

In addition, we are responsible for ensuring that each of our nonclinical studies and clinical trials are conducted in accordance with the study plan and protocols and applicable regulatory requirements and that drug candidates are manufactured and tested in accordance with applicable GMP requirements and other applicable regulatory requirements. If we or any future development partner are unable to demonstrate that our candidate drugs were manufactured and clinical trials were conducted in accordance with applicable regulations we may be unable to submit appropriate evidence to support applications for drug approval and the authorities may reject or related applications.

Clinical drug development is a lengthy, expensive and uncertain process. The results of preclinical studies and early clinical trials are not always predictive of future results. Any drug candidate that we may advance into clinical trials may not achieve favorable results in later clinical trials, if any, or receive marketing approval.

The research and development of drugs is extremely risky. Only a small percentage of drug candidates that enter the

development process ever receive marketing approval. Before obtaining marketing approval from regulatory authorities for the sale of any drug candidate, we must complete preclinical development and then conduct extensive clinical trials to demonstrate the safety and efficacy of our drug candidates in humans. Clinical testing is expensive and can take many years to complete, and its outcome is inherently uncertain.

The results of preclinical studies and completed clinical trials are not necessarily predictive of future results, and our

current drug candidate may not be further developed or have favorable results in later studies or trials. Clinical trial failure may result from a multitude of factors including, but not limited to, flaws in study design, dose selection, placebo effect, patient enrollment criteria and failure to demonstrate favorable safety or efficacy traits. As such, failure in clinical trials can occur at any stage of testing. The Phase 3 ATTeST clinical trial conducted by EryDel failed to meet the primary endpoint and was potentially negatively affected by missing date during the COVID-19 pandemic. Several companies in the pharmaceutical industry have suffered setbacks in the advancement of their drug candidates into later-stage clinical trials due to lack of efficacy or adverse safety profiles, notwithstanding results in earlier preclinical studies or clinical trials. In addition, data obtained from preclinical trials and clinical trials are susceptible to varying interpretations, and regulatory authorities may not interpret our data as favorably as we do, which may further delay, limit or prevent development efforts, clinical trials or marketing approval. Furthermore, as more competing drug candidates within a particular class of drugs proceed through clinical development to regulatory review and approval, the amount and type of clinical data that may be required by regulatory authorities may increase or change.

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If we are unable to complete preclinical studies or clinical trials of any future drug candidates, due to safety or efficacy

concerns, or if the results of these trials are not sufficient to convince regulatory authorities of their safety or efficacy, we will not be able to obtain marketing approval for commercialization on a timely basis or at all. Even if we are able to obtain marketing approval for our current and any future drug candidates, those approvals may be for indications or dose levels that deviate from our desired approach or may contain other limitations that would adversely affect our ability to generate revenue from sales of those drug candidates.

Results in earlier clinical trials may not be indicative of the results that may be obtained in registrational clinical trials, which may delay or prevent obtaining regulatory approval.

Clinical development is expensive and can take many years to complete, and its outcome is inherently uncertain. Failure can occur at any time during the clinical trial process. Success in preclinical studies and early clinical trials may not be predictive of results in larger clinical trials, and previous results from early or small clinical trials may not be replicated or show as favorable an outcome in further clinical trials, even if successful. For example, EryDel had previously endeavored to develop EryDex for the potential treatment of A-T. While we have not seen evidence of significant safety concerns throughout EryDex Phase 3 clinical development for A-T, it failed to meet the primary endpoint, but showed statistically effective results in a certain population, six to nine years old. We plan to conduct a Phase 3 NEAT clinical trial in the population (i.e. six to nine years old) that was found to be statistically effective. However, further studies in this population may not replicate previous results. Accordingly, the previous clinical trials that EryDel conducted may not have uncovered safety issues, even if they exist. The biochemical pathways that we believe are affected by EryDex are implicated in a variety of biological processes and disease conditions, and it is possible that the use of our drug candidates to treat larger numbers of patients will demonstrate unanticipated AEs, which may negatively affect their safety profile.

Many companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in late-stage clinical trials after achieving positive results in early-stage development, or after achieving positive results in pivotal trials, and we have had, and may face, similar setbacks. In addition, the patient populations under investigation with EryDex have many co-morbidities that may cause severe illness or death, which may be attributed to EryDex in a manner that negatively affects the safety profile of our drug candidate. If the results of our ongoing or future clinical trials for EryDex are inconclusive with respect to efficacy, if we do not meet our clinical endpoints with statistical significance, or if there are unanticipated safety concerns or AEs that emerge during clinical trials, we may be prevented from or delayed in obtaining marketing approval, and even if we obtain marketing approval, any sales may suffer.

We will incur additional costs and may experience delays in completing, or ultimately be unable to complete, the development and commercialization of our drug candidates.

The risk of failure is high for any drug candidates we may acquire that are in clinical and preclinical development. The clinical trials and manufacturing of our drug candidates are, and the manufacturing and marketing of our drug candidates, if approved, will be, subject to extensive and rigorous review and regulation by numerous government authorities in the United States and in other countries where we intend to test and market our drug candidates. Before obtaining regulatory approvals for the commercial sale of any of our drug candidates, we must demonstrate thorough lengthy, complex and expensive preclinical testing and clinical trials that our drug candidates are both safe and effective for use in each target indication. We may not be able to develop a trial design that the FDA and other foreign regulatory authorities can accept. Each drug candidate must demonstrate an adequate risk versus benefit profile in its intended patient population and for its intended use.

Clinical trials are expensive and can take many years to complete, and their outcomes are inherently uncertain. We cannot guarantee that any future clinical trials will be conducted as planned or completed on schedule, if at all. Failure can occur at any time during the clinical trial process. For example, on January 25, 2022, the FDA placed a full clinical hold on the IND for atuzaginstat (COR388). Additionally, the Phase 2/3 study with COR388 in Alzheimer’s disease failed to meet the primary endpoint. COR388 is one of our assets that has since been out-licensed. On March 8, 2023 The FDA placed a partial clinical hold on the IND for EryDex related to extractables and leachables of new components used in the EryKit. The FDA subsequently lifted the partial clinical hold on September 23, 2023. Additionally, the Phase 3 ATTeST study conducted by EryDel failed to meet the primary endpoint. Even if any future clinical trials are completed as planned, we cannot be certain that their results will support the safety and effectiveness of our potential drug candidates for their targeted indications or support continued clinical development of such drug candidates. Our ongoing and any future clinical trial results may not be successful.

In addition, even if such trials are successfully completed, we cannot guarantee that the FDA or foreign regulatory authorities will interpret the results as we do, and more trials could be required before we submit our drug candidates for approval. Moreover, results acceptable to support approval in one jurisdiction may be deemed inadequate by another regulatory authority to support regulatory approval in that other jurisdiction. To the extent that the results of the trials are not satisfactory to the FDA or

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foreign regulatory authorities for support of a marketing application, we may be required to expend significant resources, which may not be available to us, to conduct additional trials in support of potential approval of our drug candidates.

If we are required to conduct preclinical studies, clinical trials or other testing of our drug candidates beyond those that we currently contemplate, if we are unable to successfully complete preclinical studies, clinical trials of our drug candidates or other testing, if the results of these trials or tests are not positive or are only modestly positive or if there are safety of efficacy concerns, we may:

•be delayed in obtaining marketing approval for our drug candidates;

•not obtain marketing approval at all or regulatory authorities may suspend, vary or withdraw marketing approvals for approved products;

•obtain approval for indications, dosages or patient populations that are not as broad as intended or desired;

•obtain approval with labeling that includes significant use or distribution restrictions or safety warnings, including boxed warnings;

•be subject to additional post-marketing testing requirements; or

•have the medicine removed from the market after obtaining marketing approval.

Drug development costs will also increase if we experience delays in testing or in obtaining marketing approvals. We do not know whether any clinical trials will begin as planned, will need to be amended or will be completed on schedule, or at all. Significant preclinical studies and clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize our drug candidates, could allow our competitors to bring drug candidates to market before we do, and could impair our ability to successfully commercialize our drug candidates, if approved, any of which may harm our business and results of operations. In addition, many of the factors that cause, or lead to a delay in the commencement or completion of, clinical trials may also ultimately lead to termination or suspension of a clinical trial. Any of these occurrences may harm our business, financial condition and prospects significantly. Any termination of any clinical trial of our drug candidates will harm our commercial prospects and our ability to generate revenues.

Our drug candidates may cause or have attributed to them undesirable side effects or have other properties that delay or prevent their regulatory approval or limit their commercial potential.

Undesirable side effects caused by our drug candidates or that may be identified as related to our drug candidates by investigators conducting our clinical trials or even related to competing products in development that utilize a similar mechanism of action or act through a similar biological disease pathway could cause us or regulatory authorities to interrupt, delay, or halt clinical trials and could result in the delay or denial of regulatory approval by the FDA or other regulatory authorities and potential product liability claims. AEs and SAEs that emerge during treatment with our drug candidates or other compounds acting through similar biological pathways may be deemed to be related to our drug candidate. This may require longer and more extensive Phase 3 clinical development, or regulatory authorities may increase the amount of data and information required to approve, market, or maintain our drug candidates and could result in negative labeling or a restrictive REMS or comparable foreign strategy. This may also result in an inability to obtain approval of our drug candidates.

The occurrence of any or all of these events may cause the development of our drug candidates to be delayed or terminated, which could materially and adversely affect our business and prospects. Our drug candidates have in the past and may in the future be deemed to cause AEs and SAEs.

Clinical trials of our drug candidates may not uncover all possible AEs that patients may experience.

Clinical trials are conducted in representative samples of the potential patient population, which may have significant variability. By design, clinical trials are based on a limited number of subjects and are of limited duration of exposure to the product, to determine whether the drug candidate demonstrates the substantial evidence of efficacy and safety necessary to obtain regulatory approval. As with the results of any statistical sampling, we cannot be sure that all side effects of our drug candidates may be uncovered. It may be the case that only with a significantly larger number of patients exposed to the drug candidate for a longer duration may there be a more complete safety profile be identified. Further, even larger clinical trials may not identify rare SAEs, and the duration of such studies may not be sufficient to identify when those events may occur. Other products have been approved by the regulatory authorities for which safety concerns have been uncovered following approval. Such safety concerns have led to labeling changes, restrictions on distribution through use of a REMS, or comparable foreign strategy, or withdrawal of products from the market, and any of our drug candidates may be subject to similar risks.

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Although to date we have not seen evidence of significant safety concerns with our drug candidates in the patient populations currently undergoing clinical trials with EryDex, if approved, may experience previously unreported adverse reactions, and it is possible that the FDA or other regulatory authorities may ask for additional safety data as a condition of, or in connection with, our efforts to obtain approval of our drug candidates. If safety problems occur or are identified after our products, if any, reach the market, we may make the decision or be required by regulatory authorities to amend the labeling of our products, recall our products, or even withdraw approval for our products.

If we are not able to successfully demonstrate a favorable differentiation between EryDex and currently available corticosteroids, our business would be harmed and our ability to generate revenue from that class of drugs would be severely impaired.

Our business model is to pursue the development of off-patent drugs for which we would directly pursue the development of a red blood cell encapsulated formulation through the FDA’s 505(b)(2) regulatory pathway. In order to receive sufficient reimbursement and utilization, our drug candidates, will require showing differentiation against currently available generic products. If we are not able to differentiate EryDex from currently available corticosteroids by showing a safety or efficacy benefit that is reflected in the approved label, our business would be harmed and our ability to generate revenue from that class of drugs would be severely impaired.

Because the potential rare disease target patient populations of EryDex are small, and the addressable patient population even smaller, we may not be able to effectively complete clinical trials or commercialize the drug candidate.

EryDex is in development for rare disease. Our projections of both the number of people who have these diseases, as well as the subset of people with these diseases who have the potential to benefit from treatment with EryDex are based on our beliefs and estimates. These estimates have been derived from a variety of sources, including the scientific literature, or patient foundations, and may prove to be incorrect or contain errors. New studies have in the past and may continue to change the estimated incidence or prevalence of these diseases. We cannot accurately predict the number of patients for whom treatment might be possible. Additionally, since the potentially addressable patient population for this drug candidate is limited, we may fail to enroll a sufficient number of patients in our clinical trials in a timely manner. Furthermore, even if we successfully develop this asset, and obtain commercial approval, we may not be able to achieve significant market share for EryDex. Because the potential target populations are very small, we may not effectively complete clinical trials on a timely basis or at all and may not realize any significant return from the development or potential commercialization of this asset.

Risks Relating to Our Financial Position

We are a clinical stage biotechnology company and have a limited history operating a newly acquired business, which may make it difficult to evaluate the prospects for our future viability.

From our inception, we have been focused on novel therapeutic approaches to improve the lives of patients diagnosed with Alzheimer’s and other degenerative diseases. After the Novosteo Acquisition in 2022, we shifted our operational focus on the development of our bone-targeting drug platform and lead compound NOV004 for development for rare skeletal diseases, bone fractures, and injury. In January 2023, we made a strategic decision to out-license our bone-targeting drug platform and prioritize capital resources toward the expansion of our development pipeline through the completion the acquisition of EryDel in October 2023. We have a limited history operating our newly acquired business, which may make it difficult to evaluate the success of our business to date and assess our future viability. Drug development is a highly uncertain undertaking and involves a substantial degree of risk. To date, we have only initiated two late-stage clinical trials, one of which was initiated by EryDel, and we have not obtained marketing approval for any drug candidate, manufactured a commercial scale drug candidate, arranged for a third party to do so on our behalf, or conducted sales and marketing activities necessary for successful drug candidate commercialization. Our short operating history as a company makes any assessment of our future success and viability subject to significant uncertainty. We will encounter risks and difficulties frequently experienced by clinical stage biotechnology companies in rapidly evolving fields, and we have not yet demonstrated an ability to overcome such risks and difficulties successfully. If we do not address these risks and difficulties successfully, our business will suffer.

We will require substantial additional funding to finance our operations and evaluate future drug candidates. If we are unable to raise this funding when needed or on acceptable terms, we may be forced to delay, reduce or eliminate our drug development programs or other operations.

Since our inception, we have used substantial amounts of cash to fund our operations, and we expect our expenses to increase substantially in the foreseeable future in connection with our ongoing activities, particularly as we evaluate and develop drug candidates. In addition, if we obtain marketing approval for any future drug candidates, we expect to incur significant commercialization expenses related to sales, marketing, manufacturing and distribution.

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Further development of EryDex will require us to incur significant additional expenses. Moreover, we expect to require substantial additional funding to finance such payments and to advance the development and optimize the commercialization of EryDex, and there can be no assurance that such additional funding will be available on terms that are acceptable to us, or at all. If adequate funds are not available on a timely basis, we may not be able to effectively implement our strategic plan.

Accordingly, we will need to obtain substantial additional funding in order to fully execute on our corporate strategy. As of December 31, 2023, we had $75.1 million in cash, cash equivalents and investments. Our balance sheet includes publicly-traded corporate debt securities. We may be required to recognize impairments in the value of these investments if the relevant companies are materially adversely affected, become unable to repay debt securities when due, or experience credit rating downgrades, or if the public trading price of these securities decreases.

We believe that our existing capital resources will be sufficient to fund our projected operations, which would include anticipated clinical and development activities related to EryDel's lead asset through the Phase 3 NEAT clinical trial, into 2026. However, changing circumstances may cause us to increase our spending significantly faster than we currently anticipate, and we may need to spend more money than currently expected because of circumstances beyond our control. We may need to raise additional funds sooner than we anticipate if we choose to expand more rapidly than we presently anticipate. The amount and timing of our future funding requirements will depend on many factors, some of which are outside of our control, including but not limited to:

•the rate of progress in the development of and the conduct of clinical trials with respect to our product candidates;

•our ability to successfully identify partnership and licensing opportunities to support the future development of EryDex;

•the outcome, costs and timing of seeking and obtaining FDA and any other regulatory approvals;

•the number and characteristics of drug candidates that we acquired or pursue;

•our ability to manufacture sufficient quantities of our drug candidates and devices;

•our need to expand our research and development activities;

•the costs associated with securing and establishing commercialization and manufacturing capabilities;

•the costs of acquiring, licensing or investing in businesses, drug candidates and technologies;

•our ability to maintain, expand and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make, or that we may receive, in connection with the licensing, filing, prosecution, defense and enforcement of any patents or other intellectual property rights;

•our need and ability to retain management and hire scientific and clinical personnel;

•the effect of competing drugs and drug candidates and other market developments;

•our need to implement additional internal systems and infrastructure, including financial and reporting systems;

•the costs to grow our organization and increase the size of our facilities to meet our anticipated growth;

•the economic and other terms, timing of and success of any collaboration, licensing or other arrangements into which we may enter in the future; and

•our ability and timing of future milestones payments to EryDel shareholders and repayment of obligations in respect of the EIB Facility.

Additional funding may not be available to us on acceptable terms or at all. Any such funding may result in dilution to

stockholders, imposition of debt covenants and repayment obligations, or other restrictions that may affect our business. We also could be required to seek funds through arrangements with collaborative partners or otherwise that may require us to relinquish rights to some of our technologies or drug candidates or otherwise agree to terms unfavorable to us.

The terms of the EIB Facility place restrictions on our operating and financial flexibility.

In connection with the EIB Facility, we are subject to operating restrictions and covenants that restrict our ability to finance our operations, engage in business activities or expand or fully pursue its business strategies. For example, unless we get approval from EIB, the EIB Facility limits our ability to, among other things:

•incur additional debt or provide guarantees in respect of debt;

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•incur liens;

•make investments, acquisitions, loans or advances;

•sell assets;

•make distributions to equity holders, including dividends and distributions on, and redemptions, repurchases or retirement of, our capital stock;

•enter into certain hedging transactions;

•enter into fundamental changes, including mergers and consolidations;

•enter into transactions with affiliates;

•change the nature of our business; and

•change our management.

In addition, the EIB Facility requires that we meet certain reporting and operating covenants, including an obligation to maintain a certain minimum unrestricted balance of cash or cash equivalents. Our ability to comply with these covenants may be affected by events beyond our control, and we may not be able to meet those covenants.

The EIB Facility includes customary events of default, including failure to pay principal, interest or certain other amounts when due; material inaccuracy of representations and warranties; breach of covenants; cross-default to other indebtedness (resulting in a right of the other lender to accelerate such indebtedness after giving effect to any grace periods); certain bankruptcy and insolvency events; certain undischarged judgments; and material adverse change. A breach of any of these covenants could result in an event of default under the EIB Facility. If an event of default occurs and is ongoing under the terms of the Finance, EIB may accelerate all of the obligations of EryDel thereunder and demand payment from us pursuant to the guarantees. Any declaration by the lender of an event of default could significantly harm our business and prospects and could cause the price of our common stock to decline.

Unstable market and global economic conditions, including adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults or non-performance by financial institutions, may have adverse consequences on our business, financial condition and stock price.

The global credit and financial markets have experienced volatility, including as a result of the COVID-19 pandemic, changes in interest rates, and economic inflation, which has included diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, high inflation, uncertainty about economic stability and changes in unemployment rates. The financial markets and the global economy may also be adversely affected by the current or anticipated impact of military conflict, acts of terrorism or other geopolitical events. Sanctions imposed by the United States and other countries in response to such conflicts, including the one in Ukraine, may also continue to adversely impact the financial markets and the global economy, and any economic countermeasures by the affected countries or others could heighten market and economic instability. There can be no assurance that further deterioration in credit and financial markets and confidence in economic conditions will not occur. Our business strategy may be adversely affected by any such economic downturn, volatile business environment or continued unpredictable and unstable market conditions. Failure to secure any necessary financing in a timely manner could have a material adverse effect on our growth strategy, financial performance and stock price.

We regularly maintain cash balances at third-party financial institutions in excess of the FDIC insurance limit. Although we assess our banking relationships as we believe necessary or appropriate, our access to funding sources in amounts adequate to finance or capitalize our current and projected future business operations could be significantly impaired by factors that affect us, the financial institutions with which we have arrangements directly, or the financial services industry or economy in general. These factors could involve financial institutions or financial services industry companies with which we have financial or business relationships, but could also include factors involving financial markets or the financial services industry generally.

Our failure to maintain certain tax benefits applicable to Italian biotechnology companies may adversely affect our results of operations, our cash flows and our financial condition.

As a Company with an Italian biotechnology subsidiary, we have benefited from certain tax advantages, including, for example, the R&D tax credit, which an Italian tax credit aimed at stimulating research and development. The R&D tax credit can be offset payments of certain taxes and contributions (e.g., social contributions, VAT payables, registration fees, income and withholding taxes and all other tax-related items that companies usually pay monthly). For eligible research and development activities, the tax credits were equal to 20% of the costs incurred in fiscal years 2022 and 2021, with a maximum annual amount of $4.4 million (Euro 4

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million). In 2023 the tax credit rate was decreased to 10% of the eligible expenses for certain activities, and the annual ceiling of the credit increased to $5.5 million (EUR 5 million). Expenses incurred by the Company for years ended December 31, 2021, 2022, and 2023 generated a total tax credit amounting to $2.0 million (Euro 1.8 million), $1.1 million (Euro 1 million), and $877,000 (Euro 800k), respectively. The Italian tax authorities may audit each research and development program in respect of which a R&D tax credit has been claimed and assess whether such program qualifies in its view for the R&D tax credit. The Italian tax authorities may challenge our eligibility for, or our calculation of, certain tax reductions or deductions in respect of our research and development activities. Should the Italian tax authorities be successful, the R&D tax credit, may be reduced, which would have a negative impact on our results of operations and future cash flows. We believe, due to the nature of our business operations, that we will continue to be eligible to receive the R&D tax credit. However, if the Italian government decides to eliminate, or to reduce the scope or the rate of, the R&D tax credit, either of which it could decide to do at any time, our results of operations could be adversely affected.

Risks Relating to Regulatory Review and Approval of Our Drug Candidates and Other Legal Compliance Matters

We cannot be certain that the FDA or foreign regulatory authorities will permit us to proceed with any current or future proposed clinical trial designs. Our drug candidates may not receive regulatory approval, and without regulatory approval we will not be able to market our drug candidates.

We currently have no drug candidates approved for sale and we cannot guarantee that we will ever have marketable drug

candidates. Our ability to generate revenue related to sales, if ever, will depend on the successful development and regulatory approval of our drug candidates.

The development of a drug candidate and issues relating to its approval and marketing are subject to extensive regulation by the FDA in the United States and regulatory authorities in other countries, with regulations differing from country to country. We are not permitted to market any drug candidates in the United States until we receive approval of an NDA from the FDA. Similar requirements apply in foreign countries. We have not submitted any marketing applications for a drug candidate.

Because EryDex utilizes DSP, we believe it will qualify for FDA approval through the FDA’s 505(b)(2) regulatory pathway and through corresponding regulatory paths in other foreign jurisdictions. The clinical requirements for a 505(b)(2) drug candidate can vary widely from product to product depending primarily on whether the drug candidate claims a new indication, provides for a different route of administration, or claims improved safety compared to the existing approved product, and may include bioequivalence trials, limited safety and efficacy trials, or full Phase 1 through 3 trials.

NDAs must include extensive preclinical and clinical data and supporting information to establish the drug candidate’s safety and effectiveness for each desired indication. NDAs must also include significant information regarding the chemistry, manufacturing and controls for the drug. Obtaining approval of an NDA is a lengthy, expensive and uncertain process, and we may not be successful in obtaining approval. The FDA review processes can take years to complete and approval is never guaranteed. If we submit an NDA to the FDA, the FDA must decide whether to accept or reject the submission for filing. We cannot be certain that any submissions will be accepted for filing and review by the FDA. Regulators of other jurisdictions may impose similar requirements and have their own procedures for approval of drug candidates. Even if a drug is approved, the FDA or a comparable foreign regulatory authority may limit the indications for which the drug may be marketed, require extensive warnings on the drug labeling or require expensive and time-consuming clinical trials or reporting as conditions of approval. Regulatory authorities in countries outside of the United States also have requirements for approval of drug candidates with which we must comply prior to marketing in those countries. Obtaining regulatory approval for marketing of a drug candidate in one country does not ensure that we will be able to obtain regulatory approval in any other country. In addition, delays in approvals or rejections of marketing applications in the United States or other countries may be based upon many factors, including regulatory requests for additional analyses, reports, data, preclinical studies and clinical trials, regulatory questions regarding different interpretations of data and results, changes in regulatory policy during the period of drug development and the emergence of new information regarding our drug candidates or other drug candidates. Also, regulatory approval for any of our drug candidates may be withdrawn.

Clinical failure can occur at any stage of clinical development and we have never submitted an NDA or comparable foreign application before.

The FDA or other foreign regulatory authorities may limit our ability to proceed with potential clinical programs, which could have a materially adverse impact on us. The submission of a successful NDA or comparable foreign applications is a complicated process. As an organization, we have never conducted a registrational clinical trial and have limited experience in preparing, submitting and prosecuting regulatory filings, and have not submitted an NDA or comparable foreign applications. Failure to commence or complete, or delays in, our planned clinical trials would prevent us from or delay us in seeking approval for, and if approved, commercializing our drug candidates, and failure to successfully complete any of these activities in a timely manner for any

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of our drug candidates could have a material adverse impact on our business and financial performance. The commencement, enrollment and completion of clinical trials can be delayed or suspended for a variety of reasons, including:

•inability to obtain sufficient funds required for a clinical trial;

•inability to reach agreements on acceptable terms with prospective CROs and trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites;

•clinical holds, other regulatory objections to commencing or continuing a clinical trial or the inability to obtain regulatory approval to commence a clinical trial in countries that require such approvals;

•discussions with the FDA or non-U.S. regulators regarding the scope or design of our clinical trials;

•inability to identify and maintain a sufficient number of trial sites, many of which may already be engaged in other clinical trial programs, including some that may be for the same indications targeted by our drug candidates;

•inability to obtain approval from IRBs or positive ethics committee opinions to conduct a clinical trial at their respective sites;

•severe or unexpected drug-related adverse effects experienced by patients, which have resulted and may result in a full or partial clinical hold by the FDA or non-U.S. regulators;

•inability to timely manufacture sufficient quantities of the drug candidate or devices required for a clinical trial;

•difficulty recruiting and enrolling patients to participate in clinical trials for a variety of reasons, including ability to find patients with a rare disease, meeting the enrollment criteria for our study and competition from other clinical trial programs for the same indications as our drug candidates;

•inability to retain enrolled patients after a clinical trial is underway; and

•enrollment may be delayed or interrupted or patients may drop out of clinical trials due to or the fear of natural disasters, such as earthquakes, tsunamis, power shortages or outages, floods, or monsoons, public health crises, such as pandemics and epidemics, political crisis, such as terrorism, war, political instability or other conflict, cyberattacks, or other events outside of our control occurring at or around our clinical trials sites in the United States or Europe.

In addition, the design of a clinical trial can determine whether its results will support approval of a drug and flaws in the design of a clinical trial may not become apparent until the clinical trial is well-advanced. Changes in regulatory requirements and guidance may also occur and we may need to amend clinical trial protocols to reflect these changes with appropriate regulatory authorities. Amendments may require us to resubmit clinical trial protocols to IRBs or ethics committees for re-examination, which may impact the costs, timing or successful completion of a clinical trial.

In addition, if we are required to conduct additional clinical trials or other preclinical studies of our drug candidates beyond those contemplated, our ability to obtain regulatory approval of these drug candidates and generate revenue from their sales would be similarly harmed.

Clinical trials of our drug candidates have in the past been put on clinical holds by, and failed to demonstrate safety and efficacy to the satisfaction of, the FDA, and if any future clinical trials of our drug candidates are put on clinical holds by, or fail to demonstrate safety and efficacy to the satisfaction of, the FDA, the EMA, or similar regulatory authorities outside the United States, or do not otherwise produce positive results, we may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our drug candidates.

Before obtaining regulatory approvals for the commercial sale of any of our drug candidates, we must demonstrate through lengthy, complex and expensive preclinical studies and clinical trials that our drug candidates are both safe and effective for use in each target indication. Each drug candidate must demonstrate an adequate risk versus benefit profile in its intended patient population and for its intended use.

Clinical testing is expensive and can take many years to complete, and its outcome is inherently uncertain. Failure can occur at any time during the clinical trial process. Clinical trials of our drug candidates have in the past been put on clinical holds imposed by, and failed to demonstrate safety and efficacy to the satisfaction of, the FDA, the EMA, or similar regulatory authorities outside of the United States. For example, on January 25, 2022, the FDA placed a full clinical hold on the IND for atuzaginstat (COR388), one of our assets that has since been out-licensed. On March 8, 2023, the FDA placed a partial clinical hold on the IND for EryDex related to extractables and leachables of new components used in the EryKit. The FDA subsequently lifted the partial clinical hold on September 23, 2023. The FDA may place additional clinical holds on our current or currently contemplated clinical programs or

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otherwise limit our ability to proceed with other clinical programs in our pipeline. Additionally, the results of preclinical studies of our drug candidates may not be predictive of the results of early-stage or later-stage clinical trials, and results of early clinical trials of our drug candidates may not be predictive of the results of later-stage clinical trials. For example, the Phase 3 ATTeST study conducted by EryDel failed to meet its primary endpoint. The results of clinical trials in one set of patients or disease indications may not be predictive of those obtained in another. In some instances, there can be significant variability in safety or efficacy results between different clinical trials of the same drug candidate due to numerous factors, including changes in trial procedures set forth in protocols, differences in the size and type of the patient populations, changes in and adherence to the dosing regimen and other clinical trial protocols and the rate of dropout among clinical trial participants. Drug candidates in later stages of clinical trials may fail to show the desired safety and efficacy profile despite having progressed through preclinical studies and initial clinical trials. A number of companies in the pharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy or unacceptable safety issues, notwithstanding promising results in earlier trials. This is particularly true in degenerative diseases, where failure rates historically have been higher than in many other disease areas. Most drug candidates that begin clinical trials are never approved by regulatory authorities for commercialization.

In addition, even if such clinical trials are successfully completed, we cannot guarantee that the FDA, the EMA, or other foreign regulatory authorities will interpret the results as we do, and more trials could be required before we submit our drug candidates for approval. Moreover, principal investigators for our clinical trials may serve as scientific advisors or consultants to us from time to time and receive compensation in connection with such services. Under certain circumstances, we may be required to report some of these relationships to the FDA, the EMA, or other regulatory authorities. The FDA, the EMA, or other regulatory authorities may conclude that a financial relationship between us and a principal investigator has created a conflict of interest or otherwise affected the integrity of the study. The FDA, the EMA, or other regulatory authorities may therefore question the integrity of the data generated at the applicable clinical trial site and the utility of the clinical trial itself may be jeopardized. This could result in a delay in approval, or rejection, of our marketing applications by the FDA, the EMA, or other regulatory authorities, as the case may be, and may ultimately lead to the denial of marketing approval of any of our drug candidates. To the extent that the results of the trials are not satisfactory to the FDA, the EMA, or foreign regulatory authorities for support of a marketing application, we may be required to expend significant resources, which may not be available to us, to conduct additional trials in support of potential approval of our drug candidates. Even if regulatory approval is secured for any of our drug candidates, the terms of such approval may limit the scope and use of our drug candidate, which may also limit its commercial potential.

We currently rely and expect to continue to rely on third parties to conduct some of our preclinical studies and clinical trials and some aspects of our research and preclinical testing and on third-party contract manufacturing organizations to manufacture and supply our preclinical, clinical and commercial materials, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials, research, manufacturing or testing.

We rely and expect to continue to rely on third parties, such as CROs, clinical data management organizations, medical institutions, and clinical investigators, to conduct some aspects of our research and preclinical testing and our clinical trials. We also currently rely on and expect to continue to rely on, third-party CMOs to manufacture and supply our preclinical, clinical and commercial materials. Any of these third parties may terminate their engagements with us or be unable to fulfill their contractual obligations. If we need to enter into alternative arrangements, it would delay our future drug development activities.

Our reliance on these third parties for research and development activities reduces our control over these activities but does not relieve us of our responsibilities. For example, we remain responsible for ensuring that each of our clinical trials is conducted in accordance with the general investigational plan and protocols for the trial. Moreover, the FDA requires us to comply with current GCP regulations for conducting, recording, and reporting the results of clinical trials to assure that data and reported results are credible, reproducible and accurate and that the rights, integrity, and confidentiality of trial participants are protected. We also are required to register any future clinical trials and post the results of completed clinical trials on a government-sponsored database within certain timeframes. Failure to do so can result in fines, adverse publicity, and civil and criminal sanctions. Similar requirements and consequences may apply in countries outside the United States.

Reliance on third-party manufacturers entails additional risks, such as the possible breach of the manufacturing agreement by the third party, the possible termination or nonrenewal of the agreement by the third party at a time that is costly or inconvenient for us and reliance on the third party for regulatory compliance, quality assurance, safety and related reporting. Third-party manufacturers may not be able to comply with cGMP regulations or similar regulatory requirements outside the United States.

If these third parties do not successfully carry out their contractual duties, meet expected deadlines, or conduct our clinical trials in accordance with regulatory requirements or our stated protocols, we will not be able to obtain, or may be delayed in obtaining, marketing approvals for any drug candidates we may develop and will not be able to, or may be delayed in our efforts to, successfully commercialize our drug candidates.

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We also expect to rely on other third parties to store and distribute drug supplies for our future clinical trials. Any performance failure on the part of our distributors could delay clinical development or marketing approval of any drug candidates we may develop or commercialization of our medicinal products, producing additional losses and depriving us of drug revenue.

Risks Related to the Production and Manufacturing of our Drug Candidates and Future Products

Our production capacity could prove insufficient for our needs.

Our production capacity may prove insufficient in the future to meet the growth of our business, including producing sufficient quantities of drug candidates for clinical trials and, ultimately, our customers and distributors. There is no guarantee that we will or have properly estimated our required manufacturing capacities or that the third parties we rely on to provide required machinery and materials for the manufacturing process will be able to perform on our proposed timelines or meet our manufacturing demands, if at all. Also, if we must increase production capacity for any reason, we may need to make considerable investments that could lead to significant financing needs or require us to enter into subcontracting agreements in order to outsource part of the production.

We may not have access to the raw materials and other components, necessary for the manufacturing of our drug candidates.

We are dependent on third parties for the supply of various materials that are necessary to produce our drug candidates for clinical trials.

If our agreements with one or more of these suppliers were to be terminated or if one or more of these suppliers are unable to meet our demands, we could experience delays in our research or planned clinical trials or commercialization. We could be unable to find alternative suppliers of acceptable quality, in the appropriate volumes and at an acceptable cost.

In addition, these materials are subject to stringent manufacturing processes and rigorous testing. Delays in the completion and validation of facilities and manufacturing processes of these materials could adversely affect our ability to complete trials and commercialize our products in a cost-effective and timely manner. If we encounter difficulties in the supply of these materials, chemicals or biological products, or if we were not able to maintain our supply agreements, or establish new supply agreements in the future, our product development and our business prospects could be significantly compromised.

Our manufacturing facilities are subject to significant government regulations and approvals. If we or our third-party manufacturers fail to comply with these regulations or maintain these approvals, our business will be materially harmed.

We currently partially manufacture our Red Cell Loader machines and EryKit in our facility in Medolla, Italy. We and our third-party manufacturers are subject to ongoing regulation and periodic inspection by the FDA competent authorities of EU Member States and other regulatory bodies to ensure compliance with cGMP, as part of our clinical trials. Any failure to follow and document our or their adherence to such cGMP regulations or other regulatory requirements may lead to significant delays in the availability of products for commercial sale or clinical trials, may result in the termination of or a hold on a clinical trial, or may delay or prevent filing or approval of marketing applications for our products.

Failure to comply with applicable regulations could also result in the European Commission, FDA, the national authorities in the individual EU Member States, or other applicable regulatory authorities taking various actions, including:

•levying fines and other civil penalties;

•imposing consent decrees or injunctions;

•requiring us to suspend or put on hold one or more of our clinical trials;

•suspending, varying or withdrawing regulatory approvals;

•delaying or refusing to approve pending applications or supplements to approved applications;

•requiring us to suspend manufacturing activities or product sales, imports or exports;

•requiring us to communicate with physicians and other customers about concerns related to actual or potential safety, efficacy, and other issues involving our products;

•mandating product recalls or seizing products;

•imposing operating restrictions; and

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•seeking criminal prosecutions.

Any of the foregoing actions could be detrimental to our reputation, business, financial condition or operating results. Furthermore, our key suppliers may not continue to be in compliance with all applicable regulatory requirements, which could result in our failure to produce our products on a timely basis and in the required quantities, if at all. In addition, before any additional products would be considered for marketing approval in the United States, the EU or elsewhere, our suppliers will have to pass an audit by the applicable regulatory authorities. We are dependent on our suppliers’ cooperation and ability to pass such audits, and the audits and any audit remediation may be costly. Failure to pass such audits by us or any of our suppliers would affect our ability to commercialize our drug candidates in the United States, the EU or elsewhere.

Our production costs may be higher than we currently estimate.

We manufacture our drug candidates according to manufacturing best practices applicable to drugs for clinical trials and to specifications approved by the applicable regulatory authorities. If any of our drug candidates are found to be non-compliant, we would be required to manufacture the drug candidates again, which would entail additional costs and may prevent delivery of the drug candidates to patients on time.

Other risks inherent in the production process may have the same effect, such as:

•contamination of the controlled atmosphere area;

•unusable premises and equipment;

•new regulatory requirements requiring a partial and/or extended stop to the production unit to meet the requirements;

•unavailable qualified personnel;

•power failure of extended duration;

•logistical error; and

•rupture in the cold chain, which is a system for storing and transporting blood and blood products within the correct temperature range and conditions.

In addition, a rise in direct or indirect energy rates may increase product manufacturing and logistical costs. Any of these risks, should they occur, could disrupt our activities and compromise our financial position, results, reputation or growth.

The manufacture of our products requires strict adherence to regulatory requirements governing medical devices and if we or our suppliers encounter problems our business could suffer.

The manufacture of our products must comply with strict regulatory requirements governing Class II medical devices in the U.S. and other regulatory requirements in foreign locations. Problems may arise during manufacturing, quality control, storage, or distribution of our products for a variety of reasons, including equipment malfunction, failure to follow specific protocols and procedures, manufacturing quality concerns, or problems with raw materials, electromechanical, software and other components, supplier issues, and natural disasters. If problems arise during production, the affected products may have to be discarded. In the EU, our RCL and EryKit medical devices, Syringe Kit, and process solutions, are subject to periodic inspections by our Notified Body to maintain CE Certificates of Conformity permitting us to affix the CE mark to our medical devices. We may also be subject to unannounced audits by national competent authorities to ensure compliance with applicable regulatory requirements.

As a result of the transitional provisions in the MDR, some CE Certificates of Conformity issued by Notified Bodies in accordance with the MDD from May 2017, and which remained valid on May 26, 2021 will remain valid until December 31, 2027 for Class III and Class IIb implantable medical devices and until December 31, 2028 for other Class IIb, Class IIa and Class I devices with a measuring function or which are sterile. Class I medical devices, for which the conformity assessment procedure in accordance with the MDD did not require the involvement of a Notified Body but will require the involvement of a Notified Body in accordance with the MDR and for which an EU Declaration of Conformity was issued in accordance with the MDD prior to May 26, 2021, can continue to be placed on the EEA market until December 31, 2028. Manufacturers of medical devices may only benefit from the above extended transitional provisions deadlines if the following conditions are fulfilled: (i) the devices continue to comply with the requirements of the MDD, (ii) there are no significant changes in the design and intended purpose, (iii) the devices do not present an unacceptable risk to the health or safety of patients, users or other persons, or to other aspects of the protection of public health, (iv) the manufacturer implements a quality management system by May 26, 2024 which complies with the requirements of the MDR, (v) by May 26, 2024 an application is lodged with a Notified Body for conduct of the conformity assessment of the devices covered by

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the CE Certificate of Conformity, or the devices intended to substitute for such devices, in accordance with the MDR and a related written agreement is signed with the Notified Body by September 26, 2024, and (vi) from May 26, 2021, compliance with the MDR relating to post-market surveillance, market surveillance, vigilance, registration of economic operators and of devices is ensured in place of the corresponding requirements in the MDD.

In addition, these CE Certificates of Conformity will remain valid in accordance with the extended transitional deadlines above only if either (i) the manufacturer signed a written agreement with a Notified Body for the conformity assessment of the device covered by the expired CE Certificate of Conformity, or the device intended to substitute that device, in accordance with the MDR before the date of expiry of the CE Certificate of Conformity, or (ii) a competent authority of an EU Member State has granted a derogation from the application conformity assessment procedure in accordance with Article 59(1) or Article 97(1) of the MDR.

Any failure to comply with any of these obligations may impact our activities in the EEA, the renewal of our existing CE Certificates of Conformity and future conformity assessment activities.

Manufacturing problems or delays could also lead to increased costs, lost sales, damage to customer relations, failure to supply penalties, time and expense spent investigating the cause and depending on the cause, similar losses with respect to other batches of products. If problems are not discovered before the product is released to the market, voluntary recalls, corrective actions, or product liability related costs may also be incurred. If unanticipated problems with our products arise, or if we or our suppliers fail to comply with regulatory requirements following CE marking, we may also become subject to enforcement actions such as restrictions on manufacturing processes, warning letters, suspension, variation or withdrawal of CE Certificates of Conformity, civil or criminal penalties. Should we encounter difficulties in the manufacture of our products or be subject to a product recall, our business could suffer materially.

If we or any of our third-party manufacturers or suppliers encounter difficulties in production of our future drug candidates, or fail to meet rigorously enforced regulatory standards, our ability to provide supply of our future drug candidates for clinical trials or for patients, if approved, could be delayed or stopped, or we may be unable to maintain a commercially viable cost structure.

The processes involved in manufacturing our drug candidates are highly regulated and subject to multiple risks. As drug candidates are developed through preclinical studies to late-stage clinical trials towards approval and commercialization, it is common that various aspects of the development program, such as manufacturing methods, are altered along the way in an effort to optimize processes and results. Such changes carry the risk that they will not achieve these intended objectives, and any of these changes could cause our drug candidates to perform differently and affect the results of planned clinical trials or other future clinical trials.

In order to conduct clinical trials of our drug candidates, or supply future commercial drug candidates or devices, if approved, we will need to manufacture them in small and large quantities. Our manufacturing partners may be unable to successfully modify or scale-up the manufacturing capacity for any of our drug candidates or devices in a timely or cost-effective manner, or at all. In addition, quality issues may arise during scale-up activities. If our manufacturing partners are unable to successfully scale-up the manufacture of our drug candidates or devices in sufficient quality and quantity, the development, testing and clinical trials of that drug candidate may be delayed or become infeasible, and regulatory approval or commercial launch of any resulting drug may be delayed or not obtained, which could significantly harm our business. The supply of any of these materials used in EryKits or RCLs may be limited or any of the supply manufacturers may not meet relevant regulatory requirements, and if we are unable to obtain any of these materials in sufficient amounts, in a timely manner and at reasonable prices, or if we encounter delays or difficulties in our relationships with manufacturers or suppliers, the production of EryKits and RCLs may be delayed. If any of our suppliers is unwilling or unable to meet its supply obligations and we are unable to secure an alternative supply source in a timely manner and on favorable terms, our business, financial condition, and results of operations may be harmed and the market price of our common stock and other securities may decline. The same risks apply to our internal manufacturing facilities.

In addition, the manufacturing process for any drug candidates is subject to FDA and foreign regulatory requirements, and continuous oversight, and we will need to contract with manufacturers who can meet all applicable FDA and foreign regulatory authority requirements, including complying with cGMPs, on an ongoing basis. If we or our third-party manufacturers are unable to reliably produce drug candidates in accordance with the requirements of the FDA or other regulatory authorities, we may not obtain or maintain the approvals we need to commercialize such future drug candidates. Even if we obtain regulatory approval for any of our drug candidates, there is no assurance that either we or our third-party contract manufacturers will be able to manufacture the approved drug in accordance with the requirements of the FDA or other regulatory authorities, to produce it in sufficient quantities to meet the requirements for the potential launch of the drug, or to meet potential future demand. Moreover, we, or our contract manufacturers, any future collaborators and their contract manufacturers could be subject to periodic unannounced inspections by the FDA, competent authorities of EU Member States or other comparable foreign regulatory authorities, to monitor and ensure compliance with cGMP. Despite our efforts to audit and verify regulatory compliance, one or more of our third-party manufacturing vendors may be found on regulatory inspection by the FDA, competent authorities of EU Member States or other comparable foreign regulatory authorities to be

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noncompliant with cGMP regulations. Our failure, or the failure of our third-party manufacturers, to comply with applicable regulations could result in sanctions being imposed on us, including shutdown of the third-party vendor or invalidation of drug product lots or processes, fines, injunctions, civil penalties, delays, suspension, variation or withdrawal of approvals, license revocation, seizures or recalls of drug candidates or drugs, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect supplies of our products, if approved, and significantly harm our business, financial condition, results of operations and prospects. Any of these challenges could delay completion of clinical trials, require bridging clinical trials or the repetition of one or more clinical trials, increase clinical trial costs, delay approval of our drug candidate, impair commercialization efforts, increase our cost of goods, and have an adverse effect on our business, financial condition, results of operations and growth prospects.

If the market opportunities for our drug candidates are smaller than we believe they are, our revenue may be adversely affected, and our business may suffer. Because the target patient populations of our drug candidates are small, we must be able to successfully identify patients and acquire a significant market share to achieve profitability and growth.

We focus our research and product development on treatments for rare and ultra-rare diseases. Given the small number of patients who have the diseases that we are targeting, our profitability and growth depend on successfully identifying patients with these rare and ultra-rare diseases. Our projections of both the number of people who have these diseases, as well as the subset of people with these diseases who have the potential to benefit from treatment with our drug candidates, are based on our beliefs and internal estimates. These estimates have been derived from a variety of sources, including scientific literature, surveys of clinics, patient foundations, and market research, and may prove to be incorrect. Further, new studies may change the estimated incidence or prevalence of these diseases, and, as a result, the number of patients with these diseases may turn out to be lower than expected. Our effort to identify patients with diseases we seek to treat is in early stages, and we cannot accurately predict the number of patients for whom treatment might be possible. Additionally, the potentially addressable patient population for each of our drug candidates may be limited or may not be amenable to treatment with our drug candidates, and new patients may become increasingly difficult to identify or gain access to, which would adversely affect our results of operations and our business. If patients who currently receive assistance from us in paying for the cost of our drugs continue to receive assistance, if approved, or who receive free drugs in the future, will negatively impact our profitability. If EryDex is only approved for patients with A-T who are between six and nine years old, it will be limiting an already small patient population. Finally, even if we obtain significant market share for our drug candidates, because the potential target populations are very small, we may never achieve profitability despite obtaining such significant market share.

If, in the future, we are unable to establish sales and marketing capabilities or enter into agreements with third parties to sell and market any drug candidates we may develop and for which we obtain approval, we may not be successful in commercializing those drug candidates if and when they are approved.

We do not have a sales or marketing infrastructure and have no experience in the sale, marketing, or distribution of pharmaceutical drug candidates, if approved, or devices. To achieve commercial success for any approved drug candidate for which we retain sales and marketing responsibilities, we must either develop a sales and marketing organization or outsource these functions to third parties. In the future, we may choose to build a focused sales, marketing, and commercial support infrastructure to sell, or participate in sales activities with collaborators for, some of our drug candidates if and when they are approved.

There are risks involved with both establishing our own commercial capabilities and entering into arrangements with third parties to perform these services. For example, factors that may inhibit our efforts to commercialize any drug candidates, if and when approved, whether alone or in collaboration with others:

•our inability to recruit and retain adequate numbers of effective sales, marketing, coverage or reimbursement, customer service, medical affairs, and other support personnel;

•the inability of sales personnel to obtain access to physicians or our failure to educate adequate numbers of physicians on the benefits of any future approved drug candidates;

•the inability of reimbursement professionals to negotiate arrangements for formulary access, reimbursement, and other acceptance by payors;

•the inability to price our drug candidates, if approved, at a sufficient price point to ensure an adequate and attractive level of profitability;

•the pricing of our products, particularly as compared to alternative treatments;

•availability of alternative effective treatments for indications our candidates are intended to treat and the relative risks, benefits and costs of those treatments;

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•restricted or closed distribution channels that make it difficult to distribute our drug candidates, if approved, to segments of the patient population;

•the lack of complementary drug candidates, if approved, to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive drug candidate lines; and

•unforeseen costs and expenses associated with creating an independent commercialization organization.

If the commercial launch of a future drug candidate, if approved, for which we recruit a sales force and establish marketing and other commercialization capabilities is delayed or does not occur for any reason, we would have prematurely or unnecessarily incurred these commercialization expenses. This may be costly, and our investment would be lost if we cannot retain or reposition our commercialization personnel.

If we enter into arrangements with third parties to perform sales, marketing, commercial support, and distribution services, our sales revenue or the profitability of sales revenue may be lower than if we were to market and sell any drug candidates, if approved, we may develop ourselves. In addition, we may not be successful in entering into arrangements with third parties to commercialize our drug candidates, if approved, or may be unable to do so on terms that are favorable to us. We may have little control over such third parties, and any of them may fail to devote the necessary resources and attention to sell and market our drug candidates, if approved, effectively. If we do not establish commercialization capabilities successfully, either on our own or in collaboration with third parties, we will not be successful in commercializing our drug candidates if approved in the future.

If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our drug candidates, if approved.

We face an inherent risk of product liability as a result of the clinical testing of our drug candidates and will face an even greater risk when and if we commercialize any drug candidates, if approved. For example, we may be sued if our drug candidates cause or are perceived to cause injury or are found to be otherwise unsuitable during clinical testing, early access program, manufacturing, marketing or sale. Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability or a breach of warranties. Product liability claims may be brought against us by participants enrolled in our clinical trials, patients, health care providers or others using, administering our drug candidates or selling our drug candidates, if approved. Claims could also be asserted under state consumer protection acts. If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit testing and commercialization of our drug candidates. Even successful defense would require significant financial and management resources. Regardless of the merits or eventual outcome, liability claims may result in:

•decreased or interrupted demand for our drug candidates;

•withdrawal of clinical trial participants and inability to continue clinical trials;

•initiation of investigations by regulators;

•costs to defend the related litigation;

•a diversion of management’s time and our resources;

•substantial monetary awards to trial participants or patients;

•drug recalls, withdrawals or labeling, marketing or promotional restrictions;

•termination of clinical trial sites or entire trial programs;

•injury to our reputation and significant negative media attention;

•loss of revenue;

•exhaustion of any available insurance and our capital resources;

•the inability to commercialize any drug candidate, if approved; and

•a decline in our share price.

Our inability to obtain sufficient product liability insurance at an acceptable cost to protect against potential product liability claims could prevent or inhibit the commercialization of drug candidates we develop, alone or with potential collaborators. Our insurance policies may have various exclusions, and we may be subject to a product liability claim for which we have no coverage.

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We may have to pay any amounts awarded by a court or negotiated in a settlement that exceed our coverage limitations or that are not covered by our insurance, and we may not have, or be able to obtain, sufficient capital to pay such amounts. Even if our agreements with any future corporate collaborators entitle us to indemnification against losses, such indemnification may not be available or adequate should any claim arise.

We may be exposed to a variety of international risks that could materially adversely affect our business.

Our business is subject to risks associated with conducting business internationally. Some of our suppliers and clinical trial centers are located outside of the United States. We may enter into agreements with third parties for the development and commercialization of drug candidates in international markets. We also plan to seek regulatory approval of our drug candidates outside of the United States. International business relationships will subject us to additional risks that may materially adversely affect our ability to attain or sustain profitable operations, including:

•differing regulatory requirements for drug approvals internationally;

•rejection or qualification of foreign clinical trial data by the competent authorities of other countries;

•price controls on our drug products;

•complexities and difficulties in obtaining, maintaining, protecting and enforcing our intellectual property;

•potential third-party patent rights in countries outside of the United States;

•different United States and foreign drug import and export rules;

•different reimbursement systems and different competitive drugs indicated to treat the indications for which our drug candidates are being developed;

•the potential for so-called “parallel importing,” which is what occurs when a local seller, faced with relatively high local prices, opts to import goods from another jurisdiction with relatively low prices, rather than buying them locally;

•the potential for so-called “parallel exporting,” which is what occurs when a local seller buys goods meant for the locals and sells the goods for a higher price in another country, potentially causing or aggravating supply problems;

•unexpected changes in tariffs, trade barriers and regulatory requirements;

•economic weakness, including inflation, bank failures, or political instability, particularly in non-U.S. economies and markets, including several countries in Europe;

•compliance with tax, including withholding of payroll taxes, employment, immigration and labor laws for employees living or traveling abroad;

•regulatory and compliance risks that relate to anti-corruption compliance and record-keeping that may fall within the purview of the U.S. Foreign Corrupt Practices Act, its accounting provisions or its anti-bribery provisions or provisions of anti-corruption or anti-bribery laws in other countries;

•taxes in other countries;

•financial risks, such as longer payment cycles, difficulty collecting accounts receivable, the impact of local and regional financial crises on demand and payment for our products and exposure to foreign currency exchange rate fluctuations;

•foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country;

•workforce uncertainty in countries where labor unrest is more common than in the United States;

•production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad;

•business interruptions resulting from geo-political actions, including war and terrorism, public health crises, such as pandemics and epidemics, or natural disasters, including earthquakes, volcanoes, typhoons, floods, hurricanes and fires; and

•compliance with evolving and expansive international data privacy laws, such as the EU GDPR.

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Any of these factors could harm our ongoing international clinical operations and supply chain, as well as any future international expansion and operations and, consequently, our business, financial condition, prospects and results of operations.

For example, the UK has voluntarily departed from the EU, commonly referred to as “Brexit.” We do not know to what extent Brexit will impact the business and regulatory environment in the UK, the EU, or other countries. Changes impacting our ability to conduct business in the UK, or other EU countries, or changes to the regulatory regime in those countries, may impact certain portions of our research and general business operations in the UK and the EU.

The United Kingdom’s withdrawal from the EU may have a negative effect on global economic conditions, financial markets and our business, which could reduce the price of our common shares.

Following Brexit, the UK and the EU signed a EU-UK Trade and Cooperation Agreement, or TCA, which became provisionally applicable on January 1, 2021 and entered into force on May 1, 2021. This agreement provides details on how some aspects of the UK and EU’s relationship will operate going forwards however there are still uncertainties. The TCA primarily focuses on ensuring free trade between the EU and the UK in relation to goods, including medicinal products. Among the changes that have occurred are that Great Britain (England, Scotland and Wales) is treated as a “third country,” a country that is not a member of the EU and whose citizens do not enjoy the EU right to free movement. Northern Ireland continues to follow many aspects of the EU regulatory rules, particularly in relation to trade in goods. As part of the TCA, the EU and the UK recognize GMP inspections carried out by the other party and the acceptance of official GMP documents issued by the other party. The TCA also encourages, although it does not oblige, the parties to consult one another on proposals to introduce significant changes to technical regulations or inspection procedures. Among the areas of absence of mutual recognition are batch testing and batch release. The UK has unilaterally agreed to accept EU batch testing and batch release. However, the EU continues to apply EU laws that require batch testing and batch release to take place in the EU territory. This means that medicinal products that are tested and released in the UK must be retested and re-released when entering the EU market for commercial use.

As it relates to marketing authorizations, Great Britain has a separate regulatory submission process, approval process and a separate national marketing authorization. Northern Ireland continues, however, to be covered by the marketing authorizations granted by the European Commission. For example, the scope of a marketing authorization for a medicinal product granted by the European Commission or by the competent authorities of EU Member States no longer encompasses Great Britain (England, Scotland and Wales). In these circumstances, a separate marketing authorization granted by the UK competent authorities is required to place medicinal products on the market in Great Britain. Northern Ireland continues, however, to be covered by the marketing authorizations granted by the European Commission.

On February 27, 2023, the UK Government and the European Commission reached a political agreement on the so-called “Windsor Framework”. The Framework is intended to revise the Northern Ireland Protocol to address some of the perceived shortcomings in its operation. The agreement was adopted at the Withdrawal Agreement Joint Committee on March 24, 2023. If the changes are adopted in the form proposed, medicinal products to be placed on the market in the UK will be authorized solely in accordance with UK laws. Northern Ireland would be reintegrated back into a UK-only regulatory environment under the authority of the MHRA with respect to all medicinal products. The implementation of the Windsor Framework would occur in stages, with new arrangements relating to the supply of medicinal products into Northern Ireland anticipated to take effect in 2025.

A significant proportion of the regulatory framework in the UK applicable to medicinal products is currently derived from EU Directives and Regulations. The potential for UK legislation to diverge from EU legislation following Brexit could materially impact the regulatory regime with respect to the development, manufacture, import, approval, and commercialization of our drug candidates in the UK or the EU. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies governing clinical trials, our development plans may be impacted.

All of these changes could increase our costs and otherwise adversely affect our business. Any delay in obtaining, or an inability to obtain, any regulatory approvals, as a result of Brexit or otherwise, would prevent us from commercializing our drug candidates in the UK or the EU and restrict our ability to generate revenue and achieve and sustain profitability. In addition, we may be required to pay taxes or duties or be subjected to other hurdles in connection with the importation of our drug candidates into the EU. If any of these outcomes occur, we may be forced to restrict or delay efforts to seek regulatory approval in the UK or the EU for our drug candidates, or incur significant additional expenses to operate our business, which could significantly and materially harm or delay our ability to generate revenues or achieve profitability of our business. Any further changes in international trade, tariff and import/export regulations as a result of Brexit or otherwise may impose unexpected duty costs or other non-tariff barriers on us. These developments, or the perception that any of them could occur, may significantly reduce global trade and, in particular, trade between

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the impacted nations and the UK. It is also possible that Brexit may negatively affect our ability to attract and retain employees, particularly those from the EU.

We may not be able to manage our business effectively if we are unable to attract and retain key personnel and consultants, and the loss of such persons could negatively impact the operations of the company.

We may not be able to attract or retain qualified management, finance, scientific and clinical personnel and consultants due to the intense competition for qualified personnel and consultants among biotechnology, pharmaceutical and other businesses or any other circumstances that would cause them no longer to provide their professional services to us in the near future. If we are not able to attract and retain necessary personnel and consultants to accomplish our business objectives, we may experience constraints that will significantly impede the achievement of our development objectives, our ability to raise additional capital and our ability to implement our business strategy. In addition, we may need to adjust the size of our workforce as a result of changes to our expectations for our business, which can result in diversion of management attention, disruptions to our business, and related expenses.

In addition, we previously announced a reduction in force, impacting a number of employees. Any further reduction in force may yield unintended consequences and costs, such as the loss of institutional knowledge and expertise, attrition beyond the intended reduction in force, the distraction of employees, reduced employee morale and could adversely affect our reputation as an employer, which could make it more difficult for us to hire new employees in the future and increase the risk that we may not achieve the anticipated benefits from the cost reduction program.

Our industry has experienced a high rate of turnover of management personnel in recent years. Potential changes in management could be disruptive to our business and may also result in our loss of unique skills and loss of knowledge about our business. Such turnover may also result in the departure of other existing employees or partners.

Replacing executive officers, key employees and consultants may be difficult and may take an extended period because of the limited number of individuals in our industry with the breadth of skills and experience required to develop, gain regulatory approval of and commercialize drug candidates successfully. Competition to hire and retain employees and consultants from this limited pool is intense, and we may be unable to hire, train, retain or motivate these additional key personnel and consultants. Our failure to retain or replace key personnel or consultants could materially harm our business. Additionally, the members of our management team have limited experience managing a public company, interacting with public company investors, and complying with the increasingly complex laws, rules and regulations that specifically govern public companies, which could cause our management to have to expend time and resources helping them become familiar with such requirements. We may lose our ability to implement our business strategy successfully and could be seriously harmed. Any of our executive officers or key employees or consultants may terminate their employment at any time.

We have scientific and clinical advisors and consultants who assist us in formulating our research, development and clinical strategies. These advisors are not our employees and may have commitments to, or consulting or advisory contracts with, other entities that may limit their availability to us. Non-compete agreements are not permissible or are limited by law in certain jurisdictions and, even where they are permitted, these individuals typically will not enter into non-compete agreements with us. If a conflict of interest arises between their work for us and their work for another entity, we may lose their services. In addition, our advisors may have arrangements with other companies to assist those companies in developing drug candidates or technologies that may compete with ours.

Our employees, independent contractors, consultants, commercial partners and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements and insider trading, which could significantly harm our business.

We are exposed to the risk of fraud or other misconduct by our employees, independent contractors, consultants, commercial partners and vendors. Misconduct by these parties could include intentional failures to comply with the regulations of the FDA and non-U.S. regulators, provide accurate information to the FDA and non-U.S. regulators, comply with health care fraud and abuse laws and regulations in the United States and abroad, report financial information or data accurately or disclose unauthorized activities to us. In particular, sales, marketing and business arrangements in the health care industry are subject to extensive laws and regulations intended to prevent fraud, misconduct, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements. Employee misconduct could also involve the improper use of information obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to our reputation. It is not always possible to identify and deter employee misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to

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comply with these laws or regulations. If any such actions are instituted against us, those actions could have a significant impact on our business, including the imposition of significant fines or other sanctions.

Our insurance policies are expensive and only protect us from some business risks, which will leave us exposed to significant uninsured liabilities.

We do not carry insurance for all categories of risk that our business may encounter. Some of the policies we currently maintain include general liability, products liability and directors’ and officers’ insurance. We do not know, however, if we will be able to maintain insurance with adequate levels of coverage. Any significant uninsured liability may require us to pay substantial amounts, which would adversely affect our financial position and results of operations.

Failure (or perceived failure) to comply with health and data protection laws and regulations could lead to government enforcement actions, which could include civil or criminal penalties, private litigation, and/or adverse publicity and could negatively affect our operating results and business.

In the ordinary course of business, we collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect, secure, dispose of, transmit, and share (collectively, “process”) personal data and other sensitive information, including proprietary and confidential business data, trade secrets, intellectual property, sensitive third-party data, business plans, transactions, financial information and (collectively, “sensitive data”). As a result, we and our collaborators are or may become subject to various federal, state, and foreign data protection laws and regulations (i.e., laws and regulations that address privacy and data security).

In the United States, numerous federal and state laws and regulations including federal health information privacy laws, state comprehensive consumer privacy laws, state data breach notification laws, state health information privacy laws, and federal and state consumer protection laws that govern the collection, use, disclosure, and protection of health-related and other personal information apply or could apply to our operations or the operations of our collaborators. Similar laws are being considered in various other states, as well as at the federal and local levels, and we expect more states to pass similar laws in the future. These developments may further complicate compliance efforts and increase legal risk and compliance costs for us and the collaborators upon whom we rely. In addition, we may obtain health information from third parties (including research institutions from which we obtain clinical trial data) that are subject to privacy and security requirements under the federal HIPAA as amended by the HITECH. Depending on the facts and circumstances, we could be subject to civil, criminal, and administrative penalties if we violate (or are perceived to violate) HIPAA.

Many foreign jurisdictions, including the EU, its member states, the United Kingdom and Australia, among others, have also adopted legislation and regulations that increase or change the requirements governing the collection, use, disclosure and transfer of the personal information of individuals in these jurisdictions. These laws, and similar laws being considered in other countries, and regulations are complex and change frequently, at times due to changes in political climate, and existing laws and regulations are subject to different and conflicting interpretations, which adds to the complexity of processing personal data from these jurisdictions. These laws have the potential to increase costs of compliance, risks of noncompliance and penalties for noncompliance.

For example, the EU’s GDPR imposes numerous requirements for the collection, use and disclosure of personal information, including more stringent requirements relating to consent and the information that must be shared with data subjects about how their personal information is used, the obligation to notify regulatory authorities and affected individuals of personal data breaches, extensive internal privacy governance obligations, and obligations to honor expanded rights of individuals in relation to their personal information (for example, the right to access, correct and delete their data). In addition, the GDPR generally maintains restrictions on cross-border data transfer, and as a result we may be unable to transfer personal data from Europe and other jurisdictions to the United States or other countries. The GDPR may increase our responsibility and liability in relation to personal data that we process, and may also increase our costs of compliance.

Compliance with U.S. and international data protection laws and regulations could require us to take on more onerous obligations in our contracts, restrict our ability to collect, use and disclose data, or in some cases, impact our ability to operate in certain jurisdictions. Failure (or perceived failure) to comply with these laws and regulations could result in government enforcement actions (which could include civil, criminal and administrative penalties), private litigation, and/or adverse publicity and could negatively affect our operating results and business. Actual or perceived failure to comply with privacy laws may also cause clinical trial subjects, employees and other individuals about whom we or our potential collaborators obtain personal information, as well as the providers who share this information with us, to limit our ability to collect, use and disclose personal information. Claims that we have violated individuals’ privacy rights, failed to comply with data protection laws, or breached our contractual obligations, even if we are not found liable, could be expensive and time-consuming to defend and could result in adverse publicity that could harm our business.

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Changes in healthcare law and implementing regulations, as well as changes in healthcare policy, may impact our business in ways that we cannot currently predict, and may have a significant adverse effect on our business and results of operations.

In the United States 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 drug candidates, restrict or regulate post-approval activities, and affect our ability to profitably sell any drug candidates for which we obtain marketing approval. Among policy makers and payors in the United States and elsewhere, including in the EU, 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 United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives.

The PPACA substantially changed the way healthcare is financed by both the government and private insurers, and significantly impacts the U.S. pharmaceutical industry.

Since its enactment, there have been executive, judicial and Congressional challenges to certain aspects of the PPACA. It is possible that the PPACA will be subject to judicial or Congressional challenges in the future. It is unclear how any such challenges and the healthcare reform measures will impact the PPACA and our business. Other healthcare reform measures that may be adopted in the future could have a material adverse effect on our industry generally and on our ability to maintain or increase sales of our existing products that we successfully commercialize or to successfully commercialize our drug candidates, if approved. In addition to the PPACA, there will continue to be proposals by legislators at both the federal and state levels, regulators and third-party payors to keep healthcare costs down while expanding individual healthcare benefits. For example, on August 16, 2022, President Biden signed the IRA into law, which among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in PPACA marketplaces through plan year 2025. The IRA also eliminates the “donut hole” under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and through a newly established manufacturer discount program. It is unclear how these or similar policy initiatives will impact the PPACA and our business.

Other legislative changes have been proposed and adopted since the PPACA was enacted. These changes include aggregate reductions to Medicare payments to providers of up to 2% per fiscal year pursuant to the Budget Control Act of 2011 and subsequent laws, which began in 2013 and, due to subsequent legislative amendments to the statute, will remain in effect until 2032, unless additional Congressional action is taken. New laws may result in additional reductions in Medicare and other healthcare funding, which may adversely affect customer demand and affordability for our drug candidates and, accordingly, the results of our financial operations.

Also, there has been heightened governmental scrutiny recently over the manner in which drug manufacturers set prices for their marketed drug candidates, which has resulted in several Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drugs. For example, in July 2021, the Biden administration released an executive order, “Promoting Competition in the American Economy,” with multiple provisions aimed at prescription drugs. In response to Biden’s executive order, on September 9, 2021, the Department of Health and Human Services (HHS) released a Comprehensive Plan for Addressing High Drug Prices that outlines principles for drug pricing reform and sets out a variety of potential legislative policies that Congress could pursue as well as potential administrative actions HHS can take to advance these principles. Further, the IRA will, among other things (i) allow HHS to negotiate the price of certain high-expenditure, single-source drugs and biologics covered under Medicare, and subject drug manufacturers to civil monetary penalties and a potential excise tax by offering a price that is not equal to or less than the “negotiated fair price” under the law and (ii) impose rebates with respect to certain drugs and biologics covered under Medicare Part B or Medicare Part D to penalize price increases that outpace inflation. The IRA permits HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years. HHS has and will continue to issue and update guidance as these programs are implemented. It is currently unclear how the IRA will be effectuated but is likely to have a significant impact on the pharmaceutical industry. Further, in response to the Biden administration’s October 2022 executive order, on February 14, 2023, HHS released a report outlining three new models for testing by the CMS Innovation Center which will be evaluated on their ability to lower the cost of drugs, promote accessibility, and improve quality of care. It is unclear whether the models will be utilized in any health reform measures in the future. At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical 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.

We expect that these and other healthcare reform measures that may be adopted in the future may result in more rigorous coverage criteria and lower reimbursement, and in additional downward pressure on the price that we receive for any approved drug candidate. Any reduction in reimbursement from Medicare or other government-funded programs may result in a similar reduction in

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payments from private payors. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability or commercialize our drug candidates, once marketing approval is obtained.

Our ability to successfully commercialize any drugs that we develop depends in part on the extent to which coverage and adequate reimbursement are available from government health administration authorities, private health insurers, and other organizations.

Our ability to successfully commercialize any drugs that we develop depends in part on the extent to which coverage and adequate reimbursement are available from government health administration authorities, private health insurers, and other organizations. Government authorities and third-party payors, such as private health insurers and health maintenance organizations, each individually decide which medications they will pay for and establish reimbursement levels. A primary trend in the U.S. healthcare industry and elsewhere is cost containment. Government authorities and third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications. Government authorities currently impose mandatory discounts for certain patient groups, such as Medicare, Medicaid and VA hospitals, and may seek to increase such discounts at any time. Future regulation may negatively impact the price of our drug candidates, if approved. Increasingly, third-party payors are requiring that drug companies provide them with predetermined discounts from list prices and are challenging the prices charged for medical products. We cannot be sure that coverage or reimbursement will be available for any drug candidate that we commercialize and, if coverage or reimbursement is available, the level of reimbursement. Reimbursement may impact the demand for, or the price of, any drug candidate for which we obtain marketing approval. In order to get coverage and reimbursement, physicians may need to show that patients have superior treatment outcomes with our products compared to standard of care drugs, including lower-priced generic versions of standard of care drugs. It is possible that a third-party payor may consider our drug candidates, once approved, and other therapies as substitutable and only offer to reimburse patients for the less expensive product. Even if we show improved efficacy or improved convenience of administration with our drug candidates, once approved, compared to existing products, pricing of existing products may limit the amount we will be able to charge for our drug candidates. Third-party payors may deny or revoke the reimbursement status of a given drug product or establish prices for new or existing marketed products at levels that are too low to enable us to realize an appropriate return on our investment in product development. Because EryDex is still in development, we are unable at this time to determine the likely level or method of coverage and reimbursement from third-party payors. If reimbursement is not available or is available only to limited levels, we may not be able to successfully commercialize any drug candidate for which we obtain marketing approval. In the United States, no uniform policy of coverage and reimbursement for products exists among third-party payors, and coverage decisions and reimbursement levels for products can differ significantly from payor to payor. As a result, the coverage determination process is often a time consuming and costly process that may require us to provide scientific and clinical support for the use of our products to each payor separately, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained.

There may be significant delays in obtaining coverage and reimbursement for newly approved drugs, and coverage may be more limited than the purposes for which the medicine is approved by the FDA or other comparable foreign regulatory authorities. Moreover, eligibility for reimbursement does not imply that any drug will be paid for in all cases or at a rate that covers our costs, including research, development, manufacture, sale, and distribution. Interim reimbursement levels for new drugs, if applicable, may also not be sufficient to cover our costs and may not be made permanent. Reimbursement rates may vary according to the use of the drug and the clinical setting in which it is used, may be based on reimbursement levels already set for lower cost drugs and may be incorporated into existing payments for other services. Net 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 United States. Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own reimbursement policies, but make their determinations independently and may impose additional restrictions. Our inability to promptly obtain and maintain coverage and profitable payment rates from both government-funded and private payors for any approved products we may develop could have a material adverse effect on our operating results, our ability to raise capital needed to commercialize drug candidates, and our overall financial condition. Further, coverage policies and third-party payor reimbursement rates may change at any time. Therefore, even if favorable coverage and reimbursement status is attained, less favorable coverage policies and reimbursement rates may be implemented in the future.

In the EU, coverage and reimbursement status of any drug candidates for which we obtain regulatory approval are provided for by the national laws of EU member states. The requirements may differ across the EU member states. The EU provides options for EU Member States to restrict the range of medicinal products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use. An EU Member State may approve a specific price for the medicinal product, it may refuse to reimburse a product at the price set by the manufacturer or it may instead adopt a system of direct or indirect controls on the profitability of the company placing the medicinal product on the market. Many EU Member States also periodically review their reimbursement procedures for medicinal products, which could have an adverse impact on reimbursement status.

Moreover, in order to obtain reimbursement for our products in some European countries, including some EU Member States, we may be required to compile additional data comparing the cost-effectiveness of our products to other available therapies.

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This HTA of medicinal products is becoming an increasingly common part of the pricing and reimbursement procedures in some EU Member States, including those representing the larger markets. The HTA process is the procedure to assess therapeutic, economic and societal impact of a given medicinal product in the national healthcare systems of the individual country. The outcome of an HTA will often influence the pricing and reimbursement status granted to these medicinal products by the competent authorities of individual EU Member States. The extent to which pricing and reimbursement decisions are influenced by the HTA of the specific medicinal product currently varies between EU Member States. In December 2021, Regulation No 2021/2282 on HTA amending Directive 2011/24/EU, was adopted in the EU. This Regulation, which entered into force in January 2022 and will apply as of January 2025, is intended to boost cooperation among EU Member States in assessing health technologies, including new medicinal products, and providing the basis for cooperation at EU level for joint clinical assessments in these areas. The Regulation foresees a three-year transitional period and will permit EU Member States to use common HTA tools, methodologies, and procedures across the EU, working together in four main areas, including joint clinical assessment of the innovative health technologies with the most potential impact for patients, joint scientific consultations whereby developers can seek advice from HTA authorities, identification of emerging health technologies to identify promising technologies early, and continuing voluntary cooperation in other areas. Individual EU Member States will continue to be responsible for assessing non-clinical (e.g., economic, social, ethical) aspects of health technologies, and making decisions on pricing and reimbursement. If we are unable to maintain favorable pricing and reimbursement status in EU Member States for drug candidates that we may successfully develop and for which we may obtain regulatory approval, any anticipated revenue from and growth prospects for those products in the EU could be negatively affected. In light of the fact that the United Kingdom has left the EU, Regulation No 2021/2282 on HTA will not apply in the United Kingdom. However, the UK MHRA is working with UK HTA bodies and other national organizations, such as the Scottish Medicines Consortium, the National Institute for Health and Care Excellence, and the All-Wales Medicines Strategy Group, to introduce new pathways supporting innovative approaches to the safe, timely and efficient development of medicinal products.

Interim, top-line and preliminary data from our future clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.

From time to time, we may publicly disclose preliminary or top-line data from our future clinical studies, which are based on a preliminary analysis of then-available data, and the results and related findings and conclusions are subject to change following a more comprehensive review of the data related to the particular study or trial. We also make assumptions, estimations, calculations and conclusions as part of our analyses of data, and we may not have received or had the opportunity to fully and carefully evaluate all data. As a result, the top-line results that we report may differ from future results of the same studies, or different conclusions or considerations may qualify such results, once additional data have been received and fully evaluated. Top-line data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously published. As a result, top-line data should be viewed with caution until the final data are available. From time to time, we may also disclose interim data from our clinical studies.

In addition, we may report interim analyses of only certain endpoints rather than all endpoints. Interim data from future clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available. Adverse differences between preliminary or interim data and final data could significantly harm our business prospects. Further, disclosure of interim data by us or by our competitors could result in volatility in the price of our common stock. Further, others, including regulatory agencies, may not accept or agree with our assumptions, estimates, calculations, conclusions or analyses or may interpret or weigh the importance of data differently, which could impact the value of the particular program, the approvability or commercialization of the particular drug candidate or product and our company in general. In addition, the information we choose to publicly disclose regarding a particular study or clinical trial is based on what is typically extensive information, and you or others may not agree with what we determine is the material or otherwise appropriate information to include in our disclosure, and any information we determine not to disclose may ultimately be deemed significant with respect to future decisions, conclusions, views, activities or otherwise regarding a particular drug, drug candidate or our business. If the top-line data that we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for, and commercialize, our drug candidates may be harmed, which could harm our business, operating results, prospects or financial condition.

Even if we obtain regulatory approval for a drug candidate, it will remain subject to extensive ongoing regulatory review and requirements.

If any of our future drug candidates are approved, they will be subject to ongoing regulatory requirements for manufacturing, labeling, packaging, storage, advertising, promotion, sampling, record-keeping, conduct of post-marketing studies, and submission of safety, efficacy, and other post-market information, including both federal and state requirements in the United States and requirements of comparable foreign regulatory authorities.

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Manufacturers and manufacturers’ facilities are required to comply with extensive requirements imposed by the FDA and comparable foreign regulatory authorities, including ensuring that quality control and manufacturing procedures conform to cGMPs regulations. As such, we and our contract manufacturers will be subject to continual review and inspections to assess compliance with cGMP and adherence to commitments made in any NDA. Accordingly, we and others with whom we work must continue to expend time, money, and effort in all areas of regulatory compliance, including manufacturing, production and quality control. We also are required to register our establishments and list our products with the FDA and certain state agencies. We and any third­ party manufacturers or suppliers must continually adhere to federal regulations setting forth cGMP (for drugs) and QSR (for medical devices), and their foreign equivalents, which are enforced by the FDA and other national regulatory bodies through their facilities inspection programs. In complying with cGMP and foreign regulatory requirements, we and any of our third-party manufacturers or suppliers will be obligated to expend time, money and effort in production, record-keeping and quality control to ensure that our products meet applicable specifications and other requirements. QSR requirements also impose extensive testing, control and documentation requirements. State regulatory authorities and the regulatory agencies of other countries have similar requirements. In addition, we will be required to comply with regulatory requirements of the FDA, state regulatory agencies and the regulatory agencies of other countries concerning the reporting of AEs and device malfunctions, corrections and removals (e.g., recalls), promotion and advertising and general prohibitions against the manufacture and distribution of adulterated and misbranded devices.

Failure to comply with these regulatory requirements could result in enforcement actions, including, but not limited to, significant civil fines, product seizures, injunctions and/or criminal prosecution of responsible individuals and us. Any such actions would have a material adverse effect on our business, financial condition and results of operations.

Manufacturers and manufacturers’ facilities are required to comply with extensive requirements imposed by the FDA and comparable foreign regulatory authorities, including ensuring that quality control and manufacturing procedures conform to cGMPs regulations. As such, we and our contract manufacturers will be subject to continual review and inspections to assess compliance with cGMP and adherence to commitments made in any NDA or comparable foreign application. Accordingly, we and others with whom we work must continue to expend time, money, and effort in all areas of regulatory compliance, including manufacturing, production and quality control.

Any regulatory approvals that we receive for our potential drug candidates will be subject to limitations on the approved indicated uses for which the drug candidate may be marketed and promoted or to the conditions of approval (including the potential for a requirement to implement a Risk Evaluation and Mitigation Strategy) or contain requirements for potentially costly post-marketing testing. We will be required to report certain adverse reactions and production problems, if any, to the FDA and comparable foreign regulatory authorities. Any new legislation addressing drug safety issues could result in delays in drug development or commercialization, or increased costs to assure compliance. The FDA and other agencies, including the Department of Justice, as well as foreign regulatory authorities closely regulate and monitor the post-approval marketing and promotion of drug candidates to ensure that they are manufactured, marketed and distributed only for the approved indications and in accordance with the provisions of the approved labeling. We will have to comply with requirements concerning advertising and promotion for our potential drug candidates and any products for which we receive approval. Promotional communications with respect to prescription drugs are subject to a variety of legal and regulatory restrictions and must be consistent with the information in the drug candidate’s approved label. As such, we may not promote our potential drug candidates for indications or uses for which they do not have approval. In the EU, the advertising and promotion of medicinal products are subject to both EU and EU Member States’ laws governing promotion of medicinal products, interactions with physicians and other healthcare professionals, misleading and comparative advertising and unfair commercial practices. General requirements for advertising and promotion of medicinal products, such as direct-to-consumer advertising of prescription medicinal products are established in EU law. However, the details are governed by regulations in individual EU Member States and can differ from one country to another. For example, applicable laws require that promotional materials and advertising in relation to medicinal products comply with the product’s Summary of Product Characteristics, or SmPC, which may require approval by the competent national authorities in connection with an MA. The SmPC is the document that provides information to physicians concerning the safe and effective use of the product. Promotional activity that does not comply with the SmPC is considered off-label and is prohibited in the EU.

The holder of an approved NDA or equivalent foreign application must submit new or supplemental applications and obtain approval for certain changes to the approved drug candidate labeling, or manufacturing process. We could also be asked to conduct post-marketing clinical trials to verify the safety and efficacy of our potential drug candidates in general or in specific patient subsets. If original marketing approval was obtained via the accelerated approval pathway, we could be required to conduct a successful post-marketing clinical trial to confirm clinical benefit for our drug candidates. An unsuccessful post-marketing study or failure to complete such a study could result in the withdrawal of marketing approval.

If a regulatory authority discovers previously unknown problems with a drug or device, such as AEs of unanticipated severity or frequency, or problems with the facility where the drug candidate is manufactured, or disagrees with the promotion, marketing or labeling of a drug candidate, including if approved, such regulatory authority may impose restrictions on that drug candidate, an

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approved drug, or us, including requiring withdrawal of the approved drug from the market. If we fail to comply with applicable regulatory requirements, a regulatory authority or enforcement authority may, among other things:

•issue warning or untitled letters that would result in adverse publicity;

•impose civil or criminal penalties;

•suspend, vary or withdraw regulatory approvals;

•suspend any of our ongoing clinical trials;

•mandate modifications to promotional materials or require us to provide corrective information to healthcare practitioners;

•require us to enter into a consent decree or permanent injunction, which can include imposition of various fines, reimbursements for inspection costs, required due dates for specific actions and penalties for noncompliance;

•refuse to approve pending applications or supplements to approved applications submitted by us;

•impose restrictions on our operations, including closing our contract manufacturers’ facilities;

•seize or detain drug candidates or approved drugs; or

•require a drug candidate or approved drugs recall.

Any government investigation of alleged violations of law could require us to expend significant time and resources in response and could generate negative publicity. Any failure to comply with ongoing regulatory requirements may significantly and adversely affect our ability to commercialize and generate revenue from our drug candidates. If regulatory sanctions are applied or if regulatory approval is suspended, varied or withdrawn, the value of our company and our operating results will be adversely affected.

Non-compliance by us or any future collaborator with regulatory requirements, including safety monitoring or pharmacovigilance, and with requirements related to the development of products for the pediatric population can also result in significant financial penalties.

We may be unable to obtain and retain orphan drug designations for some of our drug candidates or to maintain the benefits associated with orphan drug designation status, including market exclusivity, which may cause our revenue, if any, to be reduced.

Regulatory authorities in some jurisdictions, including the United States and the EU, may designate drugs for relatively small patient populations as orphan drugs. Under the Orphan Drug Act, the FDA may grant orphan drug designation to a drug intended to treat a rare disease or condition, defined as a disease or condition with a patient population of fewer than 200,000 in the United States, or a patient population greater than 200,000 in the United States when there is no reasonable expectation that the cost of developing and making available the drug in the United States will be recovered from sales in the United States for that drug. Orphan drug designation must be requested before submitting an NDA. In the United States, orphan drug designation entitles a party to financial incentives such as opportunities for grant funding towards clinical trial costs, tax advantages, and user-fee waivers. After the FDA grants orphan drug designation, the generic identity of the drug and its potential orphan use are disclosed publicly by the FDA. Orphan drug designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process. In the EU, the European Commission, following an opinion from the EMA’s Committee for Orphan Medicinal Products may grant orphan drug designation to promote the development of products (i) that are intended for the diagnosis, prevention, or treatment of a life-threatening or chronically debilitating conditions; (ii) either such conditions affect not more than five in 10,000 persons in the EU community, or without incentives, it is unlikely that sales of the drug in the EU would be sufficient to justify the necessary investment in developing the drug or biological product; and (iii) there exists no satisfactory authorized method of diagnosis, prevention, or treatment of the condition that has been authorized in the EU, or even if such method exists, the product will be of significant benefit to those affected by that condition. In the EU, orphan drug designation provides a range of potential incentives for medicinal products that have been granted an orphan designation by the European Commission, including protocol assistance, access to the centralized authorization procedure and fee reductions.

If a product that has orphan drug designation subsequently receives the first FDA approval for a particular active ingredient for the disease for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other applications, including an NDA, to market the same drug for the same indication for seven years, except in limited circumstances such as a showing of clinical superiority to the product with orphan product exclusivity or if the FDA finds that the holder of the orphan product exclusivity has not shown that it can assure the availability of sufficient quantities of the orphan drug to meet the needs of patients with the disease or condition for which the drug was designated. A product may obtain orphan drug

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exclusivity for each indication that has been designated upon approval of the indication, subject to the qualifications above. Any orphan drug exclusivity granted for second or subsequent indications applies only to those subsequent indications and does not block approval of a product for the first indication once the initial period of exclusivity has expired. Moreover, even if one of our drug candidates receives orphan product exclusivity, the FDA can still approve other drugs that have a different active ingredient for use in treating the same indication or disease.

In the EU, upon grant of a marketing authorization, orphan medicinal products are entitled to a ten-year period of market exclusivity for the approved therapeutic indication, which means that the EMA cannot accept another marketing authorization application or accept an application to extend for a similar product and the European Commission cannot grant a marketing authorization for the same indication for a period of ten years. The period of market exclusivity is extended by two years for orphan medicinal products that have also complied with an agreed PIP. No extension to any supplementary protection certificate can be granted on the basis of pediatric studies for orphan indications. Orphan medicinal product designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process. The period of market exclusivity may, however, be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria on the basis of which it received orphan medicinal product destination, including where it can be demonstrated on the basis of available evidence that the original orphan medicinal product is sufficiently profitable not to justify maintenance of market exclusivity or where the prevalence of the condition has increased above the threshold. Additionally, an MA may be granted to a similar medicinal product with the same orphan indication during the 10 year period if: (i) if the applicant consents to a second original orphan medicinal product application; (ii) if the manufacturer of the original orphan medicinal product is unable to supply sufficient quantities; or (iii) if the second applicant can establish that its product, although similar, is safer, more effective or otherwise clinically superior to the original orphan medicinal product. A company may voluntarily remove a product from the register of orphan products.

We have received orphan drug designation by the FDA and European Commission for EryDex for the treatment of A-T. We may seek orphan drug designation in the United States, the EU and other European countries for additional orphan indications in which there is a medically plausible basis, including other rare diseases. In the future, exclusive marketing rights in the United States, if granted, may be limited if we seek approval for an indication broader than the orphan drug designated indication and may be lost if the FDA later determines that the request for the orphan drug designation was materially defective or if the manufacturer is unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or condition. In addition, although we have sought or intend to seek orphan drug designation, we may never receive approval for such designations.

If we fail to comply with healthcare laws, we could face substantial penalties and our business, operations and financial condition could be adversely affected.

Our operations are subject to various federal and state fraud and abuse and other healthcare laws. The laws that may impact our operations include:

•federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, receiving, offering or paying any remuneration (including any kickback, bribe, or rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce, or in return for, either the referral of an individual, or the purchase, lease, order or recommendation of any good, facility, item or service for which payment may be made, in whole or in part, under a federal healthcare program, such as the Medicare and Medicaid programs. A person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation. In addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act;

•federal civil and criminal false claims laws, including the False Claims Act, and civil monetary penalty laws, which impose criminal and civil penalties, including through civil “qui tam” or “whistleblower” actions, against individuals or entities from, among other things, knowingly presenting, or causing to be presented, claims for payment or approval from Medicare, Medicaid, or other third-party payors that are false or fraudulent or knowingly making a false statement to improperly avoid, decrease or conceal an obligation to pay money to the federal government. Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of these statutes or specific intent to violate them in order to have committed a violation;

•the federal HIPAA, which created new federal criminal statutes that prohibit, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and

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knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters;

•HIPAA, as amended by HITECH, and their respective implementing regulations, which impose requirements on certain covered healthcare providers, health plans, and healthcare clearinghouses as well as their respective business associates and their subcontractors that perform services for them that involve the use, or disclosure of, individually identifiable health information, relating to the privacy, security and transmission of individually identifiable health information without appropriate authorization;

•the federal Physician Payment Sunshine Act, created under the PPACA, and its implementing regulations, which require certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program to report annually to the U.S. Department of Health and Human Services under the Open Payments Program, information related to payments or other transfers of value made to physicians, (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other healthcare professionals (such as physician assistants and nurse practitioners), and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members;

•federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; and

•analogous state and foreign laws and regulations, such as state and foreign anti-kickback, false claims, consumer protection and unfair competition laws which may apply to pharmaceutical business practices, including but not limited to, research, distribution, sales and marketing arrangements as well as submitting claims involving healthcare items or services reimbursed by any third-party payor, including commercial insurers; state and foreign laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the government that otherwise restricts payments that may be made to healthcare providers and other potential referral sources; state and foreign laws that require the registration of sales representatives; state and foreign laws that require drug manufacturers to file reports with states or foreign regulatory authorities regarding pricing and marketing information, such as the tracking and reporting of gifts, compensations and other remuneration and items of value provided to healthcare professionals and entities; and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.

Outside the United States, interactions between pharmaceutical companies and health care professionals are also governed by strict laws, such as national anti-bribery laws of European countries, national sunshine rules, regulations, industry self-regulation codes of conduct and physicians’ codes of professional conduct. Failure to comply with these requirements could result in reputational risk, public reprimands, administrative penalties, fines or imprisonment.

Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available, it is possible that some of our business activities, including compensating physicians with stock or stock options, could, despite our efforts to comply, be subject to challenge under one or more of such laws. Efforts to ensure that our business arrangements will comply with applicable healthcare laws may involve substantial costs. It is possible that governmental and enforcement authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law interpreting applicable fraud and abuse or other healthcare laws and regulations. If any such actions are instituted against us, those actions could have a significant impact on our business, including the imposition of civil, criminal and administrative penalties, damages, disgorgement, monetary fines, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, imprisonment, contractual damages, reputational harm, diminished profits and future earnings, and curtailment of our operations, any of which could adversely affect our ability to operate our business and our results of operations. In addition, the approval and commercialization of any of our drug candidates, if approved, outside the United States will also likely subject us to foreign equivalents of the healthcare laws mentioned above and comparable risks, among other foreign laws.

We are subject to substantial government regulation that is subject to change and could force us to make modifications to how we develop, manufacture, market, and price our products in the future.

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The medical device industry is regulated extensively by governmental authorities, principally the FDA in the U.S. and corresponding state and foreign regulatory authorities. The majority of our manufacturing processes are required to comply with quality systems regulations, including cGMP requirements that cover the methods and documentation of the design, testing, production, control, quality assurance, labeling, packaging and shipping of our products. Failure to comply with applicable medical device regulatory requirements could result in, among other things, warning letters, fines, injunctions, civil penalties, repairs, replacements, refunds, recalls or seizures of products, total or partial suspensions of production, refusal of the FDA or other regulatory authorities to grant pre-market clearances or approvals for our products, withdrawals, or suspensions of future or current clearances or approvals and criminal prosecution.

In addition, our products are subject to pre-clearance requirements by the FDA and similar foreign regulatory authorities that govern a wide variety of product activities from design and development to labeling, manufacturing, promotion, sales, and distribution. Compliance with these regulations may be time consuming, burdensome, and expensive for us. The failure to obtain, or the loss or suspension of any such pre-approval, would negatively affect our ability to sell our products and harm our anticipated revenues.

Foreign governmental authorities that regulate the manufacture and sale of medical devices have become increasingly stringent and, to the extent we sell our products in foreign countries, we may be subject to rigorous regulation in the future. Regulatory changes could result in restrictions on our ability to carry on or expand our operations, higher than anticipated costs or lower than anticipated revenue.

The policies of the FDA and of other regulatory authorities may change and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our potential drug candidates. We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or abroad. For instance, the regulatory landscape related to clinical trials in the EU recently evolved. The EU Clinical Trials Regulation, or CTR, which was adopted in April 2014 and repeals the EU Clinical Trials Directive, became applicable on January 31, 2022. The CTR allows sponsors to make a single submission to both the competent authority and an ethics committee in each EU Member State, leading to a single decision for each EU Member State. The assessment procedure for the authorization of clinical trials has been harmonized as well, including a joint assessment by all EU Member States concerned, and a separate assessment by each EU Member State with respect to specific requirements related to its own territory, including ethics rules. Each EU Member State’s decision is communicated to the sponsor via the centralized EU portal. Once the clinical trial approved, clinical study development may proceed. The CTR foresees a three-year transition period. The extent to which ongoing and new clinical trials will be governed by the CTR varies. For clinical trials in relation to which application for approval was made on the basis of the Clinical Trials Directive before January 31, 2023, the Clinical Trials Directive will continue to apply on a transitional basis until January 31, 2025. By that date, all ongoing trials will become subject to the provisions of the CTR. The CTR will apply to clinical trials from an earlier date if the related clinical trial application was made on the basis of the CTR or if the clinical trial has already transitioned to the CTR framework before January 31, 2025. Compliance with the CTR requirements by us and our third-party service providers, such as CROs, may impact our developments plans. In light of the entry into application of the CTR on January 31, 2022, we may be required to transition clinical trials for which we have obtained regulatory approvals in accordance with the CTD to the regulatory framework of the CTR. Transition of clinical trials governed by the CTD to the CTR will be required for clinical trials which will have at least one site active in the EU on January 30, 2025. A transitioning application would need to be submitted to the competent authorities of EU Member States through the Clinical Trials Information Systems and related regulatory approval obtained to continue the clinical trial past January 30, 2025. This would require financial, technical and human resources. If we are unable to transition our clinical trials in time, the conduct of those clinical trials may be negatively impacted.

It is currently unclear to what extent the UK will seek to align its regulations with the EU in the future. The UK regulatory framework in relation to clinical trials is derived from existing EU legislation (as implemented into UK law, through secondary legislation). On January 17, 2022, the UK Medicines and Healthcare products Regulatory Agency, or MHRA, launched an eight-week consultation on reframing the UK legislation for clinical trials. The UK Government published its response to the consultation on March 21, 2023 confirming that it would bring forward changes to the legislation. These resulting legislative amendments will determine how closely the UK regulations will align with the CTR. Failure of the UK to closely align its regulations with the EU may have an effect on the cost of conducting clinical trials in the UK as opposed to other countries and/or make it harder to seek a marketing authorization for the Company's drug candidates on the basis of clinical trials conducted in the United Kingdom.

In addition, on April 26, 2023, the European Commission adopted a proposal for a new Directive and Regulation to revise the existing pharmaceutical legislation. If adopted in the form proposed, the recent European Commission proposals to revise the existing EU laws governing authorization of medicinal products may result in a decrease in data and market exclusivity opportunities for our drug candidates in the EU and make them open to generic or biosimilar competition earlier than is currently the case with a related reduction in reimbursement status.

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If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any future marketing approval that we may have obtained and we may not achieve or sustain profitability, which would adversely affect our business, prospects, financial condition and results of operations.

If we or any contract manufacturers and suppliers we engage fail to comply with environmental, health, and safety laws and regulations, we could become subject to fines or penalties or incur costs that could have a material adverse effect on the success of our business.

We and any contract manufacturers and suppliers we engage are subject to numerous federal, state, and local environmental, health, and safety laws, regulations, and permitting requirements, including those governing laboratory procedures; the generation, handling, use, storage, treatment, and disposal of hazardous and regulated materials and wastes; the emission and discharge of hazardous materials into the ground, air, and water; and employee health and safety. Our operations involve the use of hazardous and flammable materials, including chemicals and radioactive materials. Our operations also produce hazardous waste. We generally contract with third parties for the disposal of these materials and wastes. We cannot eliminate the risk of contamination or injury from these materials. In the event of contamination or injury resulting from our use of hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources. Under certain environmental laws, we could be held responsible for costs relating to any contamination at our current or past facilities and at third-party facilities. We also could incur significant costs associated with civil or criminal fines and penalties.

Compliance with applicable environmental laws and regulations may be expensive, and current or future environmental laws and regulations may impair our research, drug development and manufacturing efforts. In addition, we cannot entirely eliminate the risk of accidental injury or contamination from these materials or wastes. Although we maintain workers’ compensation insurance to cover us for costs and expenses we may incur due to injuries to our employees resulting from the use of hazardous materials, this insurance may not provide adequate coverage against potential liabilities. We do not carry specific hazardous waste insurance coverage, and our property, casualty, and general liability insurance policies specifically exclude coverage for damages and fines arising from hazardous waste exposure or contamination. Accordingly, in the event of contamination or injury, we could be held liable for damages or be penalized with fines in an amount exceeding our resources, and our clinical trials or regulatory approvals could be suspended, which could have a material adverse effect on our business, financial condition, results of operations, and prospects.

Our business activities may be subject to the FCPA and similar anti-bribery and anti-corruption laws.

Our business activities may be subject to the FCPA and similar anti-bribery or anti-corruption laws, regulations or rules of other countries in which we may operate, including the UK Bribery Act. The FCPA generally prohibits offering, promising, giving, or authorizing others to give anything of value, either directly or indirectly, to a non-U.S. government official in order to influence official action, or otherwise obtain or retain business. The FCPA also requires public companies to make and keep books and records that accurately and fairly reflect the transactions of the corporation and to devise and maintain an adequate system of internal accounting controls. Our business is heavily regulated and therefore involves significant interaction with public officials, including officials of non-U.S. governments. Additionally, in many other countries, the health care providers who prescribe pharmaceuticals are employed by their government, and the purchasers of pharmaceuticals are government entities; therefore, our dealings with these prescribers and purchasers are subject to regulation under the FCPA. Recently the SEC and Department of Justice have increased their FCPA enforcement activities with respect to biotechnology and pharmaceutical companies. There is no certainty that all of our employees, agents, contractors, or those of our affiliates, will comply with all applicable laws and regulations, particularly given the high level of complexity of these laws. Violations of these laws and regulations could result in fines, criminal sanctions against us, our officers, or our employees, the closing down of our facilities, requirements to obtain export licenses, cessation of business activities in sanctioned countries, implementation of compliance programs, and prohibitions on the conduct of our business. Any such violations could include prohibitions on our ability to offer our drug candidates in one or more countries and could materially damage our reputation, our brand, our international expansion efforts, our ability to attract and retain employees, and our business, prospects, operating results, and financial condition.

Any collaboration arrangements that we may enter into in the future may not be successful, which could adversely affect our ability to develop and commercialize potential future drug candidates.

We may consider collaboration arrangements with pharmaceutical or biotechnology companies for the development or commercialization of drug candidates depending on the merits of retaining or divesting some or all commercialization rights. We will face, to the extent that we decide to enter into collaboration agreements, significant competition in seeking appropriate collaborators. Moreover, collaboration arrangements are complex and time-consuming to negotiate, document, implement and maintain. We may not be successful in our efforts to establish and implement collaborations or other alternative arrangements should we so chose to enter into such arrangements. The terms of any collaborations or other arrangements that we may establish may not be favorable to us.

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Any future collaborations that we enter into may not be successful. The success of our collaboration arrangements will depend heavily on the efforts and activities of our collaborators. Collaborations are subject to numerous risks, which may include that:

•collaborators have significant discretion in determining the efforts and resources that they will apply to collaborations;

•collaborators may not pursue development and commercialization of our drug candidates or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in their strategic focus due to the acquisition of competitive drug candidates, availability of funding or other external factors, such as a business combination that diverts resources or creates competing priorities;

•collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial, abandon a drug candidate, repeat or conduct new clinical trials or require a new formulation of a drug candidate for clinical testing;

•collaborators could independently develop, or develop with third parties, drug candidates that compete directly or indirectly with our drug candidates;

•a collaborator with marketing, manufacturing and distribution rights to one or more drug candidates may not commit sufficient resources to or otherwise not perform satisfactorily in carrying out these activities;

•we could grant exclusive rights to our collaborators that would prevent us from collaborating with others;

•collaborators may not properly maintain or defend our intellectual property rights or may use our intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential liability;

•disputes may arise between us and a collaborator that causes the delay or termination of the research, development or commercialization of our current or future drug candidates or that results in costly litigation or arbitration that diverts management attention and resources;

•collaborations may be terminated, and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable current or future drug candidates;

•collaborators may own or co-own intellectual property covering our drug candidates that results from our collaborating with them, and in such cases, we would not have the exclusive right to develop or commercialize such intellectual property; and

•a collaborator’s sales and marketing activities or other operations may not be in compliance with applicable laws resulting in civil or criminal proceedings.

Risks Relating to Our Intellectual Property

If we are unable to obtain and maintain sufficient intellectual property protection for our current drug candidates, any future drug candidates, and other proprietary technology we develop, or if the scope of the intellectual property protection is not sufficiently broad, our competitors could develop and commercialize drug candidates similar or identical to ours, and our ability to successfully commercialize our current drug candidate, if approved, any future drug candidates, and other proprietary technologies if approved, may be adversely affected.

Our commercial success will depend in part on obtaining and maintaining a combination of patent protection, trade secret protection and confidentiality agreements to protect the intellectual property related to our current and future drug candidates and the methods used to manufacture them, as well as successfully defending these patents against third-party challenges. Our ability to stop third parties from making, using, selling, offering to sell or importing our drug candidates is dependent upon the extent to which we have rights under valid and enforceable patents or trade secrets that cover these activities.

The patent positions of biotechnology and pharmaceutical companies can be highly uncertain and involve complex legal and factual questions for which important legal principles remain unresolved. No consistent policy regarding the breadth of claims allowed in pharmaceutical patents has emerged to date in the United States or in many jurisdictions outside of the United States. Changes in either the patent laws or interpretations of patent laws in the United States and other countries may diminish the value of our intellectual property. Accordingly, we cannot predict the breadth of claims that may be enforced in the issued patents that we currently own, or in patents that may issue from the applications we currently or may in the future own or license from third parties. Further, if

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any patents we obtain or license are deemed invalid and unenforceable, our ability to commercialize or license our technology could be adversely affected.

Others may have filed, and in the future are likely to file, patent applications covering drug candidates that are similar, identical or competitive to ours or important to our business. We cannot be certain that any patent application owned by a third party will not have priority over patent applications filed or in-licensed by us, or that we or our licensors will not be involved in interference, opposition or invalidity proceedings before U.S. or non-U.S. patent offices.

The degree of future protection for our proprietary rights is uncertain because legal means afford only limited protection and may not adequately protect our rights or permit us to gain or keep our competitive advantage. Only limited protection may be available and may not adequately protect our rights or permit us to gain or keep any competitive advantage. If we do not adequately protect our intellectual property and proprietary technology, competitors may be able to use our current or future drug candidates and proprietary technologies and erode or negate any competitive advantage we may have, which could have a material adverse effect on our financial condition and results of operations. For example:

•others may be able to make compounds that are similar to our drug candidates but that are not covered by the claims of our patents;

•we might not have been the first to make the inventions covered by our pending patent applications;

•we might not have been the first to file patent applications for these inventions;

•others may independently develop similar or alternative technologies or duplicate any of our technologies;

•any patents that we obtain may not provide us with any competitive advantages;

•we may not develop additional proprietary technologies that are patentable; or

•the patents of others may have an adverse effect on our business.

Should any of these events occur, they would significantly harm our business, results of operations and prospects.

We have applied, and we intend to continue applying, for patents covering aspects of our current drug candidates and device, any future drug candidates, any future improvements on the device or other proprietary technologies and their uses that we deem appropriate. However, we may not be able to apply for patents on certain aspects of our current or future drug candidates, proprietary technologies and their uses in a timely fashion, at a reasonable cost, in all jurisdictions, or at all, and any potential patent coverage we obtain may not be sufficient to prevent substantial competition.

Without patent protection on our current or future drug candidates, our ability to assert our patents to stop others from using or selling our current or future drug candidates may be limited. Due to the patent laws of a country, or the decisions of a patent examiner in a country, or our own filing strategies, we may not obtain patent coverage for all of our current or future drug candidates or methods involving the use of these candidates in a particular patent application. We plan to pursue divisional patent applications or continuation patent applications in the United States and other countries, where applicable, to obtain claim coverage for inventions which were disclosed but not claimed in a particular parent patent application.

The patent application process is subject to numerous risks and uncertainties, and there can be no assurance that we or any of our actual or potential future collaborators will be successful in protecting our current drug candidates, any future drug candidate, and other proprietary technologies and their uses by obtaining, defending, and enforcing patents. These risks and uncertainties include the following:

•the U.S. Patent and Trademark Office, or USPTO, and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other provisions during the patent process, the noncompliance with which can result in abandonment or lapse of a patent or patent application, and partial or complete loss of patent rights in the relevant jurisdiction;

•patent applications may not result in any patents being issued;

•patents that may be issued or in-licensed may be challenged, invalidated, modified, revoked, circumvented, found to be unenforceable or otherwise may not provide any competitive advantage;

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•our competitors, many of whom have substantially greater resources than we do and many of whom have made significant investments in competing technologies, may seek or may have already obtained patents that will limit, interfere with or eliminate our ability to make, use and sell our drug candidates;

•other parties may have designed around our claims or developed technologies that may be related or competitive to our platform, may have filed or may file patent applications and may have received or may receive patents that overlap or conflict with our patent applications, either by claiming the same compounds, compositions of matter, or methods, or formulations, or by claiming subject matter that could dominate our patent position;

•any successful opposition to any patents owned by or licensed to us could deprive us of rights necessary to prevent others from practicing our technologies or to successfully commercialize any drug candidates that we may develop;

•because patent applications in the United States and most other countries are confidential for a period of time after filing, we cannot be certain that we or our licensors were the first to file any patent application related to our current drug candidates, any future drug candidates, and other proprietary technologies and their uses;

•an interference proceeding can be provoked by a third party or instituted by the USPTO to determine who was the first to invent any of the subject matter covered by the patent claims of applications we may in-license which have an effective filing date before March 16, 2013;

•there may be significant pressure on the U.S. government and international governmental bodies to limit the scope of patent protection both inside and outside the United States for disease treatments that prove successful, as a matter of public policy regarding worldwide health concerns; and

•countries other than the United States may have patent laws less favorable to patentees than those upheld by U.S. courts, allowing foreign competitors a better opportunity to create, develop and market competing drug candidates in those countries.

The patent prosecution process is also expensive and time-consuming, and we may not be able to file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. It is also possible that we will fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection. Although we enter into non-disclosure and confidentiality agreements with parties who have access to patentable aspects of our research and development output, such as our employees, corporate collaborators, outside scientific collaborators, CROs, contract manufacturers, consultants, advisors and other third parties, any of these parties may breach such agreements and disclose such output before a patent application is filed, thereby jeopardizing our ability to seek patent protection for such output. In addition, our ability to obtain and maintain valid and enforceable patents depends on whether the differences between our inventions and the prior art allow our inventions to be patentable over the prior art. Furthermore, publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing, or in some cases not at all. Therefore, we cannot be certain that we or our licensors were the first to make the inventions claimed in any of our owned or licensed patents or pending patent applications, or that we or our licensors were the first to file for patent protection of such inventions. We may also rely on trade secrets to protect our technology, especially where we do not believe patent protection is appropriate or feasible. However, trade secrets are difficult to protect. Although we use reasonable efforts to protect our trade secrets, our employees, consultants, contractors, outside scientific collaborators and other advisors may unintentionally or willfully disclose our information to competitors. Enforcing a claim that a third party illegally obtained and is using any of our trade secrets is expensive and time consuming, and the outcome is unpredictable. In addition, courts outside the United States are sometimes less willing to protect trade secrets. Moreover, our competitors may independently develop equivalent knowledge, methods and know-how.

We may be involved in lawsuits to protect or enforce our patents or the patents of our licensors, which could be expensive, time consuming, and unsuccessful. Further, our issued patents could be found invalid or unenforceable if challenged in court, and we may incur substantial costs as a result of litigation or other proceedings relating to patent and other intellectual property rights.

Third parties, including competitors, may infringe, misappropriate or otherwise violate our patents, patents that may issue to us in the future, or the patents of our licensors that are licensed to us. To counter infringement or unauthorized use, we may need to choose to file infringement claims, which can be expensive and time-consuming. We may not be able to prevent, alone or with our licensors, infringement, misappropriation, or other violation of our intellectual property, particularly in countries where the laws may not protect those rights as fully as in the United States. If we choose to go to court to stop another party from using the inventions claimed in any patents we obtain, that individual or company has the right to ask the court to rule that such patents are invalid or should not be enforced against that third party for any number of reasons. In patent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceability are commonplace. Grounds for a validity challenge include an alleged failure

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to meet any of several statutory requirements for patentability, including lack of novelty, obviousness or non-enablement. Grounds for an unenforceability assertion could include an allegation that someone connected with prosecution of the patent withheld relevant information from the USPTO or made a misleading statement during prosecution. Third parties may also raise similar claims before the USPTO, even outside the context of litigation. Similar mechanisms for challenging the validity and enforceability of a patent exist in non-U.S. patent offices and may result in the revocation, cancellation, or amendment of any non-U.S. patents we hold in the future. The outcome following legal assertions of invalidity and unenforceability is unpredictable, and prior art could render our patents, or those of our licensor’s, invalid. If a defendant were to prevail on a legal assertion of invalidity and/or unenforceability, we would lose at least part, and perhaps all, of the patent protection on one or more drug candidates. Such a loss of patent protection would have a material adverse impact on our business.

These lawsuits are expensive and would consume time and resources and divert the attention of managerial and scientific personnel even if we were successful in stopping the infringement of such patents. In addition, there is a risk that the court will decide that such patents are not valid and that we do not have the right to stop the other party from using the claimed inventions. There is also the risk that, even if the validity of such patents is upheld, the court will refuse to stop the other party on the ground that such other party’s activities do not infringe our rights to such patents. In addition, the U.S. Supreme Court has recently modified some tests used by the USPTO in granting patents over the past 20 years, which may decrease the likelihood that we will be able to obtain patents and increase the likelihood of challenge of any patents we obtain or license.

Interference or derivation proceedings provoked by third parties or brought by us or declared by the USPTO may be necessary to determine the priority of inventions with respect to our patents or patent applications, or those of our licensor’s. An unfavorable outcome could require us to cease using the related technology or to attempt to license rights to it from the prevailing party. Our business could be harmed if the prevailing party does not offer us a license on commercially reasonable terms or at all, or if a non-exclusive license is offered and our competitors gain access to the same technology. Our defense of litigation or interference proceedings may fail and, even if successful, may result in substantial costs and distract our management and other employees. In addition, the uncertainties associated with litigation could have a material adverse effect on our ability to raise the funds necessary to continue our clinical trials, continue our research programs, license necessary technology from third parties or enter into development or manufacturing partnerships that would help us bring our current and any future drug candidates to market.

Even if resolved in our favor, litigation or other legal proceedings relating to our intellectual property rights may cause us to incur significant expenses, and could distract our technical and management personnel from their normal responsibilities. Such litigation or proceedings could substantially increase our operating losses and reduce the resources available for development activities or any future sales, marketing or distribution activities. We may not have sufficient financial or other resources to conduct such litigation or proceedings adequately. Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their greater financial resources. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could compromise our ability to compete in the marketplace.

Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. There could also be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of our common stock.

Our ability to enforce our patent rights depends on our ability to detect infringement. It may be difficult to detect infringers who do not advertise the components or methods that are used in connection with their drug candidates. Moreover, it may be difficult or impossible to obtain evidence of infringement in a competitor’s or potential competitor’s drug candidate. We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded if we were to prevail may not be commercially meaningful.

In addition, proceedings to enforce or defend our patents, including those of our licensor’s, could put our patents at risk of being invalidated, held unenforceable or interpreted narrowly. Such proceedings could also provoke third parties to assert claims against us, including that some or all of the claims in one or more of our patents are invalid or otherwise unenforceable. If any of our patents covering our drug candidates are invalidated or found unenforceable, or if a court found that valid, enforceable patents held by third parties covered one or more of our drug candidates, our competitive position could be harmed or we could be required to incur significant expenses to enforce or defend our rights. If we initiate lawsuits to protect or enforce our patents, or litigate against third party claims, such proceedings would be expensive and would divert the attention of our management and technical personnel.

We may infringe the intellectual property rights of others, which may prevent or delay our drug development efforts and stop us from commercializing or increase the costs of commercializing our drug candidates.

Our success will depend in part on our ability to operate without infringing the intellectual property rights of third parties. We cannot guarantee that our drug candidates, or manufacture or use of our drug candidates, will not infringe third-party patents.

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Furthermore, a third party may claim that we or our manufacturing or commercialization collaborators are using inventions covered by the third party’s patent rights and may go to court to stop us from engaging in our normal operations and activities, including making or selling our drug candidates. These lawsuits are costly and could affect our results of operations and divert the attention of managerial and scientific personnel. There is a risk that a court would decide that we or our commercialization collaborators are infringing the third party’s patents and would order us or our collaborators to stop the activities covered by the patents. In that event, we or our commercialization collaborators may not have a viable way around the patent and may need to halt commercialization of the relevant drug candidate. In addition, there is a risk that a court will order us or our collaborators to pay the other party damages for having violated the other party’s patents. If we collaborate with third parties in the development of technology in the future, our collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to litigation or potential liability. Further, our collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability. In the future, we may agree to indemnify our collaborators against certain intellectual property infringement claims brought by third parties. The pharmaceutical and biotechnology industries have produced a proliferation of patents, and it is not always clear to industry participants, including us, which patents cover various types of drug candidates or methods of use. The coverage of patents is subject to interpretation by the courts, and the interpretation is not always uniform.

Any claims of patent infringement asserted by third parties would be time consuming and could:

•result in costly litigation;

•divert the time and attention of our technical personnel and management;

•cause development delays;

•prevent us from out-licensing or commercializing EryDex, or our other drug candidates until the asserted patent expires or is finally held invalid, unenforceable, or not infringed in a court of law;

•require us to develop non-infringing technology, which may not be possible on a cost-effective basis;

•require us to pay damages to the party whose intellectual property rights we may be found to be infringing, which may include treble damages if we are found to have been willfully infringing such intellectual property;

•require us to pay the attorney’s fees and costs of litigation to the party whose intellectual property rights we may be found to be infringing; and/or

•require us to enter into royalty or licensing agreements, which may not be available on commercially reasonable terms, or at all.

If we are sued for patent infringement, we would need to demonstrate that our drug candidates or methods either do not infringe the patent claims of the relevant patent or that the patent claims are invalid or unenforceable, and we may not be able to do this. Proving invalidity or unenforceability is difficult.

For example, in the United States, proving invalidity requires a showing of clear and convincing evidence to overcome the presumption of validity enjoyed by issued patents. Even if we are successful in these proceedings, we may incur substantial costs and divert management’s time and attention in pursuing these proceedings, which could have a material adverse effect on us. If we are unable to avoid infringing the patent rights of others, we may be required to seek a license, which may not be available, defend an infringement action or challenge the validity or enforceability of the patents in court. Patent litigation is costly and time consuming. We may not have sufficient resources to bring these actions to a successful conclusion. In addition, if we do not obtain a license, develop or obtain non-infringing technology, fail to defend an infringement action successfully or have infringed patents declared invalid or unenforceable, we may incur substantial monetary damages, encounter significant delays in bringing our drug candidates to market and be precluded from manufacturing or selling our drug candidates.

We do not routinely conduct independent reviews of pending patent applications of and patents issued to third parties. We cannot be certain that others have not filed patent applications for technology covered by our pending applications, or that we were the first to invent the technology, because:

•some patent applications in the United States may be maintained in secrecy until the patents are issued;

•patent applications in the United States and elsewhere can be pending for many years before issuance, or unintentionally abandoned patents or applications can be revived;

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•pending patent applications that have been published can, subject to certain limitations, be later amended in a manner that could cover our technologies, our drug candidates or the use of our drug candidates;

•identification of third-party patent rights that may be relevant to our technology is difficult because patent searching is imperfect due to differences in terminology among patents, incomplete databases and the difficulty in assessing the meaning of patent claims;

•patent applications in the United States are typically not published until 18 months after the priority date; and

•publications in the scientific literature often lag behind actual discoveries.

Furthermore, the scope of a patent claim is determined by an interpretation of the law, the written disclosure in a patent and the patent’s prosecution history and can involve other factors such as expert opinion. Our interpretation of the relevance or the scope of claims in a patent or a pending application may be incorrect, which may negatively impact our ability to market our drug candidates. Further, we may incorrectly determine that our technologies, or drug candidates are not covered by a third-party patent or may incorrectly predict whether a third party’s pending patent application will issue with claims of relevant scope. Our determination of the expiration date of any patent in the United States or abroad that we consider relevant may be incorrect, which may negatively impact our ability to develop and market our drug candidates.

Our competitors may have filed, and may in the future file, patent applications covering technology similar to ours, and others may have or obtain patents or proprietary rights that could limit our ability to make, use, sell, offer for sale or import our drug candidates and future approved products or impair our competitive position. Numerous third-party U.S. and foreign issued patents and pending patent applications exist in the fields in which we are developing drug candidates. There may be third-party patents or patent applications with claims to compositions, formulations, methods of manufacture or methods for treatment related to the use or manufacture of our drug candidates. Any such patent application may have priority over our patent applications, which could further require us to obtain rights to issued patents covering such technologies. If another party has filed a U.S. patent application on inventions similar to ours, we may have to participate in an interference proceeding declared by the USPTO to determine priority of invention in the United States. The costs of these proceedings could be substantial, and it is possible that such efforts would be unsuccessful if, unbeknownst to us, the other party had independently arrived at the same or similar inventions prior to our own inventions, resulting in a loss of our U.S. patent position with respect to such inventions. Other countries have similar laws that permit secrecy of patent applications, and may be entitled to priority over our applications in such jurisdictions.

Some of our competitors may be able to sustain the costs of complex patent litigation more effectively than we can because they have substantially greater resources. In addition, any uncertainties resulting from the initiation and continuation of any litigation could have a material adverse effect on our ability to raise the funds necessary to continue our operations.

We may not identify relevant third-party patents or may incorrectly interpret the relevance, scope or expiration of a third-party patent, which might adversely affect our ability to develop and market our products.

As the biotechnology industry expands and more patents are issued, the risk increases that our drug candidates may be subject to claims of infringement of the patent rights of third parties. There can be no assurance that our operations do not, or will not in the future, infringe existing or future third-party patents. Identification of third-party patent rights that may be relevant to our operations is difficult because patent searching is imperfect due to differences in terminology among patents, incomplete databases and the difficulty in assessing the meaning of patent claims. We cannot guarantee that any of our patent searches or analyses, including the identification of relevant patents, the scope of patent claims or the expiration of relevant patents, are complete or thorough, nor can we be certain that we have identified each and every third-party patent and pending application in the United States and abroad that is relevant to or necessary for the commercialization of our drug candidates in any jurisdiction.

Numerous U.S. and foreign patents and pending patent applications exist in our market that are owned by third parties. Our competitors in both the United States and abroad, many of which have substantially greater resources and have made substantial investments in patent portfolios and competing technologies, may have applied for or obtained or may in the future apply for and obtain, patents that will prevent, limit or otherwise interfere with our ability to make, use and sell our products. We do not always conduct independent reviews of pending patent applications of and patents issued to third parties. Patent applications in the United States and elsewhere are typically published approximately 18 months after the earliest filing for which priority is claimed, with such earliest filing date being commonly referred to as the priority date. Certain U.S. applications that will not be filed outside the U.S. can remain confidential until patents issue. In addition, patent applications in the United States and elsewhere can be pending for many years before issuance, or unintentionally abandoned patents or applications can be revived. Furthermore, pending patent applications

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that have been published can, subject to certain limitations, be later amended in a manner that could cover our technologies, our products or the use of our products. As such, there may be applications of others now pending or recently revived patents of which we are unaware. These patent applications may later result in issued patents, or the revival of previously abandoned patents, that will prevent, limit or otherwise interfere with our ability to make, use or sell our products.

The scope of a patent claim is determined by an interpretation of the law, the written disclosure in a patent and the patent’s prosecution history. Our interpretation of the relevance or the scope of a patent or a pending application may be incorrect. For example, we may incorrectly determine that our products are not covered by a third-party patent or may incorrectly predict whether a third-party’s pending application will issue with claims of relevant scope. Our determination of the expiration date of any patent in the United States or abroad that we consider relevant may be incorrect. Our failure to identify and correctly interpret relevant patents may negatively impact our ability to develop and market our products.

We cannot provide any assurances that third-party patents do not exist which might be enforced against our current technology, including our research programs, drug candidates, their respective methods of use, manufacture and formulations thereof, and could result in either an injunction prohibiting our manufacture or future sales, or, with respect to our future sales, an obligation on our part to pay royalties and/or other forms of compensation to third parties, which could be significant.

Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.

Periodic maintenance fees, renewal fees, annuity fees and various other governmental fees on any issued patents and/or pending applications are due to be paid to the USPTO and various governmental patent agencies outside of the United States in several stages over the lifetime of the patents and/or applications. We have systems in place to remind us to pay these fees, and we employ an outside firm to pay these fees due to the USPTO and non-U.S. patent agencies. The USPTO and various non-U.S. governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process. We employ reputable law firms and other professionals to help us comply, and in many cases, an inadvertent lapse can be cured by payment of a late fee or by other means in accordance with the applicable rules. If we license intellectual property, we may have to rely upon our licensors to comply with these requirements and effect payment of these fees with respect to any patents and patent applications that we license. However, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. In such an event, our competitors might be able to enter the market and this circumstance would have a material adverse effect on our business.

We may be subject to claims that we have wrongfully hired an employee from a competitor or that we or our employees have wrongfully used or disclosed alleged confidential information or trade secrets of their former employers.

We may be subject to claims that our employees have wrongfully used or disclosed alleged trade secrets of their former employers. If we are not able to adequately prevent disclosure of trade secrets and other proprietary information, the value of our technology and drug candidate could be significantly diminished.

As is common in the biotechnology and pharmaceutical industries, we employ individuals who were previously employed at other biotechnology or pharmaceutical companies, including our competitors or potential competitors. We may be subject to claims that these employees, or we, have inadvertently or otherwise used or disclosed trade secrets or other proprietary information of their former employers. We may also be subject to claims that former employees, or other third parties have an ownership interest in our patents or other intellectual property. In addition, we may face claims by third parties that our agreements with employees, contractors or consultants obligating them to assign intellectual property to us are ineffective or in conflict with prior or competing contractual obligations of assignment, which could result in ownership disputes regarding intellectual property we have developed or will develop and interfere with our ability to capture the commercial value of such intellectual property. Litigation may be necessary to defend against these claims. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, which could adversely affect our business. Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to management.

If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed. Our reliance on third parties requires us to share our trade secrets, which increases the possibility that a competitor will discover them or that our trade secrets will be misappropriated or disclosed.

We rely on trade secrets to protect our proprietary technologies, especially where we do not believe patent protection is appropriate or obtainable. However, trade secrets are difficult to protect. We rely in part on confidentiality agreements with our

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employees, consultants, outside scientific collaborators, sponsored researchers and other advisors, and invention assignment agreements with employees, consultants and advisors, to protect our trade secrets and other proprietary information. In addition to contractual measures, we try to protect the confidential nature of our proprietary information using commonly accepted physical and technological security measures. Despite these efforts, we cannot provide any assurances that all such agreements have been duly executed, and these agreements may not effectively prevent disclosure of confidential information and may not provide an adequate remedy in the event of unauthorized disclosure of confidential information. In addition, others may independently discover our trade secrets and proprietary information. For example, the FDA, as part of its Transparency Initiative, is currently considering whether to make additional information publicly available on a routine basis, including information that we may consider to be trade secrets or other proprietary information, and it is not clear at the present time how the FDA’s disclosure policies may change in the future, if at all. Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain trade secret protection could adversely affect our competitive business position.

In addition, such security measures may not provide adequate protection for our proprietary information, for example, in the case of misappropriation of a trade secret by an employee, consultant, customer or third party with authorized access. Our security measures may not prevent an employee, consultant or customer from misappropriating our trade secrets and providing them to a competitor, and any recourse we take against such misconduct may not provide an adequate remedy to protect our interests fully. Monitoring unauthorized uses and disclosures is difficult, and we do not know whether the steps we have taken to protect our proprietary technologies will be effective. Unauthorized parties may also attempt to copy or reverse engineer certain aspects of our drug candidates that we consider proprietary. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret can be difficult, expensive and time-consuming, and the outcome is unpredictable. Even though we use commonly accepted security measures, the criteria for protection of trade secrets can vary among different jurisdictions.

Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and time- consuming, and the outcome is unpredictable. In addition, some courts inside and outside the United States are less willing or unwilling to protect trade secrets. Moreover, third parties may still obtain this information or may come upon this or similar information independently, and we would have no right to prevent them from using that technology or information to compete with us. Trade secrets could over time be disseminated within the industry through independent development, the publication of journal articles and the movement of personnel skilled in the art from company to company or academic to industry scientific positions.

Though our agreements with third parties typically restrict the ability of our advisors, employees, collaborators, licensors, suppliers, third-party contractors and consultants to publish data potentially relating to our trade secrets, our agreements may contain certain limited publication rights. If any of our trade secrets were to be lawfully obtained or independently developed by a competitor, we would have no right to prevent such competitor from using that technology or information to compete with us, which could harm our competitive position. Because from time to time we expect to rely on third parties in the development, manufacture, and distribution of our drug candidates and provision of our services, we must, at times, share trade secrets with them. Despite employing the contractual and other security precautions described above, the need to share trade secrets increases the risk that such trade secrets become known by our competitors, are inadvertently incorporated into the technology of others, or are disclosed or used in violation of these agreements. If any of these events occurs or if we otherwise lose protection for our trade secrets, the value of this information may be greatly reduced and our competitive position would be harmed.

In the future, we may need to obtain licenses of third-party technology that may not be available to us or are available only on commercially unreasonable terms, and which may cause us to operate our business in a more costly or otherwise adverse manner that was not anticipated.

From time to time we may be required to license technology from third parties to further develop or commercialize our drug candidates. Should we be required to obtain licenses to any third-party technology, including any such patents required to manufacture, use or sell our drug candidates, such licenses may not be available to us on commercially reasonable terms, or at all. The inability to obtain any third-party license required to develop or commercialize any of our drug candidates could cause us to abandon any related efforts, which could seriously harm our business and operations.

Where we obtain licenses from or collaborate with third parties, in some circumstances, we may not have the right to control the preparation, filing and prosecution of patent applications, or to maintain the patents, covering technology that we license from third parties, or such activities, if controlled by us, may require the input of such third parties. We may also require the cooperation of our licensors and collaborators to enforce any licensed patent rights, and such cooperation may not be provided. Therefore, these patents and applications may not be prosecuted and enforced in a manner consistent with the best interests of our business, in compliance with applicable laws and regulations, which may affect the validity and enforceability of such patents or any patents that may issue from such applications. Moreover, if we do obtain necessary licenses, we will likely have obligations under those licenses, including making royalty and milestone payments, and any failure to satisfy those obligations could give our licensor the right to terminate the license.

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Termination of a necessary license, or expiration of licensed patents or patent applications, could have a material adverse impact on our business. Our business would suffer if any such licenses terminate, if the licensors fail to abide by the terms of the license, if the licensors fail to enforce licensed patents against infringing third parties, if the licensed patents or other rights are found to be invalid or unenforceable, or if we are unable to enter into necessary licenses on acceptable terms. Furthermore, if any exclusive licenses terminate, or if the underlying patents fail to provide the intended exclusivity, competitors or other third parties may gain the freedom to seek regulatory approval of, and to market, drug candidates identical to ours. Moreover, our licensors may own or control intellectual property that has not been licensed to us and, as a result, we may be subject to claims, regardless of their merit, that we are infringing or otherwise violating the licensor’s rights. In addition, while we cannot currently determine the amount of the royalty obligations, we would be required to pay on sales of future drug candidates, if any, the amounts may be significant. The amount of our future royalty obligations will likely depend on the technology and intellectual property we use in drug candidates that we successfully develop and commercialize, if any. Therefore, even if we successfully develop and commercialize drug candidates, we may be unable to achieve or maintain profitability.

Intellectual property rights do not necessarily address all potential threats to our competitive advantage.

The degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations and may not adequately protect our business or permit us to maintain our competitive advantage. For example:

•others may be able to make drug candidates that are similar to ours but that are not covered by the claims of the patents that we own;

•we or future collaborators might not have been the first to make the inventions covered by the issued patent or pending patent application that we own or have exclusively licensed;

•we or future collaborators might not have been the first to file patent applications covering certain of our inventions;

•others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights;

•it is possible that our pending patent applications will not lead to issued patents;

•issued patents that we own or have exclusively licensed may be held invalid or unenforceable, as a result of legal challenges by our competitors;

•our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive drug candidates for sale in our major commercial markets;

•we cannot ensure that any of our patents, or any of our pending patent applications, if issued, or those of our licensors, will include claims having a scope sufficient to protect our drug candidates;

•we cannot ensure that any patents issued to us or our licensors will provide a basis for an exclusive market for our commercially viable drug candidates or will provide us with any competitive advantages;

•we cannot ensure that our commercial activities or drug candidates will not infringe upon the patents of others;

•we cannot ensure that we will be able to successfully commercialize our drug candidates on a substantial scale, if approved, before the relevant patents that we own or license expire;

•we may not develop additional proprietary technologies that are patentable; and

•the patents of others may have an adverse effect on our business, including if others obtain patents claiming subject matter similar to or improving that covered by our patents and patent applications;

Should any of these events occur, they would significantly harm our business, results of operations and prospects.

Because of the expense and uncertainty of litigation, we may not be in a position to enforce our intellectual property rights against third parties.

Because of the expense and uncertainty of litigation, we may conclude that even if a third party is infringing our issued patent, any patents that may be issued as a result of our pending or future patent applications or other intellectual property rights, the risk-adjusted cost of bringing and enforcing such a claim or action may be too high or not in the best interest of our company or our

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stockholders. Our competitors or other third parties may be able to sustain the costs of complex patent litigation or proceedings more effectively than we can because of their greater financial resources and more mature and developed intellectual property portfolios. In such cases, we may decide that the more prudent course of action is to simply monitor the situation or initiate or seek some other non-litigious action or solution. In addition, the uncertainties associated with litigation could compromise our ability to raise the funds necessary to continue our clinical trials, continue our internal research programs, in-license needed technology or other drug candidates, or enter into development partnerships that would help us bring our drug candidates to market. In such cases, we may decide that the more prudent course of action is to simply monitor the situation or initiate or seek some other non-litigious action or solution.

We may not be able to protect our intellectual property rights throughout the world.

Patents are of national or regional effect, and filing, prosecuting and defending patents on all of our drug candidates throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States can be less extensive than those in the United States. As such, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States, or from selling or importing drug candidates made using our inventions in and into the United States or other jurisdictions. Further, the legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents and other intellectual property protection, particularly those relating to pharmaceuticals, which could make it difficult for us to stop the infringement of our patents or marketing of competing drug candidates in violation of our proprietary rights generally. In addition, certain developing countries, including China and India, have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. In addition, some countries limit the enforceability of patents against third parties, including government agencies or government contractors. In these countries, patents may provide limited or no benefit, and in those countries, we and our licensors and licensees may have limited remedies if patents are infringed or if we or our licensors or licensees are compelled to grant a license to a third party, which could diminish the value of those patents. This could limit our potential revenue opportunities. Further, competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own drug candidates and, further, may export otherwise infringing drug candidates to territories where we have patent protection but where enforcement is not as strong as that in the United States. These drug candidates may compete with our drug candidates, and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing. Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.

In Europe, beginning June 1, 2023, European applications and patent may be subjected to the jurisdiction of the Unified Patent Court (the "UPC"). Also, European applications will have the option, upon grant of a patent, of becoming a Unitary Patent which will be subject to the jurisdiction of the UPC. This will be a significant change in European patent practice. As the UPC is a new court system, there is no precedent for the court, increasing the uncertainty. As a single court system can invalidate a European patent, we, where applicable may opt out of the UPC and as such, each European patent would need to be challenged in each individual country.

Geo-political actions in the United States and in foreign countries could increase the uncertainties and costs surrounding the prosecution or maintenance of our patent applications or those of any current or future licensors and the maintenance, enforcement or defense of our issued patents or those of any current or future licensors.

Changes in patent law in the United States and other jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our drug candidates.

As is the case with other biotechnology companies, our success is heavily dependent on intellectual property, particularly patents. Our patent rights may be affected by developments or uncertainty in U.S. or non-U.S. patent statutes, patent case laws in USPTO rules and regulations or in the rules and regulations of non-U.S. patent offices.

Obtaining and enforcing patents in the pharmaceutical industry involves both technological and legal complexity and is therefore costly, time consuming and inherently uncertain. Changes in either the patent laws or interpretation of the patent laws in the United States could increase the uncertainties and costs. Recent patent reform legislation in the United States and other countries, including the AIA, signed into law on September 16, 2011, could increase those uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents.

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The AIA includes a number of significant changes to U.S. patent law. These include provisions that affect the way patent applications are prosecuted, redefine prior art and provide more efficient and cost-effective avenues for competitors to challenge the validity of patents. These include allowing third-party submission of prior art to the USPTO during patent prosecution and additional procedures to attack the validity of a patent by USPTO administered post-grant proceedings, including post-grant review, inter parties review, and derivation proceedings. After March 2013, under the AIA, the United States transitioned to a first inventor to file system in which, assuming that the other statutory requirements are met, the first inventor to file a patent application will be entitled to the patent on an invention regardless of whether a third party was the first to invent the claimed invention. However, the AIA and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could have a material adverse effect on our business, financial condition, results of operations and prospects. In addition, Congress may pass patent reform legislation that is unfavorable to us.

The U.S. Supreme Court has ruled on several patent cases in recent years, narrowing the scope of patent protection available in certain circumstances and weakening the rights of patent owners in certain situations. Depending on future actions by the U.S. Congress, the U.S. courts, the USPTO and the relevant law-making bodies in other countries, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce our existing patents and patents that we might obtain in the future.

We may become subject to claims challenging the inventorship or ownership of our patents and other intellectual property.

We may be subject to claims that former employees, collaborators or other third parties have an interest in our patents, trade secrets or other intellectual property as an inventor or co-inventor. The failure to name the proper inventors on a patent application can result in the patents issuing thereon being unenforceable. Inventorship disputes may arise from conflicting views regarding the contributions of different individuals named as inventors, the effects of foreign laws where foreign nationals are involved in the development of the subject matter of the patent, conflicting obligations of third parties involved in developing our drug candidates or as a result of questions regarding co-ownership of potential joint inventions. Litigation may be necessary to resolve these and other claims challenging inventorship and/or ownership. Alternatively, or additionally, we may enter into agreements to clarify the scope of our rights in such intellectual property. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, valuable intellectual property. Such an outcome could have a material adverse effect on our business. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees.

Our licensors may have relied on third-party consultants or collaborators or on funds from third parties, such as the U.S. government, such that our licensors are not the sole and exclusive owners of the patents we in-licensed. If other third parties have ownership rights or other rights to our in-licensed patents, they may be able to license such patents to our competitors, and our competitors could market competing products and technology. This could have a material adverse effect on our competitive position, business, financial conditions, results of operations, and prospects.

In addition, we may be unsuccessful in executing agreements assigning such intellectual property to us with each party who, in fact, conceives or develops intellectual property that we regard as our own. The assignment of intellectual property rights may not be self-executing, or the assignment agreements may be breached, and we may be forced to bring claims against third parties, or defend claims that they may bring against us, to determine the ownership of what we regard as our intellectual property. Such claims could have a material adverse effect on our business, financial condition, results of operations, and prospects.

Patent terms may be inadequate to protect our competitive position on our drug candidates for an adequate amount of time, and if we do not obtain patent term extension for our drug candidates, our business may be materially harmed.

Patent rights are of limited duration. In the United States, the natural expiration of a patent is generally 20 years after its first effective non-provisional filing date. In addition, although upon issuance a U.S. patent’s life can be increased based on certain delays caused by the USPTO, this increase can be reduced or eliminated based on certain delays caused by the patent applicant during patent prosecution. Given the amount of time required for the development, testing and regulatory review of new drug candidates, patents protecting such candidates might expire before or shortly after such drug candidates are commercialized. Even if patents covering our drug candidates are obtained, once the patent life has expired for a drug candidate, we may be open to competition from generic products. A patent term extension of up to five years based on regulatory delay may be available in the United States under the Hatch- Waxman Act. However, only a single patent can be extended for each marketing approval, and any patent can be extended only once, for a single drug candidate. Moreover, the scope of protection during the period of the patent term extension does not extend to the full scope of the claim, but instead only to the scope of the drug candidate as approved. Further, a patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of drug candidate approval and only those claims covering such approved drug candidate, a method for using it or a method for manufacturing it may be extended. Laws governing analogous patent term extensions in foreign jurisdictions vary widely, as do laws governing the ability to obtain multiple patents from a single patent

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family. Additionally, we may not receive an extension if we fail to apply within applicable deadlines, fail to apply prior to expiration of relevant patents or otherwise fail to satisfy applicable requirements. Moreover, the applicable time period or the scope of patent protection afforded could be less than we request. If we are unable to obtain patent term extension or restoration, or the term of any such extension is less than we request, the period during which we will have the right to exclusively market our drug candidate will be shortened and our competitors may obtain approval of competing drug candidates following our patent expiration, and our revenue could be reduced.

If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected.

Our current or future trademarks or trade names may be challenged, infringed, circumvented or declared generic or determined to be infringing on other marks. We may not be able to protect our rights to these trademarks and trade names, which we need to build name recognition among potential partners or customers in our markets of interest. At times, competitors may adopt trade names or trademarks similar to ours, thereby impeding our ability to build brand identity and possibly leading to market confusion. In addition, there could be potential trade name or trademark infringement claims brought by owners of other trademarks or trademarks that incorporate variations of our registered or unregistered trademarks or trade names. Over the long term, if we are unable to establish name recognition based on our trademarks and trade names, then we may not be able to compete effectively and our business may be adversely affected. We may license our trademarks and trade names to third parties, such as distributors. Though these license agreements may provide guidelines for how our trademarks and trade names may be used, a breach of these agreements or misuse of our trademarks and trade names by our licensees may jeopardize our rights in or diminish the goodwill associated with our trademarks and trade names. Our efforts to enforce or protect our proprietary rights related to trademarks, trade names, trade secrets, domain names, copyrights or other intellectual property may be ineffective and could result in substantial costs and diversion of resources and could adversely affect our financial condition or results of operations.

Moreover, any name we have proposed to use with our drug candidate in the United States must be approved by the FDA, regardless of whether we have registered it, or applied to register it, as a trademark. Similar requirements exist in Europe. The FDA typically conducts a review of proposed drug candidate names, including an evaluation of potential for confusion with other drug candidate names. If the FDA (or an equivalent administrative body in a foreign jurisdiction) objects to any of our proposed proprietary drug candidate names, we may be required to expend significant additional resources in an effort to identify a suitable substitute name that would qualify under applicable trademark laws, not infringe the existing rights of third parties and be acceptable to the FDA. Furthermore, in many countries, owning and maintaining a trademark registration may not provide an adequate defense against a subsequent infringement claim asserted by the owner of a senior trademark. At times, competitors or other third parties may adopt trade names or trademarks similar to ours, thereby impeding our ability to build brand identity and possibly leading to market confusion. In addition, there could be potential trade name or trademark infringement claims brought by owners of other registered trademarks or trademarks that incorporate variations of our registered or unregistered trademarks or trade names. If we assert trademark infringement claims, a court may determine that the marks we have asserted are invalid or unenforceable, or that the party against whom we have asserted trademark infringement has superior rights to the marks in question. In this case, we could ultimately be forced to cease use of such trademarks.

We cannot ensure that patent rights relating to inventions described and claimed in our pending patent applications will issue or that patents based on our patent applications will not be challenged and rendered invalid and/or unenforceable.

The patent application process is subject to numerous risks and uncertainties, and there can be no assurance that we or any of our potential future collaborators will be successful in protecting our drug candidates by obtaining and defending patents. We have pending U.S. and foreign patent applications in our portfolio; however, we cannot predict:

•if and when patents may issue based on our patent applications;

•the scope of protection of any patent issuing based on our patent applications;

•whether the claims of any patent issuing based on our patent applications will provide protection against competitors;

•whether or not third parties will find ways to invalidate or circumvent our patent rights;

•whether or not others will obtain patents claiming aspects similar to those covered by our patents and patent applications;

•whether we will need to initiate litigation or administrative proceedings to enforce and/or defend our patent rights which will be costly whether we win or lose;

•whether the patent applications that we own or in-license will result in issued patents with claims that cover our drug candidates or uses thereof in the United States or in other foreign countries; and/or

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•whether we may experience patent office interruption or delays to our ability to timely secure patent coverage to our drug candidates.

We cannot be certain that the claims in our pending patent applications directed to our drug candidates and/or technologies will be considered patentable by the USPTO or by patent offices in foreign countries. There can be no assurance that any such patent applications will issue as granted patents. One aspect of the determination of patentability of our inventions depends on the scope and content of the “prior art,” information that was or is deemed available to a person of skill in the relevant art prior to the priority date of the claimed invention. There may be prior art of which we are not aware that may affect the patentability of our patent claims or, if issued, affect the validity or enforceability of a patent claim. Even if the patents do issue based on our patent applications, third parties may challenge the validity, enforceability or scope thereof, which may result in such patents being narrowed, invalidated or held unenforceable. Furthermore, even if they are unchallenged, patents in our portfolio may not adequately exclude third parties from practicing relevant technology or prevent others from designing around our claims. If the breadth or strength of our intellectual property position with respect to our drug candidates is threatened, it could dissuade companies from collaborating with us to develop and threaten our ability to commercialize our drug candidates. In the event of litigation or administrative proceedings, we cannot be certain that the claims in any of our issued patents will be considered valid by courts in the United States or foreign countries.

We may not be successful in obtaining or maintaining necessary rights to our drug candidates through acquisitions and in-licenses.

Because our development programs may in the future require the use of proprietary rights held by third parties, the growth of our business may depend in part on our ability to acquire, in-license, or use these third-party proprietary rights. We may be unable to acquire or in-license any compositions, methods of use, processes or other third-party intellectual property rights from third parties that we identify as necessary for our drug candidates. The licensing and acquisition of third-party intellectual property rights is a competitive area, and a number of more established companies may pursue strategies to license or acquire third-party intellectual property rights that we may consider attractive or necessary. These established companies may have a competitive advantage over us due to their size, capital resources and greater clinical development and commercialization capabilities. In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us. We also may be unable to license or acquire third-party intellectual property rights on terms that would allow us to make an appropriate return on our investment or at all. If we are unable to successfully obtain rights to required third-party intellectual property rights or maintain the existing intellectual property rights we have, we may have to abandon development of the relevant program or drug candidate, which could have a material adverse effect on our business, financial condition, results of operations, and prospects.

While we normally seek to obtain the right to control prosecution, maintenance and enforcement of the patents relating to our drug candidates, there may be times when the filing and prosecution activities for patents and patent applications relating to our drug candidates are controlled by our future licensors or collaboration partners. If any of our future licensors or collaboration partners fail to prosecute, maintain and enforce such patents and patent applications in a manner consistent with the best interests of our business, including by payment of all applicable fees for patents covering our drug candidates, we could lose our rights to the intellectual property or our exclusivity with respect to those rights, our ability to develop and commercialize those drug candidates may be adversely affected and we may not be able to prevent competitors from making, using and selling competing products. In addition, even where we have the right to control patent prosecution of patents and patent applications we have licensed to and from third parties, we may still be adversely affected or prejudiced by actions or inactions of our licensees, our future licensors and their counsel that took place prior to the date upon which we assumed control over patent prosecution.

We may enter into license agreements in the future with others to advance our existing or future research or allow commercialization of our existing or future drug candidates. These licenses may not provide exclusive rights to use such intellectual property and technology in all relevant fields of use and in all territories in which we may wish to develop or commercialize our technology and products in the future.

In addition, subject to the terms of any such license agreements, we may not have the right to control the preparation, filing, prosecution, maintenance, enforcement, and defense of patents and patent applications covering the technology that we license from third parties. In such an event, we cannot be certain that these patents and patent applications will be prepared, filed, prosecuted, maintained, enforced, and defended in a manner consistent with the best interests of our business. If our future licensors fail to prosecute, maintain, enforce, and defend such patents or patent applications, or lose rights to those patents or patent applications, the rights we have licensed may be reduced or eliminated, and our right to develop and commercialize any of our future drug candidates that are subject of such licensed rights could be adversely affected.

Our future licensors may rely on third-party consultants or collaborators or on funds from third parties such that our future licensors are not the sole and exclusive owners of the patents we in-license. If other third parties have ownership rights to our future in-licensed patents, they may be able to license such patents to our competitors, and our competitors could market competing products

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and technology. This could have a material adverse effect on our competitive position, business, financial conditions, results of operations, and prospects.

It is possible that we may be unable to obtain licenses at a reasonable cost or on reasonable terms, if at all. Even if we are able to obtain a license, it may be non-exclusive, thereby giving our competitors access to the same technologies licensed to us. In that event, we may be required to expend significant time and resources to redesign our technology, drug candidates, or the methods for manufacturing them or to develop or license replacement technology, all of which may not be feasible on a technical or commercial basis. If we are unable to do so, we may be unable to develop or commercialize the affected drug candidates, which could harm our business, financial condition, results of operations, and prospects significantly. We cannot provide any assurances that third-party patents do not exist which might be enforced against our current technology, manufacturing methods, drug candidates, or future methods or products resulting in either an injunction prohibiting our manufacture or future sales, or, with respect to our future sales, an obligation on our part to pay royalties and/or other forms of compensation to third parties, which could be significant.

Disputes may arise between us and our future licensors regarding intellectual property subject to a license agreement, including:

•the scope of rights granted under the license agreement and other interpretation-related issues;

•whether and the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement;

•our right to sublicense patents and other rights to third parties;

•our diligence obligations under the license agreement and what activities satisfy those diligence obligations;

•our right to transfer or assign the license;

•the inventorship and ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our future licensors and us and our partners; and

•the priority of invention of patented technology.

In addition, the agreements under which we license intellectual property or technology from third parties are complex, and certain provisions in such agreements may be susceptible to multiple interpretations. The resolution of any contract interpretation disagreement that may arise could narrow what we believe to be the scope of our rights to the relevant intellectual property or technology, or increase what we believe to be our financial or other obligations under the relevant agreement, either of which could have a material adverse effect on our business, financial condition, results of operations, and prospects. Moreover, if disputes over intellectual property that we license in the future prevent or impair our ability to maintain our licensing arrangements on commercially acceptable terms, we may be unable to successfully develop and commercialize the affected drug candidates, which could have a material adverse effect on our business, financial conditions, results of operations, and prospects.

In spite of our best efforts, our future licensors might conclude that we materially breached our license agreements and might therefore terminate the license agreements, thereby removing our ability to develop and commercialize products and technology covered by these license agreements. If these in-licenses are terminated, or if the underlying patents fail to provide the intended exclusivity, competitors would have the freedom to seek regulatory approval of, and to market, products identical to ours. This could have a material adverse effect on our competitive position, business, financial conditions, results of operations, and prospects.

From time to time, we may be required to license technologies relating to our therapeutic research programs from additional third parties to further develop or commercialize our drug candidates. Should we be required to obtain licenses to any third-party technology, including any such patents required to manufacture, use or sell our drug candidates, such licenses may not be available to us on commercially reasonable terms, or at all. The inability to obtain any third-party license required to develop or commercialize any of our drug candidates could cause us to abandon any related efforts, which could seriously harm our business and operations.

Any future collaborations that we enter into may not be successful. The success of our collaboration arrangements will depend heavily on the efforts and activities of our collaborators. Collaborations are subject to numerous risks, which may include that:

•collaborators have significant discretion in determining the efforts and resources that they will apply to collaborations;

•collaborators may not pursue development and commercialization of our products or may elect not to continue or renew development or commercialization programs based on trial or test results, changes in their strategic focus due to the acquisition of competitive products, availability of funding or other external factors, such as a business combination that diverts resources or creates competing priorities;

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•collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products or drug candidates;

•a collaborator with marketing, manufacturing and distribution rights to one or more products may not commit sufficient resources to or otherwise not perform satisfactorily in carrying out these activities;

•we could grant exclusive rights to our collaborators that would prevent us from collaborating with others;

•collaborators may not properly maintain or defend our intellectual property rights or may use our intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential liability;

•disputes may arise between us and a collaborator that causes the delay or termination of the research, development or commercialization of our future drug candidates or that results in costly litigation or arbitration that diverts management attention and resources;

•collaborations may be terminated, and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable current and future drug candidates;

•collaborators may own or co-own intellectual property covering our products that results from our collaborating with them, and in such cases, we would not have the exclusive right to develop or commercialize such intellectual property; and

•a collaborator’s sales and marketing activities or other operations may not be in compliance with applicable laws resulting in civil or criminal proceedings.

We may encounter difficulties in managing our growth and expanding our operations successfully.

As we seek to advance our product candidates through clinical trials and, if approved, through commercialization, we will need to expand our development, regulatory, quality assurance, manufacturing, commercialization, compliance, and administration capabilities or contract with third parties to provide these capabilities for us. As our operations expand, we expect that we will need to increase the responsibilities on members of management and manage any future growth effectively. Our failure to effectively manage our growth in this regard could prevent us from successfully implementing our strategy and maintaining the confidence of investors in our company.

Our stockholders may realize little or no value from the divestiture of our legacy assets, and as a result our stock price may decline, we could be subject to litigation, and our business may be adversely affected.

We have sold our legacy small molecule protease inhibitor portfolio to Lighthouse, which is a newly organized, private development stage company in the start-up phase, and has only recently commenced its operations. There is currently no existing public market for the shares of Lighthouse's common stock, and there can be no assurance that an active public market will ever develop. The absence of an active public market for these securities would make it difficult for us to sell the shares of Lighthouse's common stock and realize any value from them. To date, Lighthouse’s operations have been primarily limited to organizing and staffing its company and completing the acquisition of our legacy assets. Accordingly, it is difficult if not impossible to predict Lighthouse’s future performance or to evaluate its business and prospects, or ability to develop our legacy assets. For these and other reasons, our stockholders may realize little or no value from the divestiture of our legacy assets.

The divestiture of our legacy assets or previously announced change in our corporate strategy, including the termination of the license for NOV004, could result in litigation against us, including litigation arising from or related to the value, received in the sale of our legacy assets to Lighthouse. For example, some of our investors purchased shares of our common stock because they were interested in the opportunities presented by our small molecule protease inhibitor portfolio, others because they were interested in our bone-targeting drug platform. Thus, certain stockholders may have attributed substantial financial value to our legacy assets or NOV004. If our stockholders believe that the financial value which is or may be received by us or them from the divestiture of our assets is inadequate, our stock price may decline and litigation may occur. As a result of these and other factors, we may be exposed to a number of risks, including declines or fluctuations in our stock price, additional legal fees, and distractions to our management caused by activities undertaken in connection with resolving any disputes related to these transactions. The occurrence of any one or more of the above could have an adverse impact on our business and financial condition.

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Risks Relating to Owning Our Common Stock

The market price of our common stock is likely to be volatile and could fluctuate or decline, resulting in a substantial loss of your investment.

The market price of our common stock has been and may continue to be volatile and could be subject to wide fluctuations in response to many risk factors listed in this section, and others beyond our control, including:

•our integration efforts related to our acquisition of EryDel;

•changes in our business strategy;

•timing and results of clinical trials;

•our ability to identify partnership and licensing opportunities to support the future development of EryDex;

•market opportunity for A-T and future indications;

•any delays in manufacturing of drug supplies, results of preclinical studies and clinical trials for drug candidates;

•regulatory actions with respect to our drug candidates or our competitors’ drug candidates;

•actual or anticipated fluctuations in our financial condition and operating results, including fluctuations in our quarterly and annual results;

•announcement of actual or anticipated reduction in force, including our recent reduction in force;

•announcements of technological innovations by us or our competitors;

•overall conditions in our industry and the markets in which we operate;

•addition or loss of significant customers, or other developments with respect to significant customers;

•changes in laws or regulations applicable to our drug candidates;

•actual or anticipated changes in our growth rate relative to our competitors;

•announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments;

•additions or departures of key personnel;

•competition from existing drug candidates or new drug candidates that may emerge;

•issuance of new or updated research or reports by securities analysts;

•cash runway expectations;

•fluctuations in the valuation of companies perceived by investors to be comparable to us;

•disputes or other developments related to proprietary rights, including patents, litigation matters, and our ability to obtain intellectual property protection for our technologies;

•announcement or expectation of additional financing efforts;

•sales of our common stock by us or our stockholders;

•share price and volume fluctuations attributable to inconsistent trading volume levels of our shares;

•market conditions for pharmaceutical stocks in general;

•the expiration of contractual lock-up agreements with our executive officers, directors and stockholders;

•general economic and market conditions; and

•ineffectiveness of our disclosure controls or internal controls.

Furthermore, the stock markets have experienced price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. These fluctuations often have been unrelated or disproportionate to the operating performance of those companies. These broad market and industry fluctuations, as well as general economic, political and

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market conditions such as recessions, interest rate changes or international currency fluctuations, may negatively impact the market price of our common stock. In the past, stockholders have instituted securities class action litigation following periods of market volatility. If we were to become involved in securities litigation, it could subject us to substantial costs and divert our management’s attention from other business concerns, which could seriously harm our business.

We may be subject to securities class action and stockholder derivative actions. These, and potential similar or related litigation, could result in substantial damages and may divert management’s time and attention from our business and adversely impact our business, results of operations and financial condition.

We may become the target of securities class actions or stockholder derivative claims. Securities-related class action litigation has often been brought against companies, including many biotechnology companies, which experience volatility in the market price of their securities. This risk is especially relevant for us because biotechnology companies often experience significant stock price volatility in connection with their product development programs. Any preclinical or clinical trial results that the investors may deem as unfavorable, volatility in our stock price and other matters affecting our business and operations may subject us to actual and threatened securities class actions or stockholder derivative claims. In addition, we may be exposed to increased litigation from stockholders, customers, suppliers, consumers and other third parties due to the combination of EryDel's and Novosteo’s business and ours following the EryDel and Novosteo Acquisitions, out-licensing of our legacy assets and NOV004. These types of proceedings may result in substantial costs, divert management’s attention from other business concerns and adversely impact our business, results of operations and financial condition.

Future sales of our common stock in the public market could cause our share price to fall.

Sales of a substantial number of shares of our common stock in the public market, or the perception that these sales might occur, could depress the market price of our common stock and could impair our ability to raise capital through the sale of additional equity securities. Certain holders of our common stock have rights, subject to conditions, to require us to file registration statements covering their shares or to include their shares in Securities Act registration statements that we may file for ourselves or other stockholders. Once we register these shares, they can be freely sold in the public market. Moreover, we have also registered under the Securities Act shares of common stock that we may issue under our equity compensation plans.

In addition, the issuance of shares under awards granted under existing or future employee equity benefit plans may cause immediate and substantial dilution to our existing stockholders. In the future, we may issue additional shares of common stock or other equity or debt securities convertible into common stock in connection with a financing, acquisition, litigation settlement, employee arrangements or otherwise. Any such issuance could result in substantial dilution to our existing stockholders and could cause our stock price to decline.

We have in the past and may in the future fail to continue to meet the listing standards of Nasdaq, and as a result our common stock may be delisted, which could have a material adverse effect on the liquidity of our common stock.

Our common stock currently trades on the Nasdaq. The Nasdaq has requirements that a company must meet in order to remain listed on Nasdaq. For example, Nasdaq rules require us to maintain a minimum closing bid price of $1.00 per share of our common stock.

On December 4, 2023, we received a letter from the Listing Qualifications Staff, or the “Nasdaq Staff” of Nasdaq notifying us that for the last 30 consecutive business days, the bid price of our common stock had closed below $1.00 per share, the minimum closing bid price required by the continued listing requirements of Nasdaq Listing Rule 5450(a)(1). The notification received had no immediate effect on the listing of our common stock on the Nasdaq. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we had 180 calendar days to regain compliance with the minimum bid price requirement by having shares of our common stock maintain a minimum closing bid price of at least $1.00 per share for a minimum of 10 consecutive trading days. On December 29, 2023, we received a letter from the Nasdaq Staff notifying us that the closing bid price of our common stock had been at $1.00 per share or greater for 10 consecutive business days, from December 11, 2023 to December 28, 2023, and accordingly, we had regained compliance with Nasdaq Listing Rule 5450(a)(1). There can be no assurance that we will continue to meet the minimum bid price requirement, or any other Nasdaq requirements, in the future.

In addition, we may be unable to meet other applicable Nasdaq listing requirements, including maintaining minimum levels of stockholders’ equity or market values of our common stock, in which case our common stock could be delisted. If our common stock were to be delisted, the liquidity of our common stock would be adversely affected, and the market price of our common stock could decrease.

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We have never paid dividends on our common stock and we do not intend to pay dividends for the foreseeable future. Consequently, any gains from an investment in our common stock will likely depend on whether the price of our common stock increases.

We have never declared or paid any dividends on our common stock and do not intend to pay any dividends in the foreseeable future. We anticipate that we will retain all of our future earnings for use in the operation of our business and for general corporate purposes. Any determination to pay dividends in the future will be at the discretion of our board of directors. Accordingly, investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investments.

General Risk Factors

Our charter documents and Delaware law could prevent a takeover that stockholders consider favorable and could also reduce the market price of our stock.

Our amended and restated certificate of incorporation and our amended and restated bylaws contain provisions that could delay or prevent a change in control of our company. These provisions could also make it more difficult for stockholders to elect directors and take other corporate actions. These provisions include:

•providing for a classified board of directors with staggered, three-year terms;

•authorizing our board of directors to issue preferred stock with voting or other rights or preferences that could discourage a takeover attempt or delay changes in control;

•prohibiting cumulative voting in the election of directors;

•providing that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum;

•prohibiting the adoption, amendment or repeal of our amended and restated bylaws or the repeal of the provisions of our amended and restated certificate of incorporation regarding the election and removal of directors without the required approval of at least 66.67% of the shares entitled to vote at an election of directors;

•prohibiting stockholder action by written consent;

•limiting the persons who may call special meetings of stockholders; and

•requiring advance notification of stockholder nominations and proposals.

These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management. In addition, the provisions of Section 203 of the Delaware General Corporate Law, or the DGCL, govern us. These provisions may prohibit large stockholders, in particular those owning 15% or more of our outstanding voting stock, from merging or combining with us for a certain period of time without the consent of our board of directors.

In addition, in April 2023, we implemented the Rights Agreement, also called a “poison pill,” that may have the effect of discouraging or preventing a change of control by, among other things, making it uneconomical for a third party to gain control of us through open market accumulation of shares without paying all stockholders an appropriate control premium or without the consent of our board of directors. The Rights will expire on April 5, 2024, unless the Rights are earlier redeemed or exchanged by the Company.

These and other provisions in our amended and restated certificate of incorporation and our amended and restated bylaws and under Delaware law could discourage potential takeover attempts, reduce the price investors might be willing to pay in the future for shares of our common stock and result in the market price of our common stock being lower than it would be without these provisions.

Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware is the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ abilities to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

Our amended and restated certificate of incorporation provides that, unless we consent to the selection of an alternative forum, to the fullest extent permitted by law, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for:

•any derivative action or proceeding brought on our behalf;

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•any action asserting a claim of breach of a fiduciary duty owed by, or other wrongdoing by, any of our directors, officers, employees or agents or our stockholders;

•any action asserting a claim against us arising under the DGCL, our amended and restated certificate of incorporation, or our amended and restated bylaws; and

•any action asserting a claim against us that is governed by the internal-affairs doctrine;

provided that, the exclusive forum provision will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction; and provided further that, if and only if the Court of Chancery of the State of Delaware dismisses any such action for lack of subject matter jurisdiction, such action may be brought in another state or federal court sitting in the State of Delaware. Our amended and restated certificate of incorporation also provides that the federal district courts of the United States of America will be the exclusive forum for the resolution of any complaint asserting a cause of action against us or any of our directors, officers, employees or agents and arising under the Securities Act.

We believe these provisions may benefit us by providing increased consistency in the application of Delaware law and federal securities laws by chancellors and judges, as applicable, particularly experienced in resolving corporate disputes, efficient administration of cases on a more expedited schedule relative to other forums and protection against the burdens of multi-forum litigation. However, these provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees. While the Delaware Supreme Court recently determined that such choice of forum provisions are facially valid, a stockholder may nevertheless seek to bring such a claim arising under the Securities Act against us, our directors, officers, or other employees in a venue other than in the federal district courts of the United States of America. In such instance, we would expect to vigorously assert the validity and enforceability of the exclusive forum provisions of our amended and restated certificate of incorporation, and this may require significant additional costs associated with resolving such action in other jurisdictions.

Claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against us and may reduce the amount of money available to us.

Our amended and restated certificate of incorporation and amended and restated bylaws provide that we will indemnify our directors and officers, in each case to the fullest extent permitted by Delaware law.

In addition, as permitted by Section 145 of the DGCL, our amended and restated bylaws and our indemnification agreements that we have entered into with our directors and officers provide that:

•we will indemnify our directors and officers for serving us in those capacities or for serving other business enterprises at our request, to the fullest extent permitted by Delaware law. Delaware law provides that a corporation may indemnify such person if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the registrant and, with respect to any criminal proceeding, had no reasonable cause to believe such person’s conduct was unlawful;

•we may, in our discretion, indemnify employees and agents in those circumstances where indemnification is permitted by applicable law;

•we are required to advance expenses, as incurred, to our directors and officers in connection with defending a proceeding, except that such directors or officers shall undertake to repay such advances if it is ultimately determined that such person is not entitled to indemnification;

•we will not be obligated pursuant to our amended and restated bylaws to indemnify a person with respect to proceedings initiated by that person against us or our other indemnitees, except with respect to proceedings authorized by our board of directors or brought to enforce a right to indemnification;

•the rights conferred in our amended and restated bylaws are not exclusive, and we are authorized to enter into indemnification agreements with our directors, officers, employees and agents and to obtain insurance to indemnify such persons; and

•we may not retroactively amend our amended and restated bylaw provisions to reduce our indemnification obligations to directors, officers, employees and agents.

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Our internal computer systems, or those used by our third-party research institution collaborators, CROs or other contractors or consultants, may fail or suffer security breaches, which could result in adverse consequences including, but not limited to, regulatory investigations or actions, litigation, fines/penalties, disruptions of our business operations, reputational harm, and loss of revenue or profits.

In the ordinary course of our business, we and the third parties upon which we rely process sensitive data, and, as a result, we and the third parties upon which we rely face a variety of evolving threats that could cause security incidents. Such threats are prevalent and continue to rise, are increasingly difficult to detect, and come from a variety of sources, including traditional computer “hackers,” “hacktivists,” individual threat actors, organized criminal threat actors, personnel (such as through theft or misuse), sophisticated nation states, and nation-state-supported actors.

Despite the implementation of security measures designed to detect and mitigate vulnerabilities, our internal computer systems and those of our CROs and other contractors and consultants may be vulnerable to damage from sources including, but not limited to, malicious code (e.g., computer viruses), malware, ransomware attacks, software or hardware failures, telecommunications failures, and unauthorized access (including as a result of personnel misconduct or error). In particular, severe ransomware attacks are becoming increasingly prevalent and can lead to significant interruptions in our operations, ability to provide our products or services, loss of sensitive data and income, reputational harm, and diversion of funds. Additionally, remote work has become more common and has increased risks to our information technology systems and data, as more of our employees utilize network connections, computers, and devices outside our premises or network.

Although to our knowledge we have not experienced any such material system failure or security breach to date, if such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our development programs and our business operations, as well as adverse consequences including, but not limited to, investigations, fines/penalties, litigation, and reputational harm. For example, the loss of clinical trial data from completed, ongoing or future clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. Likewise, we rely on our third-party research institution collaborators for research and development of our drug candidates and other third parties for the manufacture of our drug candidates and to conduct clinical trials, and similar events relating to their computer systems could also have a material adverse effect on our business. Our reliance on third-party service providers could also introduce new cyber security risks and vulnerabilities, such as supply-chain attacks. To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or systems, or inappropriate disclosure of confidential or proprietary information, we could incur liability and the further development and commercialization of our drug candidates could be delayed. We cannot be sure that our insurance coverage will be adequate or sufficient to protect us from or to mitigate liabilities arising out of our privacy and security practices, that such coverage will continue to be available on commercially reasonable terms or at all, or that such coverage will pay future claims.

Our ability to utilize our federal net operating loss and tax credit carryforwards may be limited.

Our net operating loss, or NOL, carryforwards could expire unused and be unavailable to offset future income tax liabilities because of their limited duration or because of restrictions under U.S. tax law. NOLs generated in tax years ending on or prior to December 31, 2017 are only permitted to be carried forward for 20 taxable years under applicable U.S. federal tax law. Moreover, under the Tax Act as modified by the CARES Act, federal NOLs generated in tax years beginning after December 31, 2017 may be carried forward indefinitely, but the deductibility of such federal NOLs may be limited to 80% of taxable income for tax years beginning January 1, 2018.

Under Sections 382 and 383 of the Internal Revenue Code, limitations on a corporation’s ability to use its NOLs and tax credit carryforwards apply if a corporation undergoes an “ownership change,” which is generally defined as a greater than 50 percentage point change (by value) in its equity ownership by certain stockholders over a three-year period. If we have experienced an ownership change at any time since our incorporation, we may already be subject to limitations on our ability to utilize our existing NOL carryforwards and other tax attributes to offset taxable income or tax liability. In addition, future changes in our stock ownership, which may be outside of our control, may trigger an ownership change. Similar provisions of state tax law may also apply to limit our use of accumulated state tax attributes. As a result, even if we earn net taxable income in the future, our ability to use our pre-change NOL carryforwards and other tax attributes to offset such taxable income or tax liability may be subject to limitations, which could potentially result in increased future income tax liability to us.

Item 1B. Unresolved Staff Comments.

None

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Item 1C. Cybersecurity.

Our board of directors addresses the Company’s cybersecurity risk management as part of its general oversight function. The board of directors’ Audit Committee is responsible for overseeing Company’s our risk management processes, including oversight and mitigation of risks from cybersecurity threats. Management is responsible for the day-to-day administration of our risk management program and our cybersecurity policies, processes, and practices.

Cybersecurity Risk Management and Strategy

We have implemented and maintain various information security processes designed to identify, assess and manage material risks from cybersecurity threats to our critical computer networks, third party hosted services, communications systems, hardware and software, and our critical data (including intellectual property, confidential information that is proprietary, strategic or competitive in nature (collectively, “Information Systems and Data”).

We have implemented a cross-functional approach to assessing, identifying and managing material cybersecurity threats and incidents. Our Information Systems Representative and Chief Operating Officer identify and assess risks from cybersecurity threats by monitoring and evaluating our threat environment. We use various methods designed to accomplish this task including, for example: manual and automated tools, subscriptions to reports and services that identify cybersecurity threats, analyzing reports of threats and threat actors, and evaluating threats reported to us.

Depending on the relevant information systems environment, we implement and maintain various technical, physical, and organizational measures, processes, standards and policies designed to manage and mitigate material risks from cybersecurity threats to our Information Systems and Data, including, for example: incident detection and response strategies, systems monitoring, personnel training, cybersecurity insurance, data encryption strategies, network security controls, access controls, physical security controls, and asset management (such as tracking and disposal of Company information systems).

Our assessment and management of material risks from cybersecurity threats are integrated into the Company’s overall risk management processes. For example, our IT Department works with management in an effort to prioritize our risk management processes and mitigate cybersecurity threats that are more likely to lead to a material impact to our business.

We use service providers to assist us from time to time in an effort to identify, assess, and manage material risks from cybersecurity threats, including, for example, cybersecurity software providers and professional services firms (including legal counsel). We also use service providers to perform a variety of functions throughout our business, such as application providers, data hosting providers, and CROs. We have a vendor management strategy designed to manage cybersecurity risks associated with our use of these providers. Depending on the nature of the services provided, the sensitivity of the Information Systems and Data at issue, and the identity of the provider, our vendor management strategies may involve different levels of assessment designed to help identify cybersecurity risks associated with a provider and impose contractual obligations related to cybersecurity on the provider, such as reviewing their information security documentation and imposing contractual obligations on them with respect to their information security controls.

For a description of the risks from cybersecurity threats that may materially affect the Company and how they may do so, see our risk factors under Part 1. Item 1A. Risk Factors in this Annual Report on Form 10-K, including Our internal computer systems, or those used by our third-party research institution collaborators, CROs or other contractors or consultants, may fail or suffer security breaches, which could result in adverse consequences including, but not limited to, regulatory investigations or actions, litigation, fines/penalties, disruptions of our business operations, reputational harm, and loss of revenue or profits.

Governance

Our board of directors addresses the Company’s cybersecurity risk management as part of its general oversight function. The board of directors’ Audit Committee is responsible for overseeing Company’s cybersecurity risk management processes, including oversight and mitigation of risks from cybersecurity threats. Our Audit Committee receives regular presentations and reports on developments in the cybersecurity space, including risk management practices, recent developments, evolving standards, threats, risks and mitigation. Our Audit Committee also receives prompt and timely information regarding any cybersecurity risk that meets pre-established reporting thresholds, as well as ongoing updates regarding any such risk.

Our Information Systems Representative, in coordination with senior management including our Chief Operating Officer works collaboratively across our company to implement a program designed to protect our information systems from cybersecurity threats and to promptly respond to any material cybersecurity incidents in accordance with our incident response and recovery plans. To facilitate the success of our cybersecurity program, cross-functional teams throughout our company address cybersecurity threats

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and respond to cybersecurity incidents. Through ongoing communications with these teams, the Information Systems Representative and senior management are informed about and monitor the prevention, detection, mitigation and remediation of cybersecurity threats and incidents in real time and report such threats and incidents to the Audit Committee when appropriate. The Information Systems Representative has served in various roles in information technology and information security for over 25 years, including serving as the Director of Information Technology of another public company. Our Chief Operating Officer has over 7 years of experience managing information technology, including cybersecurity and risk management.

Item 2. Properties.

Our corporate headquarters are currently located in South San Francisco, California, where we signed a lease agreement for a smaller office space pursuant to a lease agreement that expires in November 2024. We also have leases in Medolla, in the Province of Modena, Italy where we have our manufacturing facility pursuant to a lease agreement that expires in August 31, 2028 and in Bresso, in the Province of Milan, Italy, for office space pursuant to a lease agreement that expires in January 31, 2036. We believe that these facilities will be adequate for our near-term needs. If required, we believe that suitable additional or alternative space would be available in the future on commercially reasonable terms.

Item 3. Legal Proceedings.

From time to time, we may become involved in legal proceedings arising in the ordinary course of business. We are not currently a party to any litigation or legal proceedings that, in the opinion of our management, are likely to have a material adverse effect on our business. Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, negative publicity and reputational harm and other factors.

Item 4. Mine Safety Disclosures.

Not applicable.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market Information

Our common stock is listed on the Nasdaq under the trading symbol “QNCX”.

Our common stock has been traded under the ticker symbol “CRTX” on the Nasdaq since May 9, 2019, and since August 1, 2022 under the ticker symbol “QNCX”.

Stockholders

As of March 25, 2024, there were 50 holders of record of our common stock. The actual number of stockholders is greater than this number of record holders and includes stockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.

Dividend Policy

We have never declared or paid any cash dividends on our capital stock. We currently intend to retain any future earnings and do not expect to pay any dividends in the foreseeable future. Additionally, the EIB Facility prohibits the payment of dividends. Any future determination to declare cash dividends will be made at the discretion of our board of directors, subject to applicable laws, and will depend on a number of factors, including our financial condition, results of operations, capital requirements, contractual restrictions, general business conditions, and other factors that our board of directors may deem relevant.

Sales of Unregistered Securities

None

Issuer Purchases of Equity Securities

None

Item 6. [Reserved.]

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes, and Item 1 thereto included elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements that involve risk and uncertainties, such as statements of our plans, objectives, expectations, and intentions, that are based on the beliefs of our management. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the “Risk Factors” section of this Annual Report on Form 10-K.

Overview

Following our acquisition of EryDel in October 2023, we are a late-stage biotechnology company dedicated to unlocking the power of a patient’s own biology to deliver innovative therapies to those living with rare diseases.

Our proprietary AIDE technology platform is an innovative drug/device combination platform that uses an automated process to encapsulate a drug into a patient’s own red blood cells. Red blood cells have several characteristics that make them a potentially ideal vehicle for drug delivery, including potentially better tolerability, enhanced tissue distribution, reduced immunogenicity, and prolongation of circulating half-life. Our AIDE technology is designed to harness many of these benefits to allow for new and improved therapeutic options for patients living with high unmet medical needs. The AIDE technology platform is believed to confer several benefits over conventional therapies and can be applied to a broad range of small or large molecule drugs and biologics.

EryDex is the first drug in development that leverages our AIDE technology and is composed of DSP encapsulated in autologous red blood cells targeted to treat a rare pediatric neurodegenerative disease called A-T. DSP is a corticosteroid well known for its anti-inflammatory properties, as well as its dose-limiting toxicity due to adrenal suppression. EryDex is designed to alter the pharmacokinetics and biodistribution of the DSP allowing for effective and safe treatment.

Currently, there are no approved treatments for A-T and the global market, based on our internal estimates and assumptions, represents a more than $1 billion peak commercial opportunity. We believe this makes EryDex an ideal lead asset to demonstrate the clinical and commercial potential of our AIDE technology.

2023 Events:

•On January 27, 2023, we sold our legacy small molecule protease inhibitor portfolio, including COR588, COR388, COR852, and COR803, pursuant to an asset purchase agreement with Lighthouse.

•On January 30, 2023, we announced that we intended to prioritize capital resources toward the expansion of our development pipeline through opportunistic in-licensing and acquisition of clinical-stage assets targeting debilitating and rare diseases. Our plans also called for the out-licensing of our bone-targeting drug platform and precision bone growth molecule NOV004 designed for accelerated fracture repair in patients with bone fractures and osteogenesis imperfecta. In conjunction with this action, we approved a cost reduction program to align operations with changes in our corporate strategy. This resulted in an approximate 47% reduction in our workforce that was completed by April 2023 and incurred expenses of approximately $0.4 million. We approved the related mutual termination of License Agreement for our bone-targeting drug platform and precision bone growth molecule NOV004 with PRF effective as of October 31, 2023.

•On October 20, 2023, we completed our acquisition of EryDel, a privately held, late-stage biotechnology company (the “EryDel Acquisition”) with a Phase 3 lead asset, EryDex, that targets the potential treatment of a rare neurodegenerative disease, A-T, for which there are currently no approved treatments in any global market.

•The EryDel Acquisition was completed pursuant to that certain Stock Purchase Agreement, dated as of July 21, 2023, (the “Purchase Agreement”), by and among the Company, EryDel, EryDel Italy, Inc., holders of EryDel capital stock and the managers of EryDel (the “EryDel Shareholders”) and Shareholder Representative Services LLC, a Colorado limited liability company solely in its capacity as the representative, agent and attorney-in-fact of the EryDel Shareholders. Pursuant to the terms of the Purchase Agreement, we issued 6,525,315 shares of common stock of the Company to the EryDel Shareholders. Up to an additional 725,037 shares of the Company’s common stock may be issued to the EryDel Shareholders upon the first anniversary of the closing of the EryDel Acquisition. The EryDel Shareholders have a contingent right to receive up to an aggregate of $485.0 million in potential cash payments, comprised of up to $5.0 million upon the achievement of a specified development milestone, $25.0 million at NDA acceptance by the FDA, up to $60.0 million upon the achievement of specified approval milestones, and up to $395.0 million upon the achievement of specified on market and sales milestones, with no royalties paid to EryDel. Refer to Note 15 Business Combination for additional details.

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Financial Overview

Following our acquisition of EryDel in October 2023, we shifted our strategic focus to become a late-stage biotechnology company dedicated to unlocking the power of a patient’s own biology to deliver innovative therapeutics to those living with rare diseases. We intend to focus our development expertise and financial resources toward advancing a Phase 3 NEAT clinical trial, which is an international multicenter, randomized, double-blind, placebo-controlled study to evaluate the neurological effects of EryDex on patients with A-T. Enrollment for the Phase 3 NEAT clinical trial is expected to begin in the second quarter of 2024. We plan to enroll approximately 86 patients with A-T aged six to nine years old and approximately 20 A-T patients aged 10 years or older. This pivotal clinical trial will be conducted under an SPA agreement with the FDA, which should allow for the submission of an NDA following completion of this study, provided we obtain positive results. With $75.1 million of cash, cash equivalents and short-term investments as of December 31, 2023, we believe we are well-capitalized into 2026 with the ability to fully fund our lead asset, EryDex, through Phase 3 NEAT topline results and prepare for a potential NDA submission, provided we obtain positive results.

Previously, we had devoted substantially all of our efforts and financial resources to building our research and development capabilities, establishing our corporate infrastructure, and most recently, our acquisition of EryDel and subsequent development of EryDex, and prior to that, since commencing material operations in 2014, executing our Phase1a, Phase 1b and Phase 2/3 clinical trials of our legacy small molecule protease inhibitor portfolio, including atuzaginstat (COR388), our Phase 1 SAD/MAD clinical trial of COR588 and readying our bone targeting drug NOV004 for Phase 1 clinical trials. We have sold our legacy small molecule protease inhibitor portfolio and terminated our license for NOV004.

To date, we have not generated any revenue and we have never been profitable. We have incurred net losses since the commencement of our operations. As of December 31, 2023, we had an accumulated deficit of $319.6 million. We incurred a net loss of $31.4 million in the year ended December 31, 2023. We do not expect to generate product revenue unless and until we obtain marketing approval for and commercialize a drug candidate, and we cannot assure you that we will ever generate significant revenue or profits.

To date, we have financed our operations primarily through the issuance and sale of convertible promissory notes and redeemable convertible preferred stock and common stock. From inception through December 31, 2023, we received net proceeds of approximately $303.8 million from the issuance of redeemable convertible preferred stock, convertible promissory notes and common stock.

On December 23, 2021, we entered into an Open Market Sales Agreement, with Jefferies (the "Sales Agreement"). During the year ended December 31, 2023 and 2022, we sold zero and 51,769 shares of common stock, respectively, under the Sales Agreement and received net proceeds of $0 and $0.6 million, respectively.The registration statement registering the shares subject to the Sales Agreement has expired as of June 1, 2023.

As of December 31, 2023 and 2022, we had cash, cash equivalents and short-term investments of $75.1 million and $90.2 million, respectively. The balances exclude long-term investments of $0 and $3.6 million as of those same periods. Our cash equivalents, short-term and long-term investments are held in money market funds, certificate of deposits, repurchase agreements, investments in corporate debt securities, municipal debt obligations and government agency obligations.

We believe that our existing cash, cash equivalents and short-term investments will be sufficient to fund our planned operations into 2026. This is expected to include the ability to fully fund activities related to our recently acquired lead asset, EryDex, through a Phase 3 NEAT clinical trial and open label extension, and prepare for a potential NDA submission to the FDA, provided we obtain positive results. We expect the cost of our Phase 3 NEAT study and direct trial costs for the open label extension to be approximately $20 million and approximately $15 million, respectively. We have based these estimates on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect.

In response to the reprioritization of our pipeline on January 30, 2023, the Board approved a cost reduction program to align operations with the change in corporate strategy to prioritize capital resources toward the expansion of our development pipeline through opportunistic in-licensing and acquisition of clinical-stage assets targeting debilitating and rare diseases. Under the Plan, we reduced headcount by approximately 47% through a reduction in our workforce. The reduction in force began in February 2023 was completed in April 2023.

We will need substantial additional funding to support our continuing operations and pursue our development strategy. Until such time as we can generate significant revenue from sales of an approved drug, if ever, we expect to finance our operations through the sale of equity, debt financings or other capital sources. Adequate funding may not be available to us on acceptable terms,

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or at all. If we fail to raise capital or enter into such agreements as, and when, needed, we may have to significantly delay, scale back or discontinue the development and commercialization of our drug candidates or delay our efforts to expand our product pipeline.

Critical Accounting Policies, Significant Judgments and Use of Estimates

For a description of our significant accounting policies, see Note 2 to our consolidated financial statements.

The preparation of our consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions in certain circumstances that affect the amounts reported in the accompanying consolidated financial statements and related footnotes. Actual results may differ from these estimates. We base our judgments on our experience and on various assumptions that we believe to be reasonable under the circumstances.

Of our policies, the following are considered critical to an understanding of our consolidated financial statements as they require the application of subjective and complex judgment, involving critical accounting estimates and assumptions impacting our consolidated financial statements.

The critical accounting estimates relate to the following:

•Research and Development Expenses

•Stock-based Compensation Expenses

•Income Taxes

•Business Combination

•Goodwill

•Identifiable Intangible Assets

•Contingent Consideration

•Long-term Debt

Research and Development Expenses

Research and development costs are expensed as incurred. Research and development expenses consist primarily of clinical trial and contract manufacturing expenses related to development of our drug candidates. Also included are personnel costs for our research and product development employees, non-personnel costs such as professional fees payable to third parties for preclinical studies and research services, laboratory supplies and equipment maintenance, product licenses, and other consulting costs.

We estimate preclinical and clinical study and research expenses based on the services performed, pursuant to arrangements with CROs that conduct and manage preclinical and clinical studies and research services on our behalf. Research and development contracts vary significantly in length, and may be for a fixed amount, based on milestones or deliverables, a variable amount based on actual costs incurred, capped at a certain limit, or for a combination of these elements. The financial terms of these agreements vary from contract to contract and may result in uneven expenses and payment flows. We estimate these expenses based on regular reviews with internal management personnel and external service providers as to the progress or stage of completion of services and the contracted fees to be paid for such services. Based upon the combined inputs of internal and external resources, if the actual timing of the performance of services or the level of effort varies from the original estimates, we will adjust the accrual accordingly. Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and could result in us reporting amounts that are too high or too low in any particular period. Our accrual is dependent, in part, upon the receipt of timely and accurate reporting from clinical research organizations and other third-party vendors. Payments associated with licensing agreements to acquire exclusive licenses to develop, use, manufacture and commercialize products that have not reached technological feasibility and do not have alternate commercial use are expensed as incurred. Payments made to third parties under these arrangements in advance of the performance of the related services by the third parties are recorded as prepaid expenses until the services are rendered.

To date, there have been no material differences from our accrued estimated expenses to the actual clinical trial expenses and our methodology and assumptions used in developing these estimates have not changed materially during the periods presented. If we do not identify costs that we have begun to incur or if we underestimate or overestimate the level of services performed or the costs of these services, our actual expenses could differ from our estimates, which could materially affect our results of operations. Adjustments to our accruals are recorded as changes in estimates become evident. Furthermore, based on amounts invoiced to us by

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our service providers, we may also record payments made to those providers as prepaid expenses that will be recognized as expense in future periods as services are rendered. Due to the nature of estimates, we cannot assure you that we will not make changes to our estimates in the future as we become aware of additional information about the status or conduct of our research and development activities.

Stock-Based Compensation Expense

We measure and record compensation expense using the applicable accounting guidance for share-based payments related to stock options and performance-based awards granted to our directors and employees. The fair value of stock options is determined by using the Black-Scholes option-pricing model. The Black-Scholes valuation model incorporates assumptions as to stock price volatility, the expected life of options or awards, a risk-free interest rate and dividend yield. In valuing our stock options and market-based stock awards, significant judgment is required in determining the expected volatility of our common stock and the expected life that individuals will hold their stock options prior to exercising. Expected volatility for stock options is based on the historical volatility of our own stock and the stock of companies within our defined peer group. Further, our expected volatility may change in the future, which could substantially change the grant-date fair value of future awards and, ultimately, the expense we record.

We expense stock-based compensation for stock options and performance awards over the requisite service period. For awards with only a service condition, we expense stock-based compensation using the straight-line method over the requisite service period for the entire award. For awards with a market condition, we expense over the vesting period regardless of the value that the award recipients ultimately receive.

We estimate the fair value of stock-based compensation utilizing the Black-Scholes option-pricing model, which is impacted by the following variables:

Expected Term—We have opted to use the “simplified method” for estimating the expected term of options, whereby the expected term equals the arithmetic average of the vesting term and the original contractual term of the option (generally 10 years).

Expected Volatility—Due to our limited operating history and a lack of company specific historical and implied volatility data, we have based our estimate of expected volatility on the historical volatility of our own stock and the stock of companies within our defined peer group. The historical volatility data was computed using the daily closing prices for the selected companies’ shares during the equivalent period of the calculated expected term of the stock-based awards.

Risk-Free Interest Rate—The risk-free rate assumption is based on the U.S. Treasury instruments with maturities similar to the expected term of our stock options.

Expected Dividend—We have not issued any dividends in our history and do not expect to issue dividends over the life of the options and therefore have estimated the dividend yield to be zero.

Income Taxes

We prepare and file income tax returns based on our interpretation of each jurisdiction’s tax laws and regulations. In preparing our consolidated financial statements, we estimate our income tax liability in each of the jurisdictions in which we operate by estimating our actual current tax expense together with assessing temporary differences resulting from differing treatment of items for tax and financial reporting purposes. These differences result in deferred tax assets and liabilities, which are included in our consolidated balance sheets.

Significant management judgment is required in assessing the realizability of our deferred tax assets. In performing this assessment, we consider whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. In making this determination, under the applicable financial accounting standards, we are allowed to consider the scheduled reversal of deferred tax liabilities, projected future taxable income and the effects of tax planning strategies. In the event that actual results differ from our estimates, we adjust our estimates in future periods and we may need to increase or decrease our valuation allowance, when management determines it is more likely than not that some or all of the tax benefits will not be realized. This could materially impact our consolidated financial position and results of operations.

We account for uncertain tax positions using a “more likely than not” threshold for recognizing and resolving uncertain tax positions. We evaluate uncertain tax positions on a quarterly basis and consider various factors including, but not limited to, changes in tax law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to

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audit, information obtained during in process audit activities and changes in facts or circumstances related to a tax position. We adjust the level of the liability to reflect any subsequent changes in the relevant facts surrounding the uncertain positions. Our liabilities for uncertain tax positions can be relieved only if the contingency becomes legally extinguished, through either payment to the taxing authority or the expiration of the statute of limitations, the recognition of the benefits associated with the position meet the “more likely than not” threshold or the liability becomes effectively settled through the examination process. We consider matters to be effectively settled once the taxing authority has completed all of its required or expected examination procedures, including all appeals and administrative reviews, we have no plans to appeal or litigate any aspect of the tax position and we believe that it is highly unlikely that the taxing authority would examine or re-examine the related tax position. We also accrue for potential interest and penalties related to unrecognized tax benefits in income tax expense. Judgments concerning the recognition and measurement of a tax benefit might change as new information becomes available.

Business Combination

We make certain judgments to determine whether transactions should be accounted for as acquisitions of assets or as business combinations. If it is determined that substantially all of the fair value of gross assets acquired in a transaction is concentrated in a single asset (or a group of similar assets), the transaction is treated as an acquisition of assets. We evaluate the inputs, processes, and outputs associated with the acquired set of activities. If the assets in a transaction include an input and a substantive process that together significantly contribute to the ability to create outputs, the transaction is treated as an acquisition of a business. We account for business combinations using the acquisition method of accounting, which requires that assets acquired and liabilities assumed generally be recorded at their fair values as of the acquisition date.

The Company accounts for business combinations using the acquisition method pursuant to the FASB ASC Topic 805. This method requires, among other things, that results of operations of acquired companies are included in the Company's financial results beginning on the respective acquisition dates, and that identifiable assets acquired and liabilities assumed are recognized at fair value as of the acquisition date. Intangible assets acquired in a business combination are recorded at fair value using a discounted cash flow model. The discounted cash flow model requires assumptions about the timing and amount of future net cash flows, the cost of capital and terminal values from the perspective of a market participant. Any excess of the fair value of consideration transferred (the “Purchase Price”) over the fair values of the net assets acquired is recognized as goodwill. The fair value of identifiable assets acquired and liabilities assumed in certain cases may be subject to revision based on the final determination of fair value during a period of time not to exceed 12 months from the acquisition date. Legal costs, due diligence costs, business valuation costs and all other acquisition-related costs are expensed when incurred.

Goodwill

When we acquire a business, the assets acquired and liabilities assumed are recorded at their respective fair values at the acquisition date. Goodwill represents the excess of the acquisition consideration over the fair value of assets acquired and liabilities assumed. We test goodwill for impairment annually and when events or changes in circumstances indicate that the carrying value may not be recoverable. We have determined that we operate in a single segment and have a single reporting unit associated with the development and commercialization of pharmaceutical products. In performing the annual impairment test, the fair value of the reporting unit is compared to its corresponding carrying value, including goodwill. If the carrying value exceeds the fair value of the reporting unit an impairment loss will be recognized for the amount by which the reporting unit’s carrying amount exceeds its fair value, not to exceed the carrying amount of goodwill. The Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of the Company is less than its carrying amount, including goodwill. If that is the case, the Company performs a quantitative impairment test, and, if the carrying amount of the Company exceeds its fair value, then the Company will recognize an impairment charge for the amount by which its carrying amount exceeds its fair value, not to exceed the carrying amount of the goodwill.

Identifiable Intangible Assets

We have acquired intangible assets through our recent business combinations with EryDel in the fourth quarter of 2023, and with Novosteo in 2022. When significant identifiable intangible assets are acquired, we engage an independent third party valuation firm to assist in determining the fair values of these assets as of the acquisition date. Discounted cash flow models are typically used in these valuations, which require the use of significant estimates and assumptions, including but not limited to:

•estimating the timing of and expected costs to complete the in-process projects;

•projecting regulatory approvals;

•estimating future cash flows including revenues and operating profits resulting from completed products and in-process projects; and

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•developing appropriate discount rates and probability rates by project.

We believe the fair value that we assign to the intangible asset acquired are based upon reasonable estimates and assumptions given available facts and circumstances as of the acquisition dates. No assurance can be given, however, that the underlying assumptions used to estimate expected cash flows will transpire as estimated. In addition, we are required to estimate the period of time over which to amortize the intangible assets, which requires significant judgment.

Impairment of Intangible Assets

Finite-lived intangible asset consist primarily of the tradename and is amortized on a straight-line basis over their estimated useful lives. Indefinite lived intangible assets are not amortized, Intangible assets related to IPR&D acquired in a business combination or an acquisition that are used in IPR&D shall be considered indefinite lived until the completion or abandonment of the associated research and development efforts. IPR&D is not amortized but is tested for impairment annually or when events or circumstances indicate that the fair value may be below the carrying value of the asset. If the carrying value of the assets is not expected to be recovered, the assets are written down to their estimated fair values. Please refer to Note 16, Intangible Assets to the Notes to the consolidated financial statements of this Annual Report on Form 10‑K, for further information about our intangible assets as of December 31, 2023.

Contingent Consideration

We determine the acquisition date fair value of contingent consideration using a discounted cash flow method, with significant inputs that are not observable in the market and thus represents a Level 3 fair value measurement as defined in ASC Topic 820, Fair Value Measurement. The significant inputs in the Level 3 measurement not supported by market activity included our probability assessments of expected future cash flows related to our acquisition of EryDel in October 2023, during the contingent consideration period, appropriately discounted considering the uncertainties associated with the earnout obligation, and calculated in accordance with the terms of the definitive agreement. The liabilities for the contingent consideration are established at the time of the acquisition and will be evaluated on a quarterly basis based on additional information as it becomes available. Any change in the fair value adjustment is recorded in the earnings of that period. During the year ended December 31, 2023, we recorded a $1.6 million adjustment to increase the fair value of our contingent consideration related to the acquisition of EryDel. The adjustment is reflected within operating loss on the consolidated statement of operations and comprehensive loss. Changes in the fair value of the contingent consideration obligations may result from changes in probability assumptions with respect to the likelihood of achieving the various contingent payment obligations. Significant increases or decreases in the inputs noted above in isolation would result in a significantly lower or higher fair value measurement.

Long-Term Debt

We determined that we are eligible for the fair value option election in connection with the EIB Loan (as defined below) as the instrument met the definition of a “recognized financial liability” which is an acceptable financial instrument eligible for the fair value option under ASC 825. At the date of inception of the EIB Loan through the EryDel Acquisition, the fair value for each instrument is derived from the instrument’s implied discount rate at inception.

Components of Operating Results

Operating Expenses

Research and Development Expenses

Our research and development expenses consist of expenses incurred in connection with the research and development of our research programs. These expenses include payroll and personnel expenses, including stock-based compensation, for our research and product development employees, laboratory supplies, product licenses, consulting costs, contract research, regulatory, quality assurance, preclinical and clinical expenses, allocated rent, facilities costs and depreciation. We expense both internal and external research and development costs as they are incurred. Non-refundable advance payments and deposits for services that will be used or rendered for future research and development activities are recorded as prepaid expenses and recognized as an expense as the related services are performed.

To date, our research and development expenses have supported the advancement of atuzaginstat (COR388) and COR588 and to a lesser extent the clinical and regulatory development of NOV004. With the acquisition of EryDel, we expect our research and

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development expenses to increase significantly from current levels as we begin enrollment and proceed with the Phase 3 NEAT clinical trial.

In addition, the probability of success of any in-licensed drug candidate will depend on numerous factors, including safety, efficacy, competition, manufacturing capability and commercial viability. We will need to determine which programs to pursue and how much to fund each program in response to the scientific and clinical success of each drug candidate, as well as an assessment of each drug candidate’s commercial potential.

Because our drug candidates have not been in-licensed the outcome of these efforts is uncertain, we cannot estimate the actual amounts necessary to successfully complete the development and commercialization of our drug candidate or whether, or when, we may achieve profitability.

General and Administrative Expenses

General and administrative expenses consist principally of personnel-related costs, including payroll and stock-based compensation, for personnel in executive, finance, human resources, business and corporate development, and other administrative functions, professional fees for legal, consulting, insurance and accounting services, allocated rent and other facilities costs, depreciation, and other general operating expenses not otherwise classified as research and development expenses.

We anticipate that our general and administrative expenses will increase from current levels due to the acquisition of EryDel and the increase in headcount as the size of our business and research and development operations grows to support additional research and development activities.

Interest Income

Interest income consists primarily of interest earned on our short-term and long-term investments portfolio.

Other Expense, net

Other expense, net consists primarily of the effects of foreign currency exchange rates.

Results of Operations

Comparison of the Years Ended December 31, 2023 and 2022

The following table summarizes our results of operations for the periods indicated (dollars in thousands):

	Year Ended December 31,						Change
	2023			2022			$			%
Operating expenses:
Research and development	$	9,447		$	25,178		$	(15,731	)		(62.5	)	%
General and administrative		17,695			26,012			(8,317	)		(32.0	)	%
Goodwill impairment charge		—			825			(825	)		(100.0	)	%
Intangible asset impairment charge		5,900			—			5,900			100.0		%
Fair value adjustment for contingent consideration		1,578			—			1,578			100.0		%
Loss from operations		(34,620	)		(52,015	)		(17,395	)		(33.4	)	%
Fair value adjustment for long-term debt		(338	)		—			(338	)		100.0		%
Interest income		3,478			1,068			(2,410	)		(225.7	)	%
Other expense, net		(102	)		(997	)		(895	)		(89.8	)	%
Net loss before income tax benefit		(31,582	)		(51,944	)		(20,362	)		(39.2	)	%
Income tax benefit		197			284			87			30.6		%
Net loss	$	(31,385	)	$	(51,660	)	$	(20,275	)		(39.2	)	%

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Research and Development Expenses

The following table summarizes our research and development expenses: (dollars in thousands)

	Year Ended December 31,				Change
	2023		2022		$			%
Direct research and development expenses:
EryDex	$	1,655	$	—	$	1,655			100.0		%
Atuzaginstat (COR388)		153		1,400		(1,247	)		(89.1	)	%
COR588		28		5,467		(5,439	)		(99.5	)	%
NOV004		2,048		1,834		214			11.7		%
Other direct research costs		280		1,510		(1,230	)		(81.5	)	%
Indirect research and development expenses:
Personnel related (including stock-based compensation)		4,619		14,147		(9,528	)		(67.3	)	%
Facilities and other research and development expenses		664		820		(156	)		(19.0	)	%
Total research and development expenses	$	9,447	$	25,178	$	(15,731	)		(62.5	)	%

Research and development expenses were $9.4 million for the year ended December 31, 2023, compared to $25.2 million for the year ended December 31, 2022, a decrease of $15.7 million. We anticipate our research and development expenses to increase significantly from current levels as we begin enrollment and proceed with the Phase 3 NEAT clinical trial.

The costs for EryDex development increased $1.7 million from prior year due to the start-up costs related to the Phase 3 NEAT clinical trial. This increase is primarily due to an increase in clinical trial costs of $1.6 million and a $0.1 million increase in Medtech and drug manufacturing costs.

The costs for atuzaginstat (COR388) development decreased $1.2 million from the prior year due to a decrease of $0.8 million in drug manufacturing costs and a decrease of $0.4 million related to consulting for atuzaginstat (COR388).

Our Phase 1 SAD/MAD trial was completed in the second quarter of 2022 for our compound COR588 in healthy participants in Australia. As a result, the costs for COR588 decreased by $5.4 million from the prior year. This decrease was primarily due to a $2.7 million decrease for non-clinical studies to support COR588, a $1.6 million decrease in drug manufacturing costs, a $1.0 million decrease in clinical trial costs, and a $0.1 million decrease in consulting expenses to support COR588.

As we sold our legacy protease inhibitor portfolio including COR388 and COR588 to Lighthouse in January 2023, we do not expect any additional expenses related to these legacy assets in 2024.

For the year ended December 31, 2023, the costs for NOV004 increased by $0.2 million primarily as due to the increase in drug manufacturing costs as we wrapped up the program. Due to the decision made on January 30, 2023 to align with our updated corporate strategy, we do not expect further NOV004 costs in 2024.

Additionally, other direct research costs decreased $1.2 million primarily due to the winddown of pipeline development of our two arginine gingipain inhibitors, COR788 and COR822, our 3CLpro inhibitor, COR803, COR852 and other preclinical research which were sold to Lighthouse in January 2023.

For the year ended December 31, 2023, we experienced a net decrease of $9.5 million in personnel related expenses due to a $5.2 million decrease in allocated stock-based compensation costs, a decrease of $1.6 million of severance incurred, and a decrease of $2.8 million related to reduced headcount year over year.

Facilities and other research and development expenses decreased $0.2 million for the year ended December 31, 2023 primarily due to a $0.2 million decrease in the purchase of non-clinical supplies, a $0.2 million decrease in facilities and rent expense, and a $0.2 million decrease in administration and depreciation expense, offset by a $0.4 million increase in regulatory and quality assurance consulting costs.

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General and Administrative Expenses

General and administrative expenses decreased by $8.3 million to $17.7 million for the year ended December 31, 2023 from $26.0 million for the year ended December 31, 2022. The decrease in general and administrative expenses was primarily due to an overall decrease in personnel expenses of $8.2 million, which is made up of a $6.2 million decrease in allocated stock-based compensation expense, a $1.6 million decrease of severance incurred, and a decrease of $0.3 million related to reduced headcount year over year. We also incurred a $1.3 million decrease in corporate insurance expenses, a net decrease of $0.2 million in legal, facilities, and other administrative expense due to our cost reductions efforts announced in the first quarter of 2023 and lower Director & Officers insurance premiums. This was partially offset by an increase of $1.2 million in business development consulting related to the EryDel transaction and a $0.2 million increase in audit, tax, and other professional fees year over year.

Goodwill Impairment Charge

As of September 30, 2022, we conducted an impairment analysis of our goodwill that resulted from the purchase of Novosteo, Inc. in May 2022. That assessment included a qualitative assessment of deteriorating macro-economic conditions, including inflationary pressures, rising interest rates, and the continuing decline in our market capitalization from the date of acquisition. This qualitative assessment indicated that our goodwill was potentially impaired. To determine the extent, if any, by which our goodwill was impaired, we conducted additional quantitative analyses which resulted in our fair value being significantly below our current carrying value. As a result of the analyses, we recorded a non-cash goodwill impairment charge of $0.8 million for the year ended December 31, 2022. There have been no additional impairment charges since the prior period as there were no impairment indicators detected as part of the qualitative assessment for the EryDel goodwill that remained on the books as of December 31, 2023.

Intangible Asset Impairment Charge

As of March 31, 2023, we conducted an impairment analysis of our intangible asset IPR&D that resulted from the purchase of Novosteo, Inc. in May 2022. To determine the extent, if any, by which our IPR&D intangible asset was impaired, we conducted a quantitative analysis which resulted in our fair value being significantly below our current carrying value due to the assumptions changing as a result of the decision to hold this asset for sale in January 2023. As a result of the analyses, we recorded a non-cash intangible asset IPR&D impairment charge of $5.9 million for the year ended December 31, 2023. There have been no additional impairment charges related to EryDel as there were no impairment indicators detected as part of the qualitative assessment for the EryDex IPR&D that remained on the books as of December 31, 2023.

Fair Value Adjustment for Contingent Consideration

For the year ended December 31, 2023, we recorded a fair value adjustment for contingent consideration which resulted in a $1.6 million charge primarily due to the passage of time related to the contingent consideration earn-outs resulting from the EryDel Acquisition.

Fair Value Adjustment for Long-term Debt

For the year ended December 31, 2023, we recorded a fair value adjustment for long-term debt which resulted in a $0.3 million charge primarily due to the passage of time and the interest accrued for the debt with the EIB.

Interest Income

For the year ended December 31, 2023, interest income increased by $2.4 million as compared to the year ended December 31, 2022. The increase was due to increased yields on our investment portfolio which were partially offset by decreased average balances.

Other Expense

Other expense decreased by $0.9 million for the year ended December 31, 2023, primarily due to $0.6 million lower of unrealized losses resulting from changes in foreign exchange rates, as well as a $0.2 million decrease related to the San Diego lease impairment loss and loss on disposal of fixed assets incurred during the year ended December 31, 2022.

Income Tax

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There was no change in the income tax benefit as we recorded a $0.2 million income tax benefit for the year ended December 31, 2023 as a result of the quantitative and qualitative analysis that concluded in the NOV004 asset being fully impaired and written off.

Liquidity, Capital Resources and Plan of Operations

We have incurred cumulative net losses and negative cash flows from operations since our inception and anticipate we will continue to incur net losses for the foreseeable future. As of December 31, 2023, we had an accumulated deficit of $319.6 million. To date we have funded our operations primarily from the sales of our equity securities. As of December 31, 2023, we had cash, cash equivalents and investments of $75.1 million. Based on our current business plans, we believe that our existing capital resources will be sufficient to fund our projected operating requirements for at least the next twelve months from the date of the issuance of the accompanying consolidated financial statements. Our cash, cash equivalents, and marketable debt securities are held in a variety of deposit accounts, interest-bearing accounts, corporate bond securities, U.S government securities, debt securities in government-sponsored entities, and money market funds. Cash in excess of immediate requirements is invested with a view toward liquidity and capital preservation, and we seek to minimize the potential effects of concentration and credit risk.

Capital Resources

Our primary use of cash is to fund operating expenses, which consist primarily of research and development expenditures related to EryDex, the initiation and continuation of the Phase 3 NEAT clinical trial, and general and administrative expenditures. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses.

In January 2023 we out-licensed our legacy protease inhibitors to Lighthouse and terminated our license for NOV004. We also intend to concentrate our efforts on development of EryDex. Accordingly, we cannot estimate the actual amounts necessary to successfully complete the development and commercialization of any drug candidates or whether, or when, we may achieve profitability.

We may continue to require additional capital to develop our drug candidates and fund operations for the foreseeable future. We may seek to raise capital through private or public equity or debt financings, collaborative or other arrangements with other companies, or through other sources of financing. Adequate additional funding may not be available to us on acceptable terms or at all. Our failure to raise capital as and when needed could have a negative impact on our financial condition and our ability to pursue our business strategies. Following our acquisition of EryDel, we anticipate that we will need to raise substantial additional capital, the requirements of which will depend on many factors, including:

•the progress, costs, trial design, results of and timing of our Phase 3 NEAT clinical trial and any potential future trials;

•the outcome, costs and timing of seeking and obtaining FDA and any other regulatory approvals;

•payment of future milestones to EryDel shareholders and payments to the EIB in respect of obligations under the EIB Facility;

•the number and characteristics of drug candidates that we pursue;

•our ability to maintain, expand and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make, or that we may receive, in connection with the licensing, filing, prosecution, defense and enforcement of any patents or other intellectual property rights;

•our need and ability to retain management and hire scientific and clinical personnel;

•the effect of competing drugs and drug candidates and other market developments;

•our need to implement additional internal systems and infrastructure, including financial and reporting systems; and

•the economic and other terms, timing of and success of any collaboration, licensing or other arrangements into which we may enter in the future.

If we raise additional funds by issuing equity securities, our stockholders will experience dilution. Any future debt financing into which we enter may impose upon us additional covenants that restrict our operations, including limitations on our ability to incur liens or additional debt, pay dividends, repurchase our common stock, make certain investments and engage in certain merger, consolidation or asset sale transactions. Any debt financing or additional equity that we raise may contain terms that are not

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favorable to us or our stockholders. If we are unable to raise additional funds when needed, we may be required to delay, reduce, or terminate some or all of our development programs and clinical trials. We may also be required to sell or license to other rights to our drug candidates in certain territories or indications that we would prefer to develop and commercialize ourselves.

Our ability to raise additional capital may be adversely impacted by potential worsening global economic conditions and the recent disruptions to, and volatility in, the credit and financial markets in the United States and worldwide. However, based on our current business plans, we believe that our existing cash, cash equivalents and investments will be sufficient to fund our planned operations, which would include anticipated clinical and development activities related to EryDel's lead asset through completion of the Phase 3 NEAT clinical trial, and into 2026, but does not include any costs or cash expenditures associated with any additional potential asset acquisition.

Summary Statement of Cash Flows

The following table sets forth the primary sources and uses of cash and cash equivalents for each of the periods presented below (in thousands):

	Year Ended December 31,
	2023			2022
Net cash (used in) provided by:
Operating activities	$	(18,292	)	$	(44,038	)
Investing activities		(5,758	)		18,002
Financing activities		143			707
Effect of exchange rate changes on cash		80			184
Net decrease in cash and cash equivalents	$	(23,827	)	$	(25,145	)

Operating Activities

Net cash used in operating activities was $18.3 million for the year ended December 31, 2023. Cash used in operating activities in the year ended December 31, 2023 was primarily due to our net loss for the period of $31.4 million, which included non-cash expenses of $11.2 million, including $5.2 million in stock-based compensation, and a net decrease in accounts payable and accrued expenses and other current liabilities of $2.3 million, offset by increases in our current assets of $4.2 million.

Net cash used in operating activities was $44.0 million for the year ended December 31, 2022. Cash used in operating activities in the year ended December 31, 2022 was primarily due to our net loss for the period of $51.7 million, which included non-cash expenses of $17.5 million, including $16.6 million in stock-based compensation, and a net decrease in accounts payable and accrued expenses and other current liabilities of $12.6 million and increases in our current assets of $2.8 million.

Investing Activities

Cash used in investing activities was $5.8 million in the year ended December 31, 2023, primarily related to the purchase of investments of $113.8 million, offset by maturities of investments of $111.2 million, transaction costs related to the EryDel acquisition net of cash acquired of $2.1 million, the advance of the note receivable to EryDel prior to the close of the acquisition of $1.0, and the purchase of equipment of $0.2 million.

Cash provided by investing activities was $18.0 million in the year ended December 31, 2022, primarily related to the purchase of equipment of $0.1 million, purchase of investments of $75.0 million, offset by maturities of investments of $82.5 million and cash acquired from the Novosteo Acquisition of $10.6 million.

Financing Activities

Cash provided by financing activities was $0.1 million in the year ended December 31, 2023, which consisted of net proceeds from the exercise of stock options in the period.

Cash provided by financing activities was $0.7 million in the year ended December 31, 2022, which consisted of proceeds from the issuance of common stock in connection with an open market sales agreement, net of issuance costs as well as proceeds from the exercise of options.

Contractual Obligations and Commitments

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Material contractual obligations arising in the normal course of business primarily consist of operating leases, drug manufacturing, preclinical and clinical contract obligations. As of December 31, 2023, our operating lease payment obligations were $0.4 million, of which $0.1 million is expected to be paid within 12 months and the remainder thereafter. See Note 6 to the consolidated financial statements for amounts outstanding for operating leases on December 31, 2023.

We enter into contracts in the normal course of business with third-party contract organizations for clinical trials, non-clinical studies and testing, manufacturing, and other services and products for operating purposes. The amount and timing of the payments under these contracts varies based upon the timing of the services. We have recorded accrued expense of approximately $1.0 million in our consolidated balance sheet for expenditures incurred by these vendors as of December 31, 2023. We have approximately $17.1 million in cancellable future operating expense commitments based on existing contracts as of December 31, 2023. These obligations will be satisfied in the normal course of business, but generally no longer than 12 months. As of December 31, 2023, the fair value of the EIB loan is $13.4 million and it is recorded as long-term debt on the consolidated balance sheet at Fair Value. As of December 31, 2023, the fair value of long-term contingent consideration on our books for the earnout related to the EryDel Acquisition is $53.6 million and the short-term portion is $4.1 million, refer to Note 3 to the consolidated financial statements for further details.

Indemnification

As permitted under Delaware law and in accordance with our bylaws, we indemnify our officers and directors for certain events or occurrences while the officer or director is or was serving in such capacity. We are also party to indemnification agreements with our officers and directors. We believe the fair value of the indemnification rights and agreements is minimal. Accordingly, we have not recorded any liabilities for these indemnification rights and agreements as of December 31, 2023 and December 31, 2022.

Recent Accounting Pronouncements

See Note 2 to our consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K for a description of recent accounting pronouncements applicable to our business.

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

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and are not required to provide the information required under this item.

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Item 8. Financial Statements and Supplementary Data.

Quince Therapeutics, Inc.

Index to Consolidated Financial Statements

Audited Consolidated Financial Statements	Page
Report of Independent Registered Public Accounting Firm (PCAOB ID: 243)	98
Consolidated Balance Sheets	100
Consolidated Statements of Operations and Comprehensive Loss	101
Consolidated Statements of Stockholders’ Equity	102
Consolidated Statements of Cash Flows	103
Notes to Consolidated Financial Statements	104

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Shareholders and Board of Directors

Quince Therapeutics, Inc.

South San Francisco, California

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Quince Therapeutics, Inc. (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for each of the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Valuation of Contingent Consideration and Intangible Assets Related to In-process Research and Development (IPR&D)

As disclosed in Notes 15 and 16 to the consolidated financial statements, on October 20, 2023, the Company completed its acquisition of EryDel S.p.A., which the Company accounted for as a business combination. The acquisition date fair value of the consideration transferred was approximately $66.9 million, which included $56.1 million of contingent consideration based on achieving certain milestones. The Company estimated the fair value of the contingent consideration using a probability-weighted discounted cash flow model. In addition, as a result of the acquisition, the Company acquired IPR&D with a fair value of $60.6 million, which was determined using the Multi-Period Excess Earnings Method under the income approach. Management used significant assumptions including probability rates and discount rates in determining the fair values of the contingent consideration and IPR&D, as well as certain significant assumptions in its revenue projections in determining the fair value of the IPR&D.

We identified the valuation of contingent consideration and intangible assets related to IPR&D at the acquisition date as a critical audit matter due to the significant management judgment and subjectivity required in determining their fair values. Auditing management's assumptions related to the probability rates and discount rates for the valuations of the contingent consideration and IPR&D and certain significant assumptions used in the revenue projections for the IPR&D valuation involved especially subjective auditor

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judgment due to the nature and extent of audit effort required to address this matter, including the involvement of professionals with specialized skills or knowledge.

The primary procedures we performed to address this critical audit matter included:

•Evaluating the reasonableness of certain significant assumptions used in the revenue projections for the IPR&D valuation by comparing these assumptions with relevant industry or market data and historical selling prices of similar products.

•For the valuations of the contingent consideration and IPR&D, utilizing valuation professionals with specialized skill and knowledge to assist in (i) assessing the appropriateness of the valuation methodologies used by management, (ii) evaluating the reasonableness of the probability rates and discount rates used by management, and (iii) developing a range of independent estimates of probability rates and discount rates and comparing those to the rates used by management.

/s/ BDO USA, P.C.

We have served as the Company's auditor since 2018.

San Jose, California

April 1, 2024

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QUINCE THERAPEUTICS, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands except share and per share data)

	December 31, 2023			December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	20,752		$	44,579
Short-term investments		54,307			45,602
Prepaid expenses and other current assets		2,381			3,567
Total current assets		77,440			93,748
Assets held for sale		10			—
Property and equipment, net		234			393
Operating lease right-of-use assets		385			291
Long-term investments		—			3,578
Goodwill		17,625			—
Intangible asset		63,672			5,900
Other assets		8,456			—
Equity investments in Lighthouse Pharmaceuticals, Inc.		78			—
Total assets	$	167,900		$	103,910
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	2,033		$	570
Short-term contingent consideration		4,103			—
Accrued expenses and other current liabilities		3,436			2,499
Total current liabilities		9,572			3,069
Long-term debt		13,429			—
Long-term operating lease liabilities		321			—
Long-term contingent consideration		53,603			—
Deferred tax liabilities		5,304			248
Other long-term liabilities		587			—
Total liabilities		82,816			3,317
Commitments and contingencies (See Note 8)
Stockholders’ equity:
Preferred stock, $0.001 par value, 10,000,000 authorized (100,000 shares of which are designated as Series A Junior Participating Preferred Stock), no shares issued and    outstanding as of December 31, 2023 and 2022, respectively		—			—
Common stock, $0.001 par value, 100,000,000 shares authorized,    42,973,215 and 36,136,480 issued and outstanding as of December 31, 2023 and    2022, respectively		43			36
Additional paid in capital		401,638			389,105
Accumulated other comprehensive income (loss)		3,047			(289	)
Accumulated deficit		(319,644	)		(288,259	)
Total stockholders’ equity		85,084			100,593
Total liabilities and stockholders’ equity	$	167,900		$	103,910

See accompanying notes to the consolidated financial statements

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QUINCE THERAPEUTICS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands except for share and per share amounts)

	Year Ended December 31,
	2023			2022
Operating expenses:
Research and development	$	9,447		$	25,178
General and administrative		17,695			26,012
Goodwill impairment charge		—			825
Intangible asset impairment charge		5,900			—
Fair value adjustment for contingent consideration		1,578			—
Total operating expenses		34,620			52,015
Loss from operations		(34,620	)		(52,015	)
Fair value adjustment for long-term debt		(338	)		—
Interest income		3,478			1,068
Other expense, net		(102	)		(997	)
Net loss before income tax benefit		(31,582	)		(51,944	)
Income tax benefit		197			284
Net loss		(31,385	)		(51,660	)
Other comprehensive income (loss):
Foreign currency translation adjustments		2,789			248
Unrealized gain (loss) on available-for-sale securities		547			(458	)
Total comprehensive loss	$	(28,049	)	$	(51,870	)
Net loss per share - basic and diluted	$	(0.84	)	$	(1.54	)
Weighted average shares of common stock outstanding - basic and diluted		37,237,149			33,496,534

See accompanying notes to the consolidated financial statements

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QUINCE THERAPEUTICS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands except share amounts)

	Common Stock					Additional Paid in			Accumulated Other Comprehensive			Accumulated			Shareholders'
	Shares			Amount		Capital			Income / (Loss)			Deficit			Equity
Balance January 1, 2022		30,074,412		$	30	$	355,234		$	(79	)	$	(236,599	)	$	118,586
Issuance of common stock in connection with open market sales agreement, net of issuance costs of $19		51,769			—		608			—			—			608
Issuance of common stock on exercise of stock options and vesting of restricted stock units		490,299			—		148			—			—			148
Stock based compensation		—			—		16,618			—			—			16,618
Share issuance in connection with acquisition of Novosteo, Inc.		5,520,000			6		16,497			—			—			16,503
Foreign currency translation adjustment		—			—		—			248			—			248
Unrealized gain (loss) on available-for-sale investments		—			—		—			(458	)		—			(458	)
Net loss		—			—		—			—			(51,660	)		(51,660	)
Balance December 31, 2022		36,136,480		$	36	$	389,105		$	(289	)	$	(288,259	)	$	100,593
Issuance of common stock on exercise of stock options and vesting of restricted stock units		374,713			—		167			—			—			167
Restricted stock award forfeiture		(63,293	)		—		(18	)		—			—			(18	)
Stock based compensation		—			—		5,220			—			—			5,220
Share issuance in connection with acquisition of EryDel S.p.A.		6,525,315			7		7,164			—			—			7,171
Foreign currency translation adjustment		—			—		—			2,789			—			2,789
Unrealized gain (loss) on available-for-sale investments		—			—		—			547			—			547
Net loss		—			—		—			—			(31,385	)		(31,385	)
Balance December 31, 2023		42,973,215		$	43	$	401,638		$	3,047		$	(319,644	)	$	85,084

See accompanying notes to the consolidated financial statements

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QUINCE THERAPEUTICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Year Ended December 31,
	2023			2022
Cash flows from operating activities
Net Loss	$	(31,385	)	$	(51,660	)
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash rent expense		—			(29	)
Stock based compensation		5,220			16,618
Depreciation and amortization		322			204
Impairment loss on operating lease		66			136
Gain on sale of Legacy Assets		(78	)		—
Loss on disposal of fixed assets		37			94
Change in the fair value of contingent consideration liabilities		1,578			—
Change in fair value of EIB loan		338			—
Non-cash goodwill impairment charge		—			825
Non-cash intangibles impairment charge		5,900			—
Amortization of discount on available-for-sale investments		(2,019	)		(113	)
Change in deferred tax liabilities due to acquisition of Novosteo, Inc.		(248	)		(284	)
Changes in operating assets and liabilities, net of acquisitions:
Prepaid expenses and other current assets		4,246			2,580
Other assets		(9	)		194
Accounts payable		(288	)		(5,943	)
Accrued expenses and other current liabilities		(1,972	)		(6,660	)
Net cash used in operating activities		(18,292	)		(44,038	)
Cash flow from investing activities:
Purchase of investments		(113,781	)		(75,021	)
Proceeds from maturities of investments		111,209			82,493
Cash acquired from Novosteo, Inc.		—			10,593
Advancement of notes receivable		(1,000	)		—
Cash paid in acquisition of EryDel S.p.A. net of cash acquired		(2,116	)		—
Proceeds from disposal of assets		90			70
Purchase of property and equipment		(160	)		(133	)
Net cash provided by (used in) investing activities		(5,758	)		18,002
Cash flows from financing activities:
Payments of finance leases		(6	)		(49	)
Proceeds from issuance of common stock upon exercise of stock options		149			148
Proceeds from issuance of common stock in connection with open market sales agreement, net of issuance costs		—			608
Net cash provided by financing activities		143			707
Effect of exchange rate changes on cash		80			184
Net decrease in cash and cash equivalents		(23,827	)		(25,145	)
Cash and cash equivalents at beginning of period		44,579			69,724
Cash and cash equivalents at end of period	$	20,752		$	44,579
Supplemental disclosures of non-cash information:
Net assets acquired of EryDel S.p.A. in exchange for common stock	$	63,732		$	—
Net assets acquired of Novosteo, Inc. in exchange for common stock	$	—		$	16,503
Right-of-use assets obtained in exchange for new operating lease liabilities	$	—		$	411
Right-of-use asset and financing lease liability reduction as a result of lease modification	$	(70	)	$	—
Right-of-use asset and operating lease liability reduction as a result of lease modification	$	—		$	(640	)

See accompanying notes to the consolidated financial statements

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QUINCE THERAPEUTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Organization

Description of Business

Effective August 1, 2022, Cortexyme Inc. changed its name to Quince Therapeutics, Inc (the "Company"). The Company was incorporated in the State of Delaware in June 2012 and is headquartered in South San Francisco, California.

From its inception, the Company has been focused on novel therapeutic approaches to improve the lives of patients diagnosed with Alzheimer’s and other degenerative diseases. The predecessor company, Cortexyme, Inc. was initially founded on the seminal discovery of the presence of Porphyromonas gingivalis, and its secreted toxic virulence factor proteases, called gingipains, in the relevant brain areas of both Alzheimer's and Parkinson's disease patients. In May 2022, the Company completed the acquisition of Novosteo focused on targeted therapeutics to treat rare skeletal diseases, bone fractures and injury. In 2023, the Company decided to discontinue the internal development of NOV004, which was acquired in the acquisition of Novosteo, and terminated the related license.

On October 20, 2023, the Company completed the acquisition of EryDel, a privately held, late-stage biotechnology company with a Phase 3 lead asset, EryDex, that targets the potential treatment of a rare neurodegenerative disease, A-T.

Novosteo Acquisition

On May 9, 2022, the Company entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”) with Novosteo, Quince Merger Sub I, Inc., a Delaware corporation and a wholly owned subsidiary of the Company, Quince Merger Sub II, LLC, a Delaware limited liability company and a wholly owned subsidiary of Company, Novosteo, and Fortis Advisors LLC, a Delaware limited liability company, solely in its capacity as the securityholders’ representative. The transaction closed on May 19, 2022. Pursuant to the terms of the Merger Agreement, at the closing of the Novosteo Acquisition, each share of capital stock of Novosteo that was issued and outstanding immediately prior to the Effective Time was automatically cancelled and converted into the right to receive 0.0911 shares of common stock, par value $0.001 per share, of the Company. The Company issued 5,520,000 shares and assumed 507,108 outstanding Novosteo options after conversion with the awards, retaining the same vesting and other terms and conditions as in effect immediately prior to consummation of the Novosteo Acquisition.

Pursuant to the Merger Agreement, upon the terms and subject to the conditions set forth therein, Merger Sub I merged with and into Novosteo (the “First Merger”), with Novosteo as the surviving entity in the First Merger (the “First Step Surviving Corporation”). Immediately following the First Merger, the First Step Surviving Corporation merged with and into Merger Sub II, with Merger Sub II surviving the Acquisition. Merger Sub II was renamed Novosteo, LLC and is a wholly-owned single member limited liability corporation.

Sale of Legacy Portfolio

On January 27, 2023, we sold our legacy small molecule protease inhibitor portfolio, including COR588, COR388, COR852, and COR803, pursuant to an asset purchase agreement with Lighthouse Pharmaceuticals, Inc., (the "Purchaser" or "Lighthouse") an entity co-founded by Casey Lynch, former chief executive officer of Cortexyme. Lighthouse is a variable interest entity but the Company is not the primary beneficiary.

Upon the consummation of the transaction, we received shares of common stock of Purchaser (“Common Stock”) equal to seven and a half percent (7.5%) of the currently issued and outstanding Common Stock. The issuance is governed by a Stock Issuance Agreement entered into by us and the Purchaser on January 27, 2023 (the “Stock Agreement”).

Pursuant to the terms of the asset purchase agreement, we are eligible to receive milestone payments up to $150 million on a product by product basis for the achievement of certain regulatory approvals and global net sales thresholds. Additionally, we are eligible to receive certain sales-based royalty payments on a product by product basis, ranging from high single-digit to mid-teens of annual net sales related to the two existing clinical stage programs, and low single-digit royalties for the preclinical programs, and certain sublicense income on a product by product basis, either in addition to milestone payments and royalties prior to Phase 2 initiation for COR588 or COR388, or in lieu of milestones payments and royalties after initiation of Phase 2 for COR588 or COR388 or for the preclinical programs.

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EryDel Acquisition

On October 20, 2023, we completed our acquisition of EryDel, a privately held, late-stage biotechnology company with a Phase 3 lead asset, EryDex, that targets the potential treatment of a rare neurodegenerative disease, A-T.

The EryDel Acquisition was completed pursuant to that certain Stock Purchase Agreement, dated as of July 21, 2023. Pursuant to the terms of the Purchase Agreement, the Company issued 6,525,315 shares of its common stock to the EryDel Shareholders. Up to an additional 725,037 shares of the Company's common stock may be issued to the EryDel Shareholders upon the first anniversary of the closing of the EryDel Acquisition. The EryDel Shareholders have a contingent right to receive up to an aggregate of $485.0 million in potential cash payments, comprised of up to $5.0 million upon the achievement of a specified development milestone, $25.0 million at NDA acceptance by the FDA, up to $60.0 million upon the achievement of specified approval milestones, and up to $395.0 million upon the achievement of specified on market and sales milestones, with no royalties paid to EryDel. EryDel is a variable interest entity and the Company is the primary beneficiary and sole shareholder. Refer to Note 15 Business Combination for additional details.

Liquidity and Capital Resources

The Company has incurred losses and negative cash flows from operations since inception and expects to continue to generate operating losses for the foreseeable future. As of December 31, 2023, the Company had an accumulated deficit of $319.6 million. Since inception through December 31, 2023, the Company has funded operations primarily with the net proceeds from the issuance of convertible promissory notes, from the issuance of redeemable convertible preferred stock, from the net proceeds from the IPO and from the net proceeds from the PIPE Financing. As of December 31, 2023, the Company had cash, cash equivalents, and short-term investments of $75.1 million, which it believes will be sufficient to fund its planned operations for a period of at least 12 months from the date of the issuance of the accompanying consolidated financial statements.

Management expects to incur additional losses in the future to fund the Company's operations and conduct product research and development and may need to raise additional capital to fully implement its business plan. The Company may raise additional capital through the issuance of equity securities, debt financings or other sources including out-licensing or partnerships, in order to further implement its business plan. However, if such financing is not available when needed and at adequate levels, the Company will need to reevaluate its operating plan and may be required to delay the development of its product candidates.

Note 2. Summary of Significant Accounting Policies

Basis of Consolidation

The accompanying consolidated financial statements include the accounts of Quince Therapeutics, Inc. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation.

Basis of Presentation

The accompanying consolidated financial statements and the notes thereto have been prepared in accordance with accounting principles GAAP pursuant to the instructions of the SEC on Form 10-K through the rules and interpretive releases of the SEC under federal securities law.

Use of Estimates

The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and expenses, as well as related disclosure of contingent assets and liabilities. The most significant estimates used in the Company’s consolidated financial statements relate to the determination of the fair value of stock-based awards and other issuances, determination of the fair value of identifiable assets and liabilities in connection with the acquisition of Novosteo, Inc. and EryDel S.p.A., including associated intangible assets and goodwill, contingent consideration, accruals for research and development costs, useful lives of long-lived assets, stock-based compensation and related assumptions, the incremental borrowing rate for leases and income tax uncertainties, including a valuation allowance for deferred tax assets, eligibility of expenses for the Australia research and development refundable tax credits, impairment of intangible assets or goodwill; and contingencies. The Company bases its estimates on historical experience and on various other market specific and other relevant assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ materially from the Company’s estimates.

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Foreign Currency Translation and Transactions

The functional currency of the Company’s wholly-owned subsidiaries are the Australian Dollar and the Euro. The Company's financial results and financial position are translated into U.S. dollars using exchange rates at balance sheet dates for assets and liabilities and using average exchange rates for income and expenses. The resulting translation differences are presented as a separate component of accumulated other comprehensive loss, as a separate component of equity.

Foreign currency transactions are translated into the functional currencies using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses, resulting from the settlement of such transactions and from the re-measurement of monetary assets and liabilities denominated in foreign currencies using exchange rates at balance sheet date and non-monetary assets and liabilities using historical exchange rates, are recognized in the consolidated statements of operations and comprehensive income.

Risk and Uncertainties

The Company’s future results of operations involve a number of risks and uncertainties. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, uncertainty of results of clinical trials and reaching milestones, uncertainty of regulatory approval of the Company’s drug candidates, uncertainty of market acceptance of the Company’s drug candidates, competition from substitute products and larger companies, securing and protecting proprietary technology, strategic relationships and dependence on key individuals and sole source suppliers. The Company’s drug candidates will require approvals from the FDA and comparable foreign regulatory agencies prior to commercial sales in their respective jurisdictions. There can be no assurance that any drug candidate will receive the necessary approvals.

Segments

The Company operates and manages its business as one reportable and operating segment, which is the business of developing and commercializing therapeutics. The Company’s chief executive officer, who is the chief operating decision maker, reviews financial information on an aggregate basis for purposes of allocating and evaluating financial performance. All long-lived assets are maintained in Italy.

Business Combinations

The Company evaluates acquisitions of assets and other similar transactions to assess whether or not the transaction should be accounted for as a business combination or asset acquisition by first applying a screen to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If the screen is met, the transaction is accounted for as an asset acquisition. If the screen is not met, further determination is required as to whether or not the Company has acquired inputs and processes that have the ability to create outputs, which would meet the requirements of a business.

The Company accounts for business combinations using the acquisition method pursuant to the FASB ASC Topic 805. This method requires, among other things, that results of operations of acquired companies are included in the Company's financial results beginning on the respective acquisition dates, and that identifiable assets acquired and liabilities assumed are recognized at fair value as of the acquisition date. Intangible assets acquired in a business combination are recorded at fair value using one of three valuation approaches, the income approach, the market approach or the cost approach. The Company reviewed the three valuation approaches and determined the income approach was the most appropriate model to approximate fair value for both the Novosteo and EryDel Acquisitions. The income approach model requires assumptions about the timing and amount of future net cash flows, the cost of capital and terminal values from the perspective of a market participant. Any excess of the fair value of consideration transferred (the “Purchase Price”) over the fair values of the net assets acquired is recognized as goodwill. The fair value of identifiable assets acquired and liabilities assumed in certain cases may be subject to revision based on the final determination of fair value during a period of time not to exceed 12 months from the acquisition date. Legal costs, due diligence costs, business valuation costs and all other acquisition-related costs are expensed when incurred.

Intangible Assets

Intangible assets with a definite useful life are amortized on a straight-line basis over the estimated useful life of the related assets. Intangible assets with an indefinite useful life are not amortized. Intangible assets acquired in a business combination that are used in research and development activities (regardless of whether they have an alternative future use) shall be considered indefinite lived until the completion or abandonment of the associated research and development efforts. Intangible assets acquired in a business combination are initially recorded at fair value. During the period that those assets are considered indefinite lived, they shall not be amortized but shall be tested for impairment. Once the research and development efforts are completed or abandoned, the entity shall determine the useful life of the assets. An intangible asset shall be tested for impairment annually and more frequently if events or

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changes in circumstances indicate that it is more likely than not that the asset is impaired. The Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of the intangible asset is less than its carrying amount, If that is the case, the Company performs a quantitative impairment test, and, if the carrying amount of the Company exceeds its fair value, then the Company will recognize an impairment charge for the amount by which its carrying amount exceeds its fair value, not to exceed the carrying amount of the intangible asset. Qualitative factors to be considered include but are not limited to:

•Cost factors such as increases in raw materials, labor, or other costs that have a negative effect on future expected earnings and cash flows.

•Legal/regulatory factors or progress and results of clinical trials.

•Other relevant entity-specific events such as changes in management, key personnel, strategy, or customers; contemplation of bankruptcy; or litigation that could affect significant inputs used to determine the fair value of the indefinite-lived intangible asset.

•Industry and market considerations such as a deterioration in the environment in which an entity operates, an increased competitive environment.

•Macroeconomic conditions such as deterioration in general economic conditions, limitations on accessing capital, fluctuations in foreign exchange rates, or other developments in equity and credit markets that could affect significant inputs used to determine the fair value of the indefinite-lived intangible asset.

Goodwill

Goodwill represents the excess of the purchase price over the fair value of the net assets acquired as of the acquisition date. Goodwill has an indefinite useful life and is not amortized. The Company reviews its goodwill for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of the Company may exceed its fair value. The Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of the Company is less than its carrying amount, including goodwill. If that is the case, the Company performs a quantitative impairment test, and, if the carrying amount of the Company exceeds its fair value, then the Company will recognize an impairment charge for the amount by which its carrying amount exceeds its fair value, not to exceed the carrying amount of the goodwill.

Contingent Consideration

The Company determines the acquisition date fair value of contingent consideration using a discounted cash flow method, with significant inputs that are not observable in the market and thus represents a Level 3 fair value measurement as defined in ASC Topic 820, Fair Value Measurement. The significant inputs in the Level 3 measurement not supported by market activity included our probability assessments of expected future cash flows related to the Company's acquisition of EryDel in October 2023, during the contingent consideration period, appropriately discounted considering the uncertainties associated with the earnout obligation, and calculated in accordance with the terms of the definitive agreement. The liabilities for the contingent consideration are established at the time of the acquisition and will be evaluated on a quarterly basis based on additional information as it becomes available. Any change in the fair value adjustment is recorded in the earnings of that period. During the year ended December 31, 2023, the Company recorded a $1.6 million adjustment to increase the fair value of its contingent consideration related to the acquisition of EryDel. The adjustment is reflected within operating loss on the consolidated statement of operations and comprehensive loss. Changes in the fair value of the contingent consideration obligations may result from changes in probability assumptions with respect to the likelihood of achieving the various contingent payment obligations. Significant increases or decreases in the inputs noted above in isolation would result in a significantly lower or higher fair value measurement.

Cash, Cash Equivalents and Investments

The Company considers all highly liquid investments with maturities of three months or less when purchased to be cash equivalents. Cash equivalents include marketable securities. Management determines the appropriate classification of its investments in debt securities at the time of purchase and at the end of each reporting period. Investments with original maturities beyond three months at the date of purchase and which mature at, or less than twelve months from the balance sheet date are classified as short-term investments. Investments with a maturity beyond twelve months from the balance sheet date are classified as long-term investments. Collectively, cash equivalents, short-term investments and long-term investments are considered available-for-sale and are recorded at fair value. Unrealized gains and losses are recorded as a component of other comprehensive loss in the consolidated statements of operations and included as a separate component of consolidated statements of stockholders’ equity (deficit). Realized gains and losses are included in interest income in the consolidated statements of operations and comprehensive loss.

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Premiums (discounts) are amortized (accreted) over the life of the related investment as an adjustment to yield using the straight-line interest method. Dividend and interest income are recognized when earned. These amounts are recorded in “interest income” in the consolidated statements of operations and comprehensive loss.

Property and Equipment, Net

Property and equipment are stated at cost and reduced by accumulated depreciation. Depreciation expense is recognized using the straight-line method over the estimated useful lives of the respective assets. Depreciation and amortization begin at the time the asset is placed in service. Maintenance and repairs are charged to expense as incurred, and improvements are capitalized. When assets are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the consolidated balance sheet and any resulting gain or loss is reflected in operations in the period realized.

The useful lives of property and equipment are as follows:

Computer equipment	3 years
Lab equipment	2.5 to 5 years
Finance lease right of use assets	Shorter of estimated useful life or lease term
Leasehold improvement	Shorter of estimated useful life or lease term
Office furniture	4 to 5 years

Concentration of Credit Risk

Cash equivalents, short-term and long-term investments are financial instruments that potentially subject the Company to concentrations of credit risk. The Company invests in money market funds, repurchase agreements, treasury bills and notes, government bonds, and corporate notes. The Company limits its credit risk associated with cash equivalents, short-term and long-term investments by placing them with banks and institutions it believes are highly credit worthy and in highly rated investments. However, cash balances in excess of Federal Deposit Insurance Corporation (FDIC) insured limit of $0.3 million are at risk.

Impairment of Long-Lived Assets

The Company reviews long-lived assets, including property and equipment, for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. An impairment charge would be recorded when estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying amount. Impairment, if any, is assessed using discounted cash flows or other appropriate measures of fair value.

The Company recognized impairment charges of $0.2 million related to the San Diego lease impairment loss and loss on disposal of fixed assets for the year ended December 31, 2022. The Company recognized an impairment charge $0.1 million for the Purdue lease the year ended December 31, 2023.

Leases

The Company determines if an arrangement includes a lease at inception. Right-of-use lease assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. The right-of-use lease asset includes any lease payments made and excludes lease incentives. Incremental borrowing rate is used in determining the present value of future payments. The Company applies a portfolio approach to the property leases to apply an incremental borrowing rate to leases with similar lease terms. The lease terms may include options to extend or terminate the lease. The Company recognizes the options to extend the lease as part of the right-of-use lease assets and lease liabilities only if it is reasonably certain that the option would be exercised. Lease expense for minimum lease payments is recognized on a straight-line basis over the non-cancelable lease term.

Research and Development Expenses

Research and development costs are expensed as incurred. Research and development expenses consist primarily of personnel costs for the Company’s research and product development employees. Also included are non-personnel costs such as professional fees payable to third parties for preclinical and clinical studies and research services, laboratory supplies and equipment maintenance, product licenses, and other consulting costs. The Company estimates preclinical and clinical study and research expenses based on the services performed, pursuant to contracts with CROs that conduct and manage preclinical and clinical studies and research services on its behalf. Expenses related to clinical studies are based on estimates of the services received and efforts

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expended pursuant to contracts with many research institutions, clinical research organizations and other service providers that conduct and manage clinical studies on the Company's behalf. The financial terms of these agreements are subject to negotiation and vary from contract to contract and may result in uneven payment flows. Generally, these agreements set forth the scope of work to be performed at a fixed fee or unit price. Payments under the contracts are mainly driven by time and materials incurred by these service providers. Payments made to third parties under these arrangements in advance of the performance of the related services by the third parties are recorded as prepaid expenses until the services are rendered. Expenses related to clinical studies are generally recorded based on the timing of when services that have been performed on the Company’s behalf by the service providers, clinical trial budgets and in accordance with the contracts and related amendments. The determination of timing involves reviewing open contracts and purchase orders, communicating with applicable personnel to identify the timing of when services that have been performed on the Company’s behalf and estimating the level of service performed and the associated cost incurred for the service when the Company has not yet been invoiced or otherwise notified of actual cost. The Company periodically confirms the accuracy of estimates with the service providers and makes adjustments if necessary. Examples of estimated clinical expenses include:

•fees paid to CROs in connection with clinical studies;

•fees paid to investigative sites in connection with clinical studies;

•fees paid to contract manufacturers in connection with the production of clinical study materials; and

•fees paid to vendors in connection with preclinical development activities.

If the actual timing of the performance of services or the level of effort varies from the original estimates, the Company will adjust the prepaid or accrual accordingly. Payments associated with licensing agreements to acquire exclusive licenses to develop, use, manufacture and commercialize products that have not reached technological feasibility and do not have alternate commercial use are expensed as incurred.

Patent Costs

The Company has no historical data to support a probable future economic benefit for the arising patent applications, filing and prosecution costs. Therefore, patent costs are expensed as incurred.

Stock-Based Compensation

The Company accounts for stock-based compensation arrangements with employees in accordance with ASC 718, Compensation—Stock Compensation. Stock-based awards granted include stock options with service-based vesting. ASC 718 requires the recognition of compensation expense, using a fair value-based method, for costs related to all stock-based payments. The Company’s determination of the fair value of stock options with service-based vesting on the date of grant utilizes the Black-Scholes option-pricing model and is impacted by its common stock price as well as other variables including: but not limited to, expected term that options will remain outstanding, expected common stock price volatility over the term of the option awards, risk-free interest rates and expected dividends. The fair value of a stock-based award is recognized over the period during which an optionee is required to provide services in exchange for the option award, known as the requisite service period (usually the vesting period) on a straight-line basis. Stock-based compensation expense is recognized based on the fair value determined on the date of grant and is reduced for forfeitures as they occur. Stock options exercised are issued new shares of our common stock.

Income Taxes

The Company accounts for income taxes under the asset and liability method. Current income tax expense or benefit represents the amount of income taxes expected to be payable or refundable for the current year. Deferred income tax assets and liabilities are determined based on differences between the consolidated financial statement reporting and tax bases of assets and liabilities and net operating loss and credit carryforwards and are measured using the enacted tax rates and laws that will be in effect when such items are expected to reverse. Deferred income tax assets are reduced, as necessary, by a valuation allowance when management determines it is more likely than not that some or all of the tax benefits will not be realized.

The Company accounts for uncertain tax positions in accordance with ASC 740-10, Accounting for Uncertainty in Income Taxes. The Company assesses all material positions taken in any income tax return, including all significant uncertain positions, in all tax years that are still subject to assessment or challenge by relevant taxing authorities. Assessing an uncertain tax position begins with the initial determination of the position’s sustainability and is measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. As of each balance sheet date, unresolved uncertain tax positions must be reassessed, and the Company will determine whether (i) the factors underlying the sustainability assertion have changed and (ii) the amount of the recognized tax benefit is still appropriate. The recognition and measurement of tax benefits requires significant judgment. Judgments concerning the recognition and measurement of a tax benefit might change as new information becomes available.

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The Company includes any penalties and interest expense related to income taxes as a component of other expense, net and interest expense, net, as necessary.

Comprehensive Loss

The Company is required to report all components of comprehensive loss, including net loss, in the consolidated financial statements in the period in which they are recognized. Comprehensive loss is defined as a change in equity of a business enterprise during a period, resulting from transactions and other events and circumstances from non-owner sources. The Company had an unrealized gain and loss from its available-for sale securities and cumulative translation adjustment during the years ended December 31, 2023 and December 31, 2022, respectively, which are considered other comprehensive loss.

Net Loss per Share

Basic net loss per share is calculated by dividing the net loss by the weighted-average number of common shares outstanding during the period, without consideration for potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares and common share equivalents of potentially dilutive securities outstanding for the period. For purposes of the diluted net loss per share calculation and common stock options are considered to be potentially dilutive securities. Because the Company reported a net loss for the years ended December 31, 2023 and December 31, 2022, and the inclusion of the potentially dilutive securities would be antidilutive, diluted net loss per share is the same as basic net loss per share for both periods.

Recent Accounting Pronouncements Adopted

Financial Instruments—Credit Losses: In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments which amends the principles around the recognition of credit losses by mandating entities incorporate an estimate of current expected credit losses when determining the value of certain assets. The guidance also amends reporting around allowances for credit losses on available-for-sale marketable securities. In November 2019, the FASB issued ASU 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815) and Leases (Topic 842): Effective Dates, which established that a one-time determination of the effective date for ASU 2016-13 would be based on the Company’s SEC reporting status as of November 15, 2019. The Company was a “smaller reporting company” as defined by Item 10 of Regulation S-K, and therefore, ASU 2016-13 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. This guidance helps to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in Topic 326 replace the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The Company has adopted the new guidance as of January 1, 2023, and it did not have a material impact on its consolidated financial statements and related disclosures.

For available-for-sale debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value and recognized in interest and other income, net in the statement of operations and comprehensive loss. If neither criteria is met, the Company evaluates whether the decline in fair value is related to credit-related factors or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. Credit-related impairment losses, limited by the amount that the fair value is less than the amortized cost basis, are recorded through an allowance for credit losses in interest and other income, net.

Any unrealized losses from declines in fair value below the amortized cost basis as a result of non-credit factors are recognized in accumulated other comprehensive loss, net of tax as a separate component of stockholders’ equity, along with unrealized gains. Realized gains and losses and declines in fair value, if any, on available-for-sale securities are included in interest and other income, net in the statement of operations and comprehensive loss.

For purposes of identifying and measuring credit-related impairments, the Company’s policy is to exclude applicable accrued interest from both the fair value and amortized cost basis of the related security. The Company has elected to write-off uncollectible accrued interest receivable balances in a timely manner, which is defined by the Company as when interest due becomes 90 days delinquent. The accrued interest write-off will be recorded by reversing interest income. Accrued interest receivable is recorded in other current assets on the balance sheets.

Recent Accounting Pronouncements Not Yet Adopted

The following are new accounting pronouncements that the Company is evaluating for future impacts on its consolidated financial statements:

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Improvements to Income Tax Disclosures (ASC 740); In December 2023, the FASB issued ASU No. 2023-09, "Improvements to Income Tax Disclosures." This ASU establishes new income tax disclosure requirements in addition to modifying and eliminating certain existing requirements. Under this ASU, entities must consistently categorize and provide greater disaggregation of information in the rate reconciliation. They must also further disaggregate income taxes paid. The ASU is effective in December 2024 under a prospective approach. Early adoption is permitted. Adoption of this ASU is not expected to have a material impact on the Company's consolidated financial statements.

Accounting Standard Update 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”): In November 2023, the FASB issued ASU 2023-07, which is intended to improve reportable segment disclosure requirements, primarily through additional disclosures about significant segment expenses, including for single reportable segment entities. The standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments should be applied retrospectively to all prior periods presented in the financial statements. The Company is evaluating the disclosure requirements related to the new standard.

All other newly issued accounting pronouncements not yet effective have been deemed either immaterial or not applicable.

Note 3. Fair Value Measurements

The fair value of the Company's financial instruments reflects the amounts that the company estimates would receive in connection with the sale of an asset or pay in connection with the transfer of a liability in an orderly transaction between market participants at the measurement date (exit price). The Company discloses and recognizes the fair value of the assets and liabilities using a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). The guidance establishes three levels of the fair value hierarchy as follows:

Level 1 - Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2 - Inputs other than quoted prices that are observable for the assets or liability either directly or indirectly, including inputs in markets that are not considered to be active.

Level 3 - Inputs that are unobservable. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

The Company's financial instruments are carried in the accompanying consolidated balance sheets at amounts that approximate fair value.

The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability. The Company recognizes transfers between levels of the fair value hierarchy as of the end of the reporting period. There were no transfers within the hierarchy during the years ended December 31, 2023 and December 31, 2022.

The Company elected the fair value option for the EIB Loan assumed as part of the EryDel Acquisition. The Company adjusted the EIB Loan to fair value through the change in fair value of debt in the accompanying consolidated statements of operations and comprehensive loss. Subsequent unrealized gains and losses on items for which the fair value option is elected are reported in earnings. The Company will breakout any change in value due to credit loss in accumulated other comprehensive loss. For the year ended December 31, 2023 there was no change in value due to credit loss.

Financial assets and liabilities subject to fair value measurements on a recurring basis and the level of inputs used in such measurements by major security type as of December 31, 2023 and 2022 are presented in the following tables (in thousands):

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	Fair Value Measurements at December 31, 2023
	Total		Level 1		Level 2		Level 3
Assets:
Money market funds	$	4,285	$	4,285	$	—	$	—
Certificates of Deposit		729		—		729		—
Government and agency notes		68,524		3,971		64,553		—
Total assets	$	73,538	$	8,256	$	65,282	$	—
Liabilities:
Accrued earnout		57,706		—		—		57,706
Long-term debt		13,429		—		—		13,429
Total liabilities	$	71,135	$	—	$	—	$	71,135

	Fair Value Measurements at December 31, 2022
	Total		Level 1		Level 2		Level 3
Money market funds	$	10,988	$	10,988	$	—	$	—
Certificates of Deposit		6,102		—		6,102		—
Repurchase Agreements		9,000		—		9,000		—
Corporate notes		12,411		—		12,411		—
Government and agency notes		50,766		—		50,766		—
Municipal notes		506		—		506		—
Total	$	89,773	$	10,988	$	78,785	$	—

The Company classifies corporate notes, certificates of deposit, repurchase agreements, municipal notes, and government and agency notes as Level 2 investments as the Company uses quoted prices for similar assets sourced from certain third-party pricing services. The third-party pricing services generally utilize industry standard valuation models for which all significant inputs are observable, either directly or indirectly, to estimate the price or fair value of the securities. The primary input generally includes reported trades of or quotes on the same or similar securities. The Company does not make additional judgments or assumptions made to the pricing data sourced from the third-party pricing services.

Contingent Consideration

The following table reflects the changes in present value of acquisition related accrued earnouts of contingent consideration liability using significant unobservable inputs (Level 3) for the year ended December 31, 2023 follows:

(in thousands)
Beginning Balance as of January 1, 2023	$	—
Acquisition date fair value of contingent consideration		56,128
Change in fair value of contingent consideration		1,578
Ending Balance as of December 31, 2023	$	57,706

The following table summarizes the quantitative information including the unobservable inputs related to the Company's acquisition related accrued earnout as of December 31, 2023:

Quantitative Information about Level 3 Fair Value Measurements
(in thousands)	Fair Value at		Valuation	Unobservable Input	Range (Input Used)
	December 31,		Technique
	2023
Accrued earnout	$	57,706	Expected present	Probability of achieving earnout	0% - 100%
			value	objectives per the purchase agreement

Long-term Debt

The following table presents the changes in the fair value of the Level 3 EIB Debt:

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(in thousands)
Beginning Balance as of January 1, 2023	$	—
Acquisition of EIB Debt		12,564
Change in fair value		338
Due to foreign currency translation		527
Ending Balance as of December 31, 2023	$	13,429

The following table summarizes the quantitative information including the unobservable inputs related to the Company's acquisition related long term debt as of December 31, 2023:

Quantitative Information about Level 3 Fair Value Measurements
(in thousands)	Fair Value at		Valuation	Unobservable Input	Discount Rate (Input Used)
	December 31,		Technique
	2023
EIB loan	$	13,429	Expected present	Credit quality of company		13	%
			value	and credit spreads for comparable debt

Note 4: Cash, Cash Equivalents and Investments

The following tables categorize the fair values of cash, cash equivalents, short-term investments and long-term investments measured at fair value on a recurring basis on our balance sheets (in thousands):

	December 31,
	2023		2022
Cash and cash equivalents:
Cash	$	1,521	$	3,986
Money market funds		4,285		10,988
Repurchase agreements		—		9,000
Government and agency notes		14,946		20,605
Total cash and cash equivalents	$	20,752	$	44,579
Short-term investments:
Certificates of deposit	$	729	$	5,390
Municipal notes		—		506
Corporate notes		—		12,411
Government and agency notes		53,578		27,295
Total short-term investments	$	54,307	$	45,602
Long-term investments
Certificates of deposit	$	—	$	712
Government and agency notes		—		2,866
Total long-term investments	$	—	$	3,578

The investments are classified as available-for-sale securities. As of December 31, 2023, the weighted average remaining contractual maturities of available-for-sale securities was approximately 2 months. At December 31, 2023 and 2022, the unrealized gain (loss) activity related to the Company’s available-for-sale securities is included in the Company’s accumulated other comprehensive loss. There were no significant realized gains or losses recognized on the sale or maturity of available-for-sale securities for the years ended December 31, 2023 and 2022 and as a result, the Company did not reclassify any amounts out of accumulated other comprehensive loss. Based on the Company’s review of its available-for-sale securities, the Company has a limited number of available-for-sale securities in insignificant loss positions as of December 31, 2023. No other-than-temporary impairments on these securities were recognized for the years ended as of December 31, 2023 and 2022.

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For available-for-sale debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value and recognized in interest and other income, net in the statement of operations and comprehensive loss. If neither criteria is met, the Company evaluates whether the decline in fair value is related to credit-related factors or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. Credit-related impairment losses, limited by the amount that the fair value is less than the amortized cost basis, are recorded through an allowance for credit losses in interest and other income, net.

Any unrealized losses from declines in fair value below the amortized cost basis as a result of non-credit factors are recognized in accumulated other comprehensive loss, net of tax as a separate component of stockholders’ equity, along with unrealized gains. Realized gains and losses and declines in fair value, if any, on available-for-sale securities are included in interest and other income, net in the statement of operations and comprehensive loss.

For purposes of identifying and measuring credit-related impairments, the Company’s policy is to exclude applicable accrued interest from both the fair value and amortized cost basis of the related security. The Company has elected to write-off uncollectible accrued interest receivable balances in a timely manner, which is defined by the Company as when interest due becomes 90 days delinquent. The accrued interest write-off will be recorded by reversing interest income. Accrued interest receivable is recorded in other current assets on the balance sheets.

The following table summarizes the available-for-sale securities (in thousands):

	Fair Value Measurements at December 31, 2023
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Money market funds	$	4,285	$	—	$	—		$	4,285
Certificates of Deposit		735		—		(6	)		729
Government and agency notes		68,528		13		(17	)		68,524
Total cash equivalents and investments	$	73,548	$	13	$	(23	)	$	73,538
Classified as:
Cash equivalents (original maturities within 90 days)								$	19,231
Short-term investments (maturities within 1 year)									54,307
Total cash equivalents and investments								$	73,538

	Fair Value Measurements at December 31, 2022
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Money market funds	$	10,988	$	—	$	—		$	10,988
Certificates of Deposit		6,237		1		(136	)		6,102
Repurchase Agreements		9,000		—		—			9,000
Corporate notes		12,575		—		(164	)		12,411
Government and agency notes		51,020		4		(258	)		50,766
Municipal notes		510		—		(4	)		506
Total cash equivalents and investments	$	90,330	$	5	$	(562	)	$	89,773
Classified as:
Cash equivalents (original maturities within 90 days)								$	40,593
Short-term investments (maturities within 1 year)									45,602
Long-term investments (maturities beyond 1 year)									3,578
Total cash equivalents and investments								$	89,773

The table below summarizes the unrealized losses of the Company's investments in debt securities measured at fair value as of December 31, 2023 (in thousands):

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	Less than twelve months				Twelve months or greater					Total
	Fair value		Gross unrealized loss		Fair value		Gross unrealized loss			Fair value		Gross unrealized loss
Certificates of deposit	$	—	$	—	$	729	$	(6	)	$	729	$	(6	)
Government and agency notes		3,966		—		2,975		(17	)		6,941		(17	)
Total cash equivalents and investments	$	3,966	$	—	$	3,704	$	(23	)	$	7,670	$	(23	)

There were no transfers between Levels 1, 2 or 3 for the period presented.

The table below summarizes the contractual maturities of the Company's investments in debt securities measured at fair value as of December 31, 2023 (in thousands):

	Maturities by Period
	Total		Less Than 1 Year		1-5 Years		6-10 Years		More Than 10 Years
Fair value of debt securities	$	54,307	$	54,307	$	—	$	—	$	—

Note 5: Balance Sheet Components

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following (in thousands):

	December 31,
	2023		2022
Prepaid expenses	$	365	$	223
Prepaid insurance		809		977
Prepaid research and development expenses		133		1,088
Australia research and development refundable tax credit		—		1,003
Short-term Italian research and development refundable tax credit		993		—
Other current assets		81		276
Total prepaid expenses and other current assets	$	2,381	$	3,567

EryDel is eligible to obtain an R&D tax credit as companies in Italy that invest in eligible research and development activities, regardless of the legal form and economic sector in which they operate, can benefit from a R&D tax credit. Such tax credits can only be used to offset payments of certain taxes and contributions (e.g., social contributions, VAT payables, registration fees, income and withholding taxes and all other tax-related items that companies usually pay monthly). The Company recognized reductions to R&D expense of $0.2 million and $0 for the years ended December 31, 2023 and 2022, respectively.

Cortexyme Australia, Pty, Ltd, a wholly-owned subsidiary of the company is eligible to obtain a cash refund from the Australian Taxation Office for eligible R&D expenditures under the Australian R&D Tax Incentive Program (the “Australian Tax Incentive”). The Australian Tax Incentive is recognized as a reduction to R&D expense when there is reasonable assurance that the relevant expenditure has been incurred, the amount can be reliably measured and that the Australian Tax Incentive will be received. The Company recognized reductions to R&D expense of $0 and $0.6 million for the years ended December 31, 2023 and 2022, respectively. The Company received a refundable tax credit of $0.5 million in the year ended December 31, 2023, which reduced prepaid expenses and other current assets by $0.5 million as of December 31, 2023.

Novosteo Pty, Ltd, a wholly-owned subsidiary of Novosteo, LLC, is eligible to obtain a cash refund from the Australian Taxation Office for eligible R&D expenditures under the Australian Tax Incentive as well. The Company received a refundable tax credit of $0.5 million in the first quarter of 2023, which reduced prepaid expenses and other current assets by $0.5 million as of March 31, 2023.

Other Assets

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Other assets consisted of the following (in thousands):

	December 31,
	2023		2022
VAT receivable	$	3,463	$	—
Long-term Italian research and development refundable tax credit		4,993		—
Total other assets	$	8,456	$	—

Assets Held for Sale

Assets held for sale consist of the following (in thousands):

	December 31,
	2023		2022
Assets held for sale	$	10	$	—
Total assets held for sale	$	10	$	—

Property and equipment, net

Property and equipment, net consisted of the following (in thousands):

	December 31,
	2023			2022
Computer equipment	$	36		$	18
Computer software		30			—
Lab equipment		486			415
Finance lease right of use assets		—			124
Leasehold improvement		36			21
Office furniture		153			—
Less: accumulated amortization and depreciation		(507	)		(185	)
Property and equipment, net	$	234		$	393

Depreciation and amortization expense for property and equipment was $0.3 million and $0.2 million for the years ended December 31, 2023 and 2022, respectively.

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):

	December 31,
	2023		2022
Personnel expenses	$	2,340	$	1,130
Professional fees		211		234
Research and development expenses		564		497
Current portion of operating lease liabilities		64		377
Current portion of finance lease liability		—		76
Other		257		185
Total accrued expenses and other current liabilities	$	3,436	$	2,499

Below is the severance accrual activity included in the personnel expenses in the above table related to a cost reduction program during the years ended December 31, 2023 and December 31, 2022 (in thousands):

	For the year ended December 31,
	2023			2022
Beginning accrued severance	$	—		$	—
Incurred during the period		770			3,942
Severance paid during the period		(429	)		(3,942	)
Ending accrued severance	$	341		$	—

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In response to the reprioritization of the Company's pipeline following the decision to discontinue internal development of NOV004 and to pursue out-licensing opportunities, the Board approved a cost reduction program to reorganize operations and allow continued support for the needs of the business. Under the cost reduction program, the Company lowered headcount through a reduction in workforce. The Company recognized the severance of $0.3 million and related expenses of $0.1 million over the requisite employment obligation period. The reduction in force was completed in April 2023.

On August 4, 2023, the Company entered into a transition and separation agreement with Karen Smith, M.D., Ph.D., (the “Separation Agreement”) in connection with Dr. Smith’s transition and departure from the Company as the Company's Chief Medical Officer, effective as of September 1, 2023. Pursuant to the Separation Agreement, the Company is required to pay cash severance, equal to her annual salary, in the aggregate amount of $0.5 million, of which $0.1 million was recognized during the year ended December 31, 2023. The severance is paid on regular payroll schedule through the third quarter of 2024. Additionally, pursuant to the Separation Agreement, the Company paid an additional cash bonus severance payment equal to 100% of Dr. Smith’s target annual bonus opportunity for 2023 on a prorated basis, an additional cash severance payment equal to 12 months’ of the monthly premiums for health care continuation benefits, and provided for 50% accelerated vesting with respect to Dr. Smith’s equity award. The acceleration of 612,141 options and 54,757 RSAs resulted in a stock-based compensation expense of approximately $0.1 million.

Note 6. Leases

Real Estate Operating Leases

In June 2022, the Company entered into a Sublease Agreement to rent office space in South San Francisco, California. The Sublease Agreement commenced on June 18, 2022 and ended on November 30, 2023. The total payments under the term of the lease were approximately $0.3 million. The Company paid a security deposit of $17,000 which is included in Prepaid Expenses and Other Current Assets on the December 31, 2023 consolidated balance sheets and the deposit was refunded in January 2024. At the commencement of the lease, the Company recorded an operating lease right of use asset and liability of $0.3 million. On October 31, 2023, the Company signed a lease agreement for a smaller office space in South San Francisco, California. The total payments under the new lease are expected to be approximately $22,000 for the year. The lease commenced on November 30, 2023 and will end on November 30, 2024.

In October 2022, the Company entered into a lease agreement to rent space in West Lafayette, Indiana. The lease agreement amended the original lease to transfer liability to the Company due to the Novosteo Acquisition. The lease agreement is for 15 months, which commenced on October 1, 2022 and ended on December 31, 2023. The total payments under the term of the lease were approximately $0.2 million. At the commencement of the lease, the Company recorded an operating lease right of use asset and liability of $0.1 million.

In December 2022, the Company entered into an amendment to the lease agreement of the rental space in West Lafayette to rent additional space in the same facility under the same terms as its existing facility lease except the terms of payment. Under the terms of the amendment, the Company will pay rent monthly for the additional space. The Company recorded an operating lease right of use asset and liability of $10,000.

In February 2023, as a result of the decision to discontinue internal development of NOV004 and to pursue out-licensing opportunities, the Company entered into a sublease agreement as the lessor for the majority of the West Lafayette facility. The lease commenced on March 17, 2023 and ended on December 31, 2023. The sublessee paid the Company a security deposit of $6,000 which is included in Accrued expenses and other current liabilities on the December 31, 2023 consolidated balance sheet. Under the terms of the sublease, the Company is entitled to receive a total rental income that is expected to offset rent expense of $57,000. As a result of this decision and the sublease agreement, the Company recorded an impairment loss of approximately $66,000 which is included in other expense, net per the consolidated statement of operations and comprehensive loss for the year ended December 31, 2023.

In October 2023, as part of the EryDel Acquisition the Company acquired operating leases in which the Company recorded an operating lease right of use asset and liability in total of $0.4 million. This includes a lease agreement renting office space in Bresso, in the Province of Milan, Italy. The Lease Agreement commenced on September 1, 2016, and will end on August 31, 2028. At acquisition date, the Company recorded an operating lease right of use asset and liability of $0.1 million. This also includes a lease agreement renting office space in Medolla, in the Province of Modena, Italy. The Lease Agreement commenced on June 18, 2018, with a duration of 12 years, until January 31, 2030. At acquisition date, the Company recorded an operating lease right of use asset and liability of $0.2 million. The acquired lease agreements also included other operating leases two of which are car leases and the other a printing press which in total the Company recorded an operating lease right of use asset and liability of $31,000.

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In January 2024, the above-mentioned Lease Agreement for the office space in Medolla (Italy) was renegotiated. The new Lease Agreement commenced on February 1, 2024, and will end on January 31, 2036, substituting the Lease Agreement commenced in June 2018.

The Company recognizes lease expense on a straight-line basis over the term of its operating lease. As of December 31, 2023, total future rent expense from all real estate operating leases of $0.4 million will be recognized over the remaining term of 29 to 73 months on a straight-line basis over the respective lease period.

Clinical Equipment Financing Lease

As part of the Novosteo Acquisition, the Company acquired a financing lease for certain lab equipment. The Company recognizes the amortization expense in research and development expenses in the consolidated statements of operations and comprehensive loss and recognizes expense on a straight-line basis starting when the equipment is placed into service until the end of the remaining contract term of 18 months. Amortization expense of the financing lease right of use asset for the year ended December 31, 2023 was $6,000. Amortization expense of the financing lease right of use asset for the year ended December 31, 2022 was $50,000.

In February 2023, as a result of the decision to discontinue internal development of NOV004 and to pursue out-licensing opportunities, the Company exercised its purchase option for the financed equipment in order to resell and this equipment is currently held on consignment and is included in assets held for sale on the December 31, 2023 consolidated balance sheet. As a result of this action, the Company reduced the Finance lease ROU asset and Finance lease liability by approximately $70,000.

Supplemental balance sheet information related to leases as follows (in thousands except lease terms and discount rates):

	December 31, 2023			December 31, 2022
Operating lease right of use asset, net	$	385		$	291
Short-term operating lease liability		64			377
Long-term operating lease liability		321			—
	$	385		$	377
Finance lease right of use asset		—			124
Finance lease accumulated amortization		—			(50	)
Total finance lease right of use asset, net	$	—		$	74
Weighted average remaining lease term
Operating leases	5.4 years			0.9 years
Finance leases		—		1.0 year
Weighted average discount rate
Operating leases		7.95	%		5.71	%
Finance leases		—	%		4.45	%
Year ended December 31,	Operating Lease
2024		91
2025		91
2026		88
2027		81
2028		69
Thereafter		48
Total lease payments		469
Less: imputed interest		(83	)
Total remaining lease liability	$	385

Lease costs for the years ended December 31, 2023 and 2022 were approximately:

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	Years ended December 31,
	2023		2022
Lease costs:
Finance lease amortization of right of use assets	$	6	$	50
Operating lease costs		266		572
Short-term lease costs		96		75
Total lease costs	$	368	$	697

Note 7. Long-term Debt

In connection with the acquisition of EryDel on October 20, 2023, the Company assumed an unsecured line of credit between EryDel and the European Investment Bank (the "EIB Loan"). The EIB Loan was amended and restated as of the acquisition date. The EIB Loan provides for maximum borrowings of 30.0 million euro through four tranches; tranche A, 3.0 million euro; tranche B, 7.0 million euro; tranche C, 10.0 million euro; and tranche D, 10.0 million euro. Each tranche is subject to conditions precedent related to the Company’s business and capitalization. The unused portions of each tranche may be canceled by the Company at any time, subject to a cancellation fee. As of December 31, 2023, only tranches A and B have been drawn. All amounts due under tranche A and B are payable on their maturity date of August 2026. Tranche C and D are payable in equal installments of principal together with all amounts outstanding under the tranches on the repayment dates specified in the relevant Disbursement Offer. The first Repayment Date of tranche C shall fall not earlier than twelve months from the Disbursement Date of such tranche. The last Repayment Date of tranche C and tranche D shall fall not later than 5 years from the Disbursement Date of tranche C and tranche D, respectively. The EIB Loan bears interest at fixed rates for each tranche and is payable on the maturity date for each Tranche. The fixed rates range from 7.0% to 9.0% per annum. As of December 31, 2023, principal of 10.0 million euros ($11.0 million) was outstanding on the EIB Loan and it is recorded as Long-term debt on the consolidated balance sheet at fair value with imputed interest of 9.0% included.

The Company may voluntarily prepay, in whole or in part with a prepayment premium. In the event of an occurrence of an event of default or a change in control, as specified in the Debt Agreement, the Company will be required to prepay the outstanding EIB Debt.

The Debt Agreement includes a provision for additional remuneration to be paid in addition to interest. The amount of additional remuneration to be paid is equal to 2.5% of revenue up to 125.0 million euros, plus 1.85% of revenue between 125.0 and 250.0 million euros, plus 1.0% of revenue in excess of 250.0 million euros, multiplied by a varying percentage based on how many tranches have been drawn. The varying percentage is equal to 30.0% in the event tranche A has been drawn, 50.0% in the event tranche A and B have been drawn, 80.0% in the event tranche A, B and C have been drawn, and 100.0% in the event all four tranches have been drawn. The additional remuneration is payable for seven years, during the period January 1, 2026, through December 31, 2032. In the event of an occurrence of an event of default or prepayment, the Company may be required to pay an additional remuneration buyout fee.

The Company elected to account for the EIB Loan at fair value, which requires the EIB Loan to be recorded at fair value at issuance and at the end of each reporting period. Gains or losses upon remeasurement are to be recorded in other income (expense) in the consolidated statements of operations and comprehensive income. The Company presents separately in other comprehensive income the portion of the total change in the fair value of the EIB Loan that results from a change in instrument-specific credit risk. The EIB Loan’s fair value at the date it was assumed adjusted its carrying value based on using a discounted cash flow analysis with a discount rate based on a yield curve that was adjusted for credit rating. The change in fair value at December 31, 2023 was determined using a discounted cash flow analysis discounted at the market yield. The significant inputs used to measure the market yield at December 31, 2023 relative to the date the EIB Loan was assumed was the change in credit quality of the Company, the change in credit spreads for comparable debt instruments, and the change in the risk-free rate. As of December 31, 2023, the fair value of the EIB Loan is valued at $13.4 million, which includes a fair value adjustment of $0.3 million and foreign currency translation of $0.5 million, from the amount recorded at fair value on the date of the EryDel Acquisition of $12.6 million.

Future minimum principal payments, as of December 31, 2023 are as follows (in thousands):

Year Ending December 31,	Amount
2024	$	—
2025		—
2026		11,053
2027 and thereafter		—
Total future minimum payments		11,053
Imputed interest		2,376
Total Debt as of December 31, 2023	$	13,429

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Note 8. Commitments and Contingencies

Legal Matters

The Company’s industry is characterized by frequent claims and litigation, including claims regarding intellectual property. As a result, the Company may be subject to various legal proceedings from time to time. The results of any future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors. Management is not aware of any pending or threatened litigation.

Indemnification

As permitted under Delaware law and in accordance with the Company’s bylaws, the Company indemnifies its officers and directors for certain events or occurrences while the officer or director is or was serving in such capacity. The Company is also party to indemnification agreements with its directors. The Company believes the fair value of the indemnification rights and agreements is minimal. Accordingly, the Company has not recorded any liabilities for these indemnification rights and agreements as of December 31, 2023 and 2022.

Contingencies

From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of its business activities. The Company accrues a liability for such matters when it is probable that future expenditures will be made, and such expenditures can be reasonably estimated.

Note 9. Equity Incentive Plans

The Company operates three stock plans as of December 31, 2023.

•2019 Equity Incentive Plan (Quince)

•2019 Equity Incentive Plan (Novosteo)

•2022 Inducement Plan (Quince)

2019 Equity Incentive Plan (Quince)

On December 4, 2014, the Company’s stockholders approved the 2014 Stock Plan (“2014 Plan”), and on April 25, 2019 amended, restated and re-named the 2014 Plan as the 2019 Equity Incentive Plan (the “Quince 2019 Plan”), which became effective as of May 7, 2019, the day prior to the effectiveness of the registration statement filed in connection with the IPO. The remaining shares available for issuance under the 2014 Plan were added to the shares reserved for issuance under the Quince 2019 Plan.

The Quince 2019 Plan provides for the grant of stock options (including incentive stock options and non-qualified stock options), stock appreciation rights, restricted stock, RSUs, performance units, and performance shares to the Company’s employees, directors, and consultants. The maximum aggregate number of shares that may be issued under the Quince 2019 Plan is 10,036,489 shares of the Company’s common stock. In addition, the number of shares available for issuance under the Quince 2019 Plan will be annually increased on the first day of each of its fiscal years beginning with fiscal 2020, by an amount equal to the least of (i) 2,146,354 shares of common stock; (ii) 4% of the outstanding shares of its common stock as of the last day of its immediately preceding fiscal year; and (iii) such other amount as the Company’s Board of Directors may determine.

The Quince 2019 Plan may be amended, suspended or terminated by the Company’s Board of Directors at any time, provided such action does not impair the existing rights of any participant, subject to stockholder approval of any amendment to the Quince 2019 Plan as required by applicable law or listing requirements. Unless sooner terminated by the Company’s Board of Directors, the 2019 Plan will automatically terminate on April 23, 2029.

Stock Options

Stock options under the 2019 Plan may be granted for periods of up to 10 years and at prices no less than 100% of the estimated fair value of the shares on the date of grant as determined by the board of directors. If, at the time of grant, the optionee directly owns stocks representing more than 10% of the voting power of all our outstanding capital stock, the exercise price for these options must be at least 110% of the fair value of the underlying common stock. Stock options granted to employees and non-employees generally have a maximum term of ten years and vest over four years from the vesting commencement date, of which 25%

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vest on the one-year anniversary of the vesting commencement date, and 75% vest in equal monthly installments over the remaining three years or monthly vesting over 3 to 4 years. We may grant options with different vesting terms from time to time. Unless an employee's or non-employee's termination is due to cause, disability or death, upon termination of service, any unexercised vested options will be forfeited at the end of the three months from the termination date or expiration of the option, whichever is earlier.

Activity for service-based stock options under the Quince 2019 Plan is as follows:

	Number of Options and Unvested Shares			Weighted Average Exercise Price		Weighted average remaining contractual life (years)		Aggregate intrinsic value
								(In thousands)
Balance at December 31, 2021		5,571,293		$	28.70		8.26	$	15,687
Options granted		2,051,058			8.13	—		—
Options exercised		(102,152	)		1.45	—		—
Options cancelled / forfeited		(4,200,488	)		29.30	—		—
Balance at December 31, 2022		3,319,711		$	16.07		4.77	$	65
Options granted		3,346,958			1.03	—		—
Options exercised		(258,705	)		0.42	—		—
Options cancelled / forfeited		(2,140,786	)		16.52	—		—
Balance at December 31, 2023		4,267,178		$	5.00		8.85	$	197
Options vested and expected to vest as of December 31, 2023		4,267,178			5.00		8.85		197
Options exercisable at December 31, 2023		1,109,464		$	14.09		7.32	$	34

Aggregate intrinsic value represents the difference between the Company’s estimated fair value of its common stock as of their respective balance sheet dates and the exercise price of outstanding options. The total intrinsic value of the Quince 2019 Plan options exercised was $0.3 million and $1.4 million for the years ended December 31, 2023 and 2022, respectively. The weighted-average grant date fair value of options granted during the years ended December 31, 2023 and 2022 was $0.82 and $6.05 per share, respectively. The total estimated grant date fair value of options vested during each of the years ended December 31, 2023 and 2022 was $11.1 million and $31.8 million, respectively.

In 2023 and 2022 , the Company recognized $2.6 million and $11.4 million, respectively, of stock-based compensation expense related to options granted to employees and non-employees. The compensation expense is allocated on a departmental basis, based on the classification of the option holder. No income tax benefits have been recognized in the consolidated statement of operations and comprehensive loss for stock-based compensation arrangements. As of December 31, 2023, total unamortized employee stock-based compensation was $4.0 million, which is expected to be recognized over the remaining estimated vesting period of 2.55 years.

Restricted Stock Units

RSUs are share awards that entitle the holder to receive freely tradable shares of the Company’s common stock upon vesting. The fair value of RSUs is based upon the closing sales price of the Company’s common stock on the grant date. RSUs granted to employees generally vest over a 2–4 year period.

The following table summarizes activity under the Company’s RSUs from the Quince 2019 Plan and related information:

	Restricted Stock Units Outstanding
	Number of Shares			Weighted Average Grant Date Fair Value
Unvested - December 31, 2022		30,876		$	4.30
RSUs granted	—			—
RSUs vested		(10,200	)		4.30
RSUs cancelled		(19,188	)		4.30
Unvested - December 31, 2023		1,488		$	4.30

The fair value of the RSUs is determined on the grant date based on the fair value of the Company’s common stock. The fair value of the RSUs is recognized as expense ratably over the vesting period of two years. The total grant date fair value of the

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RSUs vested during the years ended December 31, 2023 and 2022 was $44,000 and $1,700,000, respectively. The aggregate intrinsic value of the shares of the RSUs vested during the years ended December 31, 2023 and December 31, 2022 were $11,000 and $1.1 million, respectively.

For the years ended December 31, 2023 and 2022, the Company recognized stock-based compensation expense of $37,000 and $1,337,000, respectively, related to these RSUs. As of December 31, 2023, the total unamortized stock-based compensation related to RSUs was $4,000, which is expected to be recognized over the remaining estimated vesting period of 0.17 years.

2019 Equity Incentive Plan (Novosteo)

On May 19, 2022, in accordance with the term of the Merger Agreement, the Company assumed the 2019 Novosteo Equity Incentive Plan (the "2019 Novosteo Plan"). The 2019 Novosteo Plan provides for the grant of stock options (including incentive stock options and non-qualified stock options), stock appreciation rights, restricted stock, RSUs, performance units, and performance shares to the Novosteo legacy employees. On the closing date, each outstanding Novosteo stock option granted under Novosteo’s equity compensation plans was converted into a corresponding stock option with the number of shares underlying such option and the applicable exercise price adjusted based and adjusted into the right to purchase 0.0911 shares of common stock. Each such converted stock option will continue to be subject to substantially the same terms and conditions as applied to the corresponding Novosteo stock option prior to the Acquisition. The maximum aggregate number of shares that may be issued under the 2019 Novosteo Plan is 544,985 shares of the Company’s common stock.

The 2019 Novosteo Plan may be amended, suspended or terminated by the Board at any time, provided such action does not impair the existing rights of any participant, subject to stockholder approval of any amendment to the 2019 Novosteo Plan as required by applicable law or listing requirements. Unless sooner terminated by the Board, the 2019 Novosteo Plan will automatically terminate on May 20, 2029.

Stock options under the 2019 Novosteo Plan may be granted for periods of up to 10 years and at prices no less than 100% of the estimated fair value of the shares on the date of grant as determined by the board of directors. If, at the time of grant, the optionee directly owns stocks representing more than 10% of the voting power of all our outstanding capital stock, the exercise price for these options must be at least 110% of the fair value of the underlying common stock. Stock options granted to employees and non-employees generally have a maximum term of ten years and vest over four years from the vesting commencement date, of which 25% vest on the one-year anniversary of the vesting commencement date, and 75% vest in equal monthly installments over the remaining three years or monthly vesting over 3 to 4 years. We may grant options with different vesting terms from time to time. Unless an employee's or non-employee's termination is due to cause, disability or death, upon termination of service, any unexercised vested options will be forfeited at the end of the three months from the termination date or expiration of the option, whichever is earlier.

Activity for service-based stock options under the 2019 Novosteo Plan is as follows:

	Number of Options and Unvested Shares			Weighted Average Exercise Price		Weighted average remaining contractual life (years)		Aggregate intrinsic value
								(In thousands)
Balance at December 31, 2021		—		$	—		—	$	—
Options assumed		507,648			0.55		—		—
Options exercised		—			—		—		—
Options cancelled / forfeited		(4,543	)		0.55		—		—
Balance at December 31, 2022		503,105		$	0.55		9.23	$	44
Options granted		—			—		—		—
Options exercised		(105,808	)		0.55		—		40
Options cancelled / forfeited		(86,866	)		0.55		—		—
Balance at December 31, 2023		310,431		$	0.55		8.23	$	155
Options vested and expected to vest as of December 31, 2023		310,431			0.55		8.23		155
Options exercisable as of December 31, 2023		135,812		$	0.55		8.23	$	68

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For the years ended December 31, 2023 and 2022, the Company recognized stock-based compensation expense of $275,000 and $245,000, respectively, related to options granted to employees and non-employees for the 2019 Novosteo plan. The compensation expense is allocated on a departmental basis, based on the classification of the option holder. No income tax benefits have been recognized in the consolidated statement of operations and comprehensive loss for stock-based compensation arrangements. As of December 31, 2023, total unamortized employee stock-based compensation was $0.4 million, which is expected to be recognized over the remaining estimated vesting period of 2.23 years.

The total aggregate intrinsic value of the Novosteo 2019 Plan options exercised was $427,000 and $0 for the years ended December 31, 2023 and 2022. The weighted-average grant date fair value of options granted during the years ended December 31, 2023 and 2022 was $0 and $2.51 per share, respectively. The total estimated grant date fair value of options vested during the years ended December 31, 2023 and 2022 was $0.3 million and $0.3 million, respectively.

On May 19, 2022, in accordance with the term of the Merger Agreement, the Company assumed a number of RSAs agreements with certain employees. Each outstanding Novosteo RSA was converted into a corresponding RSA with the number of shares underlying such RSA adjusted into 0.0911 shares of common stock. Each such converted RSA will continue to be subject to substantially the same terms and conditions as applied to the corresponding Novosteo RSA prior to the Acquisition.

Restricted Stock Awards

	Restricted Stock Awards Outstanding
	Number of Shares			Weighted Average Grant Date Fair Value
Unvested - December 31, 2022		427,401		$	3.30
RSAs issued	—			—
RSAs vested		(188,344	)		3.30
RSAs cancelled		(63,293	)		3.30
Unvested - December 31, 2023		175,764		$	9.90

For the years ended December 31, 2023 and 2022, the Company recognized stock-based compensation expense of $496,000 and $338,000, respectively, related to restricted stock awards. The compensation expense is allocated on a departmental basis, based on the classification of the option holder. No income tax benefits have been recognized in the consolidated statement of operations and comprehensive loss for stock-based compensation arrangements. As of December 31, 2023, total unamortized employee stock-based compensation was $0.6 million, which is expected to be recognized over the remaining estimated vesting period of 1.74 years.

2022 Inducement Plan

On May 9, 2022, the Company's board of directors approved 4,000,000 shares of the Registrant’s common stock that may be offered or issued under the Quince Therapeutics, Inc. 2022 Inducement Plan. The 2022 Inducement Plan was adopted by the independent members of the Board without stockholder approval pursuant to Rule 5635(c)(4) of the Nasdaq Listing Rules. In accordance with rule awards under those plans may only be made to an employee who has not previously been an employee or member of the Board or of any board of directors of any parent or subsidiary of the Company, or following a bona fide period of non-employment by the Company or a parent or subsidiary, if he or she is granted such award in connection with his or her commencement of employment with the Company or a subsidiary and such grant is an inducement material to his or her entering into employment with the Company or such subsidiary. The terms and conditions of the 2022 Inducement Plan are substantially similar to those of the Quince 2019 Plan.

Options under the 2022 Inducement Plan may be granted for periods of up to 10 years at prices no less than 100% of the estimated fair value of the shares on the date of grant as determined by the board of directors. Options granted to employees may have different performance goals or other vesting provisions (including continued employment) in accordance with Award Agreement. Unless an employee's termination service is due to disability or death, upon termination of service, any unexercised vested options will be forfeited at the end of the three months or expiration of the option, whichever is earlier.

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Activity for service-based stock options under the 2022 Inducement Plan is as follows:

	Number of Options and Unvested Shares			Weighted Average Exercise Price		Weighted average remaining contractual life (years)		Aggregate intrinsic value
								(In thousands)
Balance at December 31, 2021		—		$	—		—	$	—
Options granted		3,744,255			2.98		—		—
Options exercised		—			—		—		—
Options cancelled / forfeited		(2,000	)		2.98		—		—
Balance at December 31, 2022		3,742,255		$	2.98		9.39	$	—
Options granted		—			—		—		—
Options exercised		—			—		—		—
Options cancelled / forfeited		(1,408,949	)		2.98		—		—
Balance at December 31, 2023		2,333,306		$	2.98		8.39	$	—
Options vested and expected to vest as of December 31, 2023		2,333,306			2.98		8.39		—
Options exercisable as of December 31, 2023		923,599		$	2.98		8.39	$	—

For the years ended December 31, 2023 and 2022, the Company recognized stock-based compensation expense of $1,802,000 and $1,293,000, respectively, related to options granted to employees and non-employees for the 2022 Inducement plan. The compensation expense is allocated on a departmental basis, based on the classification of the option holder. No income tax benefits have been recognized in the consolidated statement of operations and comprehensive loss for stock-based compensation arrangements. As of December 31, 2023, total unamortized employee stock-based compensation was $3.2 million, which is expected to be recognized over the remaining estimated vesting period of 2.39 years.

The total aggregate intrinsic value of the 2022 Inducement Plan options exercised was $0 for both the years ended December 31, 2023 and 2022. The weighted-average grant date fair value of options granted during the years ended December 31, 2023 and 2022 was $0.00 and $2.26 per share, respectively. The total estimated grant date fair value of options vested during the years ended December 31, 2023 and 2022 was $2.1 million and $0, respectively.

Stock-Based Compensation Expense

The following table summarizes employee and non-employee stock-based compensation expense for the years ended December 31, 2023 and 2022 and the allocation within the consolidated statements of operations and comprehensive loss (in thousands):

	2023		2022
General and administrative expense	$	4,003	$	10,225
Research and development expense		1,217		6,393
Total stock-based compensation	$	5,220	$	16,618

The Company estimates the fair value of its service-based stock option awards utilizing the Black-Scholes option pricing model, which is dependent upon several variables, such as expected term, volatility, risk-free interest rate, and expected dividends. Each of these inputs is subjective and generally requires significant judgment to determine. Stock-based compensation is measured at the grant date based on the fair value of the award and is recognized as expense, over the requisite service period, which is generally the vesting period of the respective award. The Company recognizes compensation on a straight-line basis over the requisite vesting period for each award. Forfeitures are recognized as they occur. The following weighted average assumptions were used to calculate the fair value of stock-based compensation for the years ended December 31, 2023 and 2022:

	2023			2022
Expected volatility		106.36	%		89.98	%
Expected dividend yield		—	%		—	%
Expected term (in years)		6.22			6.23
Risk-free interest rate		4.01	%		2.67	%

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Expected Term — The Company has opted to use the “simplified method” for estimating the expected term of options, whereby the expected term equals the arithmetic average of the vesting term and the original contractual term of the option (generally 10 years). The expected term was estimated using the simplified method for employee stock options since the Company does not have adequate historical exercise data to estimate the expected term.

Expected Volatility—Due to the Company’s limited operating history and a lack of company specific historical and implied volatility data, the Company has based its estimate of expected volatility on the historical volatility of its own stock and the stock of companies within its defined peer group. The historical volatility data was computed using the daily closing prices for the selected companies’ shares during the equivalent period of the calculated expected term of the stock-based awards.

Risk-Free Interest Rate — The risk-free rate assumption is based on the U.S. Treasury instruments with maturities similar to the expected term of the Company’s stock options.

Expected Dividend — The Company has not issued any dividends in its history and does not expect to issue dividends over the life of the options and therefore has estimated the dividend yield to be zero.

Fair value of Common Stock — The board of directors uses the closing price of stock on the date of grant to determine the fair value. The board of directors intends all options granted to be exercisable at a price per share not less than the estimated per share fair value of common stock underlying those options on the date of grant.

Employee Stock Purchase Plan

On April 24, 2019, the Company’s Board of Directors adopted its 2019 Employee Stock Purchase Plan (“2019 ESPP”), which was subsequently approved by the Company’s stockholders and became effective on May 7, 2019, the day immediately prior to the effectiveness of the registration statement filed in connection with the IPO. The 2019 ESPP is intended to qualify as an “employee stock purchase plan” within the meaning of Section 423 of the Code for U.S. employees. In addition, the 2019 ESPP authorizes grants of purchase rights that do not comply with Section 423 of the Code under a separate non-423 component for non-U.S. employees and certain non-U.S. service providers. The Company has reserved 1,494,530 shares of common stock for issuance under the 2019 ESPP. In addition, the number of shares reserved for issuance under the 2019 ESPP will be increased automatically on the first day of each fiscal year for a period of up to ten years, starting with the 2020 fiscal year, by a number equal to the lesser of: (i) 536,589 shares; (ii) 1% of the shares of common stock outstanding on the last day of the prior fiscal year; or (iii) such lesser number of shares determined by the Company’s Board of Directors. The 2019 ESPP is expected to be implemented through a series of offerings under which participants are granted purchase rights to purchase shares of the Company’s common stock on specified dates during such offerings. The Company has not yet approved an offering under the 2019 ESPP.

Note 10. Common Stock

Equity Transactions

On December 23, 2021, the Company entered into an Open Market Sales Agreement, with Jefferies, whereby the Company may sell up to $150.0 million in aggregate proceeds of common stock from time to time, through Jefferies as our sales agent. During the years ended December 31, 2023 and 2022, the Company sold zero and 51,769 shares of common stock, respectively, under this agreement and received net proceeds of $0 and $0.6 million, respectively.

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Common Stock

The Company had reserved shares of common stock for future issuance as follows:

	December 31,
	2023		2022
Options issued and outstanding under the Quince 2019 Stock Plan		4,267,178		3,319,711
Shares available for issuance under Quince 2019 Stock Plan		4,005,784		3,747,309
Shares available for issuance under the Employee Stock Purchase Plan		1,494,530		1,133,165
Options issued and outstanding under the Novosteo 2019 Plan		310,431		503,105
Shares available for issuance under Novosteo 2019 Plan		246,797		41,880
Options issued and outstanding under the 2022 Inducement Plan		2,333,306		3,742,255
Shares available for issuance under 2022 Inducement Plan		1,666,694		257,745
Total		14,324,720		12,745,170

The Company is authorized to issue 100,000,000 shares of common stock with a par value of $0.001 per share. Each share of common stock is entitled to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when and if declared by the board of directors, subject to the prior rights of holders of any preferred stock that may be outstanding at the time. The Company has never declared any dividends on common stock. As of December 31, 2023 and 2022, the Company had 42,973,215 and 36,136,480 shares of common stock issued and outstanding, respectively.

In addition, in April 2023, we implemented the Rights Agreement, also called a “poison pill,” that may have the effect of discouraging or preventing a change of control by, among other things, making it uneconomical for a third party to gain control of us through open market accumulation of shares without paying all stockholders an appropriate control premium or without the consent of our board of directors. The Rights will expire on April 5, 2024, unless the Rights are earlier redeemed or exchanged by the Company.

Note 11. Related Party Transactions

David Lamond, Chairperson of the Board of Quince Therapeutics, Inc. was a director and an equity holder in Novosteo which Quince acquired on May 19, 2022. The shares of Novosteo beneficially owned by Mr. Lamond were automatically cancelled and converted into the right to receive shares of Quince common stock in accordance with the terms of the Merger Agreement. The respective boards of directors of Quince and Novosteo approved the Merger Agreement, and the Novosteo’s stockholders adopted the Merger Agreement upon recommendation of the Novosteo board of directors. Mr. Lamond was not part of either company's special committees that evaluated the Novosteo Acquisition and recused himself from board meetings where the Novosteo Acquisition was discussed.

Dirk Thye, M.D., Chief Executive Officer, is an investor in Morphimmune Inc. and Philip Low, Ph.D, a former Board member of Quince Therapeutics, Inc., is a co-founder and Board member of Morphimmune Inc. During the year ended December 31, 2023, the Company sold certain lab equipment to Morphimmune Inc. for $80,000 as well as signed a sublease with Morphimmune as the sublessee with total payments of approximately $57,000 for the lease term of March 17, 2023 through December 31, 2023.

Note 12. Income taxes

The components of the Company's loss before income taxes were as follows (in thousands):

	Year ended December 31,
	2023			2022
United States	$	(27,375	)	$	(48,191	)
International		(4,207	)		(3,753	)
Total	$	(31,582	)	$	(51,944	)

The components of the Company's benefit for income taxes were as follows:

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		Year ended December 31,
(in thousands)		2023				2022
Current expense (benefit):
Federal	$		—		$		—
State			—				—
Foreign			61				—
Total current expense (benefit):			61				—
Deferred expense (benefit):
Federal			(248	)			284
State			—				—
Foreign			(10	)			—
Total deferred expense (benefit):			(258	)			284
Total income tax expense (benefit)	$		(197	)	$		284

The provision for income taxes differs from the amount expected by applying the federal statutory rate to the loss before taxes as follows:

	Year ended December 31,
	2023				2022
Federal statutory income tax rate		21.00		%		21.00		%
State income taxes		4.47				0.89
Income tax credits		1.07				1.49
Stock based compensation		(26.35	)			(0.82	)
Non-deductible expenses and others		(1.25	)			(3.38	)
Change in valuation allowance		1.68				(18.63	)
		0.62		%		0.55		%

As of December 31, 2023 and 2022, the components of the Company’s deferred tax assets are as follows (in thousands):

	Year ended December 31,
	2023			2022
Deferred tax asset:
Federal and State net operating loss carryforwards	$	81,881		$	49,481
Stock based compensation		2,401			9,667
Other accruals		527			515
Capitalized research and development expense		3,220			3,094
Tax credits		8,343			7,970
Disallowed interest expense carryforward		1,043			—
Gross deferred tax asset		97,415			70,727
Valuation allowance		(85,111	)		(69,692	)
Total deferred tax assets		12,304			1,035
Deferred tax liabilities:
Property and equipment		—			(11	)
Capitalized leases		—			(32	)
IP R&D		(17,608	)		(1,239	)
Gross deferred tax liabilities		(17,608	)		(1,282	)
Net deferred tax liabilities	$	(5,304	)	$	(247	)

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Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, and (b) operating losses and tax credit carryforwards.

The Company’s accounting for deferred taxes involves the evaluation of a number of factors concerning the realizability of its net deferred tax assets. The Company primarily considered such factors as its history of operating losses, the nature of the Company’s deferred tax assets, and the timing, likelihood and amount, if any, of future taxable income during the periods in which those temporary differences and carryforwards become deductible. At present, the Company does not believe that it is more likely than not that the deferred tax assets will be realized; accordingly, a full valuation allowance has been established and a deferred tax liability has been recorded as shown in the accompanying balance sheets. The valuation allowance increased by approximately $15.4 million and $11.1 million, respectively for the years ended December 31, 2023 and 2022.

At December 31, 2023, the Company has federal net operating loss carryforwards of approximately $238.4 million of which $222.6 million will not expire and $15.8 million begin expiring in 2034. The Company also has state net operating loss carryforwards of approximately $34.2 million which begin to expire in 2034. Additionally, the Company has federal tax credits of approximately $9.8 million which begin to expire in 2036 and state tax credits of approximately $2.9 million which do not expire.

At December 31, 2023, the Company has foreign net operating loss carryforwards, primarily in Italy, of approximately $121.1 million, which have no expiration date.

Use of the net operating loss and credit carryforwards may be subject to a substantial annual limitation due to the ownership change provisions of U.S. tax law and similar state provisions. The annual limitation may result in the expiration of net operating losses and credits before use.

Pursuant to the Code Sections 382 and 383, annual use of a company’s U.S. NOL and research and development credit carryforwards may be limited if there is a cumulative change in ownership of greater than 50% within a three-year period. The amount of the annual limitation is determined based on the value of the Company immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years. If limited, the related tax asset would be removed from the deferred tax asset schedule with a corresponding reduction in the valuation allowance. The Company has completed such an analysis pursuant to Sections 382 and 383 in prior years which determined that ownership changes occurred on December 22, 2015 and May 13, 2019, which had no impact on the NOLs available to offset future income. The Company has rolled forward the analysis through December 31, 2023 and no additional ownership changes have occurred.

The Company follows the provisions of the FASB ASC 740-10, Accounting for Uncertainty in Income Taxes. ASC 740-10 prescribes a comprehensive model for the recognition, measurement, presentation and disclosure in the consolidated financial statements of uncertain tax positions that have been taken or expected to be taken on a tax return. It is the Company’s policy to include penalties and interest related to income tax matters in income tax expense.

The Company is subject to taxation in the United States, Australia, and Italy. Because of the net operating loss and research credit carryforwards, all of the Company’s tax years, from 2013 to 2023, remain open to U.S. federal, California, other state tax examinations. The Company's Australian subsidiaries remain open to examination from their inception to 2023. The Company’s Italian subsidiary remain open to examination from their inception to 2023. The majority of our unrecognized tax benefits would not impact our effective tax rate due to a valuation allowance offsetting our deferred tax assets. The impact on our effective tax rate of recognizing unrecognized tax benefits is approximately $0.5 million. There were interest and penalties of $0.1 million and $0 accrued at December 31, 2023 and 2022, respectively. The Company does not expect that our uncertain tax positions will materially change in the next twelve months.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):

	Year ended December 31,
	2023		2022
Beginning balance	$	3,688	$	3,249
Additions for tax positions taken in a prior year		200		—
Additions for tax positions taken in a current year		451		439
Ending balance	$	4,339	$	3,688

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Note 13. Net Loss per Share

The following table sets forth the computation of basic and diluted net loss per share (in thousands except for share and per share amounts):

	December 31,
	2023			2022
Numerator:
Net loss	$	(31,385	)	$	(51,660	)
Denominator:
Weighted average common shares outstanding		37,237,149			33,496,534
Net loss per share, basic and diluted	$	(0.84	)	$	(1.54	)

The following outstanding potentially dilutive securities were excluded from the computation of diluted net loss per share for the periods presented because including them would have been antidilutive:

	December 31,
	2023		2022
Stock options issued and outstanding		6,910,915		7,565,071
Restricted stock units		1,488		30,876
Restricted stock awards		175,764		427,401
Total		7,088,167		8,023,348

Note 14. Employee Benefit Plan

The Company sponsors a 401(k) defined contribution plan for its US employees. This plan provides for pre-tax and post-tax contributions for all US employees. Employee contributions are voluntary. Employees may contribute up to 100% of their annual compensation to this plan, as limited by an annual maximum amount as determined by the Internal Revenue Service. The Company may match employee contributions, and may make profit sharing contributions, in amounts to be determined at the Company’s sole discretion. The amount of contributions that the Company made to the 401(k) Plan during the years ended December 31, 2023 and 2022 was $0.1 million and $0.2 million, respectively.

The Company has defined benefit plans, regulated by the Italian laws in which the Company’s non-US employees participate in. The benefits due to employees under the defined benefit plans are calculated based on the employee compensation and the duration of the employment relationship and are paid to the employee upon termination of the employment relationship or retirement. The costs of the defined benefit plans reported in the Company’s consolidated statements of operations and comprehensive loss is determined by an actuarial calculation performed on an annual basis. The actuarial valuation is performed using the “Projected Unit Credit Method” based on the employees’ expected date of separation or retirement.

Note 15. Business Combination

EryDel business combination

On October 20, 2023, the Company completed its acquisition of EryDel, a privately held, late-stage biotechnology company with a lead Phase 3 lead asset, EryDex, that targets the potential treatment of a rare neurodegenerative disease, A-T. The acquisition will drive Quinces’ next stage of growth, as EryDel’s proprietary drug-device combination technology platform and promising late-stage clinical asset represents an opportunity for the Company to expand into several debilitating rare diseases where chronic corticosteroid treatment is the standard of care – or could be in the absence of long-term corticosteroid toxicity. The Company accounted for this acquisition in accordance with ASC 805, Business Combinations, which requires the assets acquired and the liabilities assumed to be measured at fair value at the date of the acquisition. As part of the acquisition of EryDel, the Company recorded deferred tax liability of $5.1 million and uncertain tax position liability of $0.5 million against Goodwill.

The acquisition date fair value of the consideration transferred for EryDel was approximately $66.9 million, which consisted of the following (in thousands):

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	Fair Value of
	Consideration
Cash	$	2,615
Quince Therapeutics common stock (7,250,352 shares)		7,164
Contingent consideration		56,128
Settlement of preexisting notes receivable		1,000
Fair value of total consideration transferred	$	66,907

The fair value of the Company’s common stock was determined based on the closing market price of the Company’s common stock of $0.989 per share on the acquisition date. The aggregate stock consideration consists of 6,525,315 shares of Company’s common stock issued at closing and 725,037 shares of common stock (the “Indemnity Holdback Shares”) withheld by the Company for general representations and warranties. The Indemnity Holdback Shares will be issued to the EryDel Shareholders upon the first anniversary of the closing of the acquisition, subject to reduction for any indemnification claims, if any. Any indemnification claims after the acquisition date will result in an adjustment to the consideration transferred if the indemnification claim is made before the end of the measurement period. Any indemnification claim after the end of the measurement period will be recognized in the Company’s consolidated statements of operations and comprehensive loss. The Company has included the total fair value of the stock consideration within additional-paid-in capital and common stock.

The contingent consideration arrangement requires the Company to pay $485.0 million of additional consideration in cash, comprised of up to $5.0 million upon the achievement of a specified development milestone, $25.0 million at NDA acceptance, up to $60.0 million upon the achievement of specified approval milestones, and up to $395.0 million upon the achievement of specified on market and sales milestones. The Company estimated the fair value of the contingent consideration using a probability-weighted discounted cash flow model. This fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement as defined in ASC 820. The key assumptions in applying the income approach are as follows: 15% discount rate, probability of achievement, 0% to 100%, each of the milestones and future revenues from commercialization over the contingent consideration period. No contingent consideration is payable unless and until the milestones are achieved. The fair value of each milestone after the acquisition is reassessed, with the subsequent change in fair value recorded in the Company’s consolidated statements of operations and comprehensive loss. As of December 31, 2023, there were no significant changes in the range of outcomes for the contingent consideration recognized as a result of the EryDel acquisition.

Prior to the acquisition the Company had a preexisting relationship with EryDel. The Company had advanced $1.0 million to EryDel pursuant to a promissory note agreement. At the date of the acquisition, the Company had notes receivable due from EryDel of $1.0 million, including interest receivable of $1,300. As a result of the EryDel Acquisition, the promissory note between EryDel Italy and EryDel was effectively settled and recognized as additional consideration.

The following table summarizes the allocation of the consideration paid for EryDel to the estimated fair value of the assets acquired and liabilities assumed at the acquisition date, with the excess recorded to goodwill (in thousands):

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Assets acquired:		Preliminary Purchase Price Allocation
Cash	$		560
Tax assets			10,187
Other current assets			644
Property and equipment, net			238
Operating lease right-of-use assets, net			383
Other non-current assets			14
Intangible assets			61,096
Goodwill			16,929
Total assets acquired			90,051
Liabilities assumed:
Trade payables			(1,685	)
Accrued expenses and other current liabilities			(2,943	)
Debt, non-current			(12,564	)
Other non-current liabilities			(854	)
Deferred tax liability			(5,098	)
Total liabilities assumed			(23,144	)
Fair value of total consideration transferred	$		66,907

The purchase price allocation is preliminary and may change as a result of additional information obtained regarding assets acquired and liabilities assumed and revisions of estimates of fair values of intangible assets and related deferred tax assets and liabilities. The Company will finalize its valuation and the allocation of the purchase price, along with required retrospective adjustments, if any, within a year following the acquisition date.

The fair value of identifiable Acquired IPR&D intangible assets was $60.6 million. IPR&D was determined using the Multi-Period Excess Earnings Method ("MPEEM") under the income approach. MPEEM calculates the economic benefits by determining the income attributable to an intangible asset after the returns are subtracted for contributory assets such as working capital, assembled workforce, and fixed assets. The resulting after-tax net earnings were discounted at 16.6%, a rate commensurate with the risk inherent in the economic benefit projections of the assets. The probability-weighted, projected cash flows were calculated based on projections of revenues and expenses related to the asset and were assumed to extend through a multi-year projection period. The IPR&D has an indefinite useful life, and as such, is not amortized but rather tested for impairment at least annually.

The fair value of tradename intangible assets was $0.5 million. The tradename intangible assets were derived using the relief from royalties method under the income approach, utilizing royalty rate of 0.3%. This approach is used to estimate the cost savings that accrue for the owner of an intangible asset who would otherwise have to pay royalties or licensing fees on revenues earned through the use of the asset if they had not owned the rights to use the assets. The probability-weighted, net after-tax royalty savings are calculated for each year in the remaining economic life of the intangible asset and discounted to present value using a discount rate of 16.6%. The trademark has a useful life of 21 years. The trademark is amortized on a straight-line basis over the useful life.

The excess of the fair value of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill, which is primarily attributed to the assembled workforce and expanded global market opportunities. None of the goodwill is expected to be deductible for income tax purposes. Goodwill is not amortized but is tested for impairment at least annually, refer to Note 16 for this assessment.

The transaction costs associated with the acquisition were approximately $2.5 million, of which $2.3 million were recorded in general and administrative expenses and $0.2 million were recorded in research and development expenses in the consolidated statement of operations and comprehensive loss.

The Company has included the financial results of EryDel in the consolidated financial statements from the date of acquisition. From October 21, 2023 through December 31, 2023, the Company recognized no revenue and a net loss of $3.7 million attributable to EryDel.

The following unaudited pro forma information gives effect to the acquisition of EryDel as if it had been completed on January 1, 2022 (the beginning of the comparable prior reporting period), including pro forma adjustments primarily related to

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amortization of acquired intangible assets, tax benefit from release of the valuation allowance and the inclusion of acquisition-related expenses reflected in the revenue and net loss (in thousands):

	For the year ended December, 31
		2023			2022
Revenue		$	—		$	—
Net Loss			(40,265	)		(67,580	)

The 2023 supplemental pro forma earnings were adjusted to exclude $2.5 million of acquisition-related costs incurred in 2023, the 2022 pro forma earnings were adjusted to include these charges.

Novosteo business combination

On May 19, 2022, the Company completed the Novosteo Acquisition. Pursuant to the terms of the Merger Agreement, at the closing of the Novosteo Acquisition (the “Effective Time”), each share of capital stock of Novosteo (the “Novosteo Capital Stock”) that was issued and outstanding immediately prior to the Effective Time was automatically cancelled and converted into the right to receive 0.0911 shares of common stock, par value $0.001 per share, of the Company (the “Company Common Stock”). These shares included options to purchase an aggregate of 507,108 shares of the Company Common Stock upon conversion of the outstanding Novosteo options based on the Company Option Exchange Ratio (as defined in the Merger Agreement), with the awards retaining the same vesting and other terms and conditions as in effect immediately prior to consummation of the Acquisition. These options, as well as 519,216 unvested restricted shares were concluded to be post-combination expense and were excluded from purchase consideration.

The Company has included the financial results of Novosteo in the consolidated financial statements from the date of the Acquisition and recorded immaterial amounts of expenses and earnings since the period from May 19, 2022 through December 31, 2023. The transaction costs associated with the Acquisition were approximately $1.1 million and were recorded in general and administrative expense. The acquisition date fair value of the consideration transferred for Novosteo was approximately $16,502,587, which consisted of 5,000,784 shares at $3.30 per share.

The Company accounted for the Acquisition as a business combination in accordance with ASC 805. The Company applied the acquisition method, which requires the identifiable assets acquired and liabilities assumed be recorded at fair value with limited exceptions. The following table summarizes the fair values of the identifiable assets acquired and liabilities assumed as the final determination of the date of acquisition (in thousands):

	May 19,
	2022
Identifiable assets acquired and liabilities assumed:
Cash and cash equivalents	$	10,593
Prepaid expenses and other current assets		1,040
ROU asset		124
Property and equipment		279
In-process Research and Development		5,900
Accounts payable and accrued liabilities		(1,726	)
Deferred tax liabilities		(532	)
Net assets acquired		15,678
Goodwill	$	825

The final determination of the fair value of assets and liabilities have been completed within the one-year measurement period as required by ASC 805. As part of the valuation analysis, the fair value of the intangible assets was estimated by discounting forecasted risk adjusted cash flows at a rate that approximated the cost of capital of a market participant. Management's forecast of future cash flows was based on the income approach. Significant estimates, all of which are considered Level 3 inputs, were used in the fair value methodology, including the Company's forecast regarding its future operations and likeliness of obtaining approval to sell its products, as well as other market conditions. The Company recorded no measurement period adjustments for the years ended December 31, 2023 and 2022. All subsequent adjustments will be recorded to earnings.

The excess of the fair value of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill, which is primarily attributed to the assembled workforce and expanded market opportunities, for which there is no basis for U.S. income tax purposes. Goodwill amounts are not amortized but are rather tested for impairment at least annually, see Note 16 for this assessment. Goodwill is not deductible for tax purposes.

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The Intangible asset balance above is attributable to in-process research and development with an indefinite useful life.

The amounts of Novosteo's net loss was $9.4 million included in the Company's consolidated statement of operations and comprehensive loss for the year ended year ended December 31, 2022. The amount of Novosteo's revenue was $0 for the year ended December 31, 2022. The unaudited pro forma revenue and net loss of the combined entity had the acquisition date been January 1, 2021 are as follows (in thousands):

	For the year ended December 31,
	2022
Revenue	$	262
Net loss		(52,592	)

The 2022 supplemental pro forma earnings were adjusted to exclude $2.2 million of acquisition-related costs incurred in 2022, the 2021 pro forma earnings were adjusted to include these charges. The Company’s consolidated statements of operations and comprehensive loss for the year ended December 31, 2022 include immaterial net revenue and net loss attributable to the Acquisition.

Note 16. Intangible Assets

EryDel Intangible Assets

The following table provides details of the carrying amount of the Company's indefinite-lived intangible asset (in thousands):

		As of December 31,
		2023
Unamortized intangible assets:
	In-process research and development	$	60,636
	Impairment charge		—
	Foreign currency translation adjustments		2,561
	Balance as of December 31, 2023	$	63,197

The following table provides details of the carrying amount of the Company's finite-lived intangible asset (in thousands, except useful life):

			For the year ended December 31,
		Useful life	2023
Finite life intangible assets:
	Trade name	21 years	$	460
	Impairment charge			—
	Intangible asset amortization			(4	)
	Foreign currency translation adjustments			19
	Balance as of December 31, 2023		$	475

The Company performs annual impairment reviews of its intangible assets during the fourth fiscal quarter or more frequently if appropriate. The Company did not incur any impairment losses related to its EryDel intangible assets during the year ended December 31, 2023.

Novosteo Intangible Assets

The intangible asset acquired as a result of the Novosteo Acquisition consists of in-process research and development ("IPR&D") related to NOV004, the Company's bone targeting molecule designed to accelerate fracture repair. The value of the IPR&D was determined using discounted probable future cash flows. Significant assumptions used in determining the value of the intellectual property include the initiation of clinical trials and NDA approval with respect to NOV004, probability of reaching various phases of development, costs and cost of goods sold, and the risk adjusted discount rate applied to the cash flows.

133

The following table provides details of the carrying amount of the Company's indefinite-lived intangible asset (in thousands):

		As of December 31,
		2023
Unamortized intangible assets:
	In-process research and development	$	5,900
	Impairment charge		(5,900	)
	Balance as of December 31, 2023	$	—

In January 2023, the Company decided to discontinue the internal development of NOV004 and pursue out-licensing opportunities. As a result, several of the assumptions used in determining the initial fair value have changed including discount rate and expected cash flows and thus triggered the need for an interim impairment assessment as required under ASC 350. As a result, the fair value was determined to be significantly below its carrying value and the Company recognized an impairment charge of $5.9 million during the year ended December 31, 2023.

On December 22, 2023, the Company, following its prior decision to discontinue internal development of NOV004, approved that certain Mutual Termination of License Agreement (the “Termination Agreement”) by and between the Company and Purdue Research Foundation ("PRF") to terminate the License Agreement dated June 3, 2020, as amended on March 17, 2022, July 22, 2022, and June 23, 2023 (the “License Agreement”). Under the License Agreement, the Company obtained from PRF an exclusive worldwide license under certain bone fracture repair related patents and technology developed by Purdue University, including patents claiming NOV004 and related compounds and use of such compounds in the treatment of bone fractures.

Under the Termination Agreement, the License Agreement was terminated effective as of October 31, 2023. The Company agreed to reimburse PRF for certain fees and costs incurred in connection with the prosecution of the licensed patents prior to termination. The Company also agreed to assign to PRF certain documents and materials developed by the Company in connection with the development of the licensed product under the License Agreement, subject to the Company’s retained right to use such documents and materials for internal research purpose.

Goodwill

The following table summarizes the changes in the carrying amount of goodwill (in thousands):

Balance as of December 31, 2021	$	—
Additions(a)		825
Impairment charge		(825	)
Balance as of December 31, 2022	—
Additions(a)		16,929
Foreign currency translation adjustments		696
Balance as of December 31, 2023	$	17,625

(a) Goodwill additions related to the acquisition of Novosteo in second quarter of 2022 and the acquisition of EryDel in the fourth quarter of 2023 (see Note 15).

There was no amount related to goodwill related to the Novosteo acquisition reflected on the consolidated balance sheet for the Company as of December 31, 2022. In 2022, management performed an impairment evaluation of goodwill related to the Novosteo acquisition after assessing qualitative factors that indicated a possible impairment of goodwill. Under the qualitative assessment, management considers relevant events and circumstances including but not limited to macroeconomic conditions, industry and market considerations, overall Company performance and events directly affecting the Company. It was noted during our assessment that the Company's market capitalization was significantly below its carrying value and a further quantitative analysis was conducted to determine to the extent, if any, the Company's carrying value exceeded its fair value as of September 30, 2022. The quantitative analysis used fair value based on market capitalization adjusted for control premium based on market comparable transactions. This quantitative analysis resulted in the Company's fair value being significantly below its carrying value, resulting in a non-cash goodwill impairment charge of $0.8 million being recorded during the year ended December 31, 2022.

As part of the EryDel Acquisition, the Company recorded goodwill, the excess of the fair value of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired. The Company performed its annual qualitative test for goodwill in the fourth quarter of 2023, the Company concluded that no impairment exists for the year ended December 31, 2023.

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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Principal Financial Officer, of the effectiveness of our “disclosure controls and procedures” as of the end of the period covered by this Annual Report, pursuant to Rules 13a-15(b) and 15d-15(b) under the Exchange Act. In connection with that evaluation, our Chief Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were effective and designed to provide reasonable assurance that the information required to be disclosed is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms as of December 31, 2023. For the purpose of this review, disclosure controls and procedures means controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. These disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit is accumulated and communicated to management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

In designing and evaluating the disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Management's Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Our management used the Committee of Sponsoring Organizations of the Treadway Commission Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), or the COSO framework, to evaluate the effectiveness of internal control over financial reporting. Management believes that the COSO framework is a suitable framework for its evaluation of financial reporting because it is free from bias, permits reasonably consistent qualitative and quantitative measurements of our internal control over financial reporting, is sufficiently complete so that those relevant factors that would alter a conclusion about the effectiveness of our internal control over financial reporting are not omitted and is relevant to an evaluation of internal control over financial reporting.

Management has assessed the effectiveness of our internal control over financial reporting as of December 31, 2023 and has concluded that such internal control over financial reporting is effective. On October 20, 2023, we completed our acquisition of EryDel, a privately held, late-stage biotechnology company with a Phase 3 lead asset, EryDex, that targets the potential treatment of a rare neurodegenerative disease, A-T. We are in the process of integrating EryDel into our internal control over financial reporting. In accordance with SEC Staff guidance permitting a company to exclude an acquired business from management’s assessment of the effectiveness of internal controls over financial reporting for the year in which the acquisition is completed, management has excluded the business that we acquired from our assessment of the effectiveness of internal control over financial reporting as of December 31, 2023. The business that we acquired represents approximately $91.9 million of the Company’s total assets and $4.0 million of the Company’s total operating loss for the year-ended December 31, 2023.

This Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm. Our independent registered public accounting firm will not be required to formally attest to the effectiveness of our internal control over financial reporting as long as we are a smaller reporting company pursuant to the provisions of Rule 12b-2 of the Exchange Act.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during our fourth quarter ended December 31, 2023, that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.

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Item 9B. Other Information

None

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

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PART III

Item 10. Directors, Executive Officers and Corporate Governance

The information required by this item will be included in our 2024 Proxy Statement under the caption “Proposal One: Election of Directors,” which will be filed with the SEC within 120 days after the end of the fiscal year to which this report relates and is incorporated herein by reference.

Code of Business Conduct and Ethics

We have adopted a Code of Business Conduct and Ethics that applies to all of the members of our board of directors, officers and employees. Information regarding our Code of Business Conduct and Ethics required by this item will be contained in our 2024 Proxy Statement under the caption “Code of Business Conduct and Ethics” and is hereby incorporated by reference. The full text of our Code of Business Conduct and Ethics is posted on the Investor Relations section of our website, which is located at https://ir.quincetx.com/investor-relations, by clicking on “Governance Documents” in the “Governance” section of our website. We intend to satisfy the disclosure requirement under Item 5.05 of Form 8 K regarding amendment to, or waiver from, a provision of our Code of Business Conduct and Ethics by posting such information on our website at the location specified above.

Item 11. Executive Compensation

The information required by this item will be included in our 2024 Proxy Statement under the captions “Director Compensation,” “Executive Compensation,” which will be filed with the SEC within 120 days after the end of the fiscal year to which this report relates and is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management And Related Stockholder Matters

The information required in this item will be included in our 2024 Proxy Statement under the captions “Security Ownership of Certain Beneficial Owners and Management” and “Equity Compensation Plan Information,” which will be filed with the SEC within 120 days after the end of the fiscal year to which this report relates and is incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required in this item will be included in our 2024 Proxy Statement under the captions “Review, Approval or Ratification of Transactions with Related Parties” and “Independence of Directors,” which will be filed with the SEC within 120 days after the end of the fiscal year to which this report relates and is incorporated herein by reference.

Item 14. Principal Accountant Fees and Services

Our independent registered public accounting firm is BDO USA, P.C., Chicago, Illinois, PCAOB Auditor ID 243.

The information required in this item will be included in our 2024 Proxy Statement under the caption “Independent Registered Public Accounting Firm Fees and Services,” which will be filed with the SEC within 120 days after the end of the fiscal year to which this report relates and is incorporated herein by reference.

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PART IV

Item 15. Exhibits and Consolidated Financial Statement Schedules

(a) The following documents are filed as part of this report:

1. Consolidated Financial Statements

See Index to Consolidated Financial Statements in Part II Item 8 of this Annual Report on Form 10-K.

2. Consolidated Financial Statement Schedules

All schedules are omitted because they are not applicable or the required information is shown in the consolidated financial statements or notes thereto.

3. Exhibits

The documents listed in the Exhibit Index are incorporated by reference or are filed with this report, in each case as indicated therein (numbered in accordance with Item 601 of Regulation S-K).

Item 16. Form 10-K Summary

None.

138

Exhibit Index

		Incorporated by reference					Filed or furnished herewith
Exhibit No.	Exhibit title	Form	File No.	Exhibit No.		Filing date
2.1	Agreement and Plan of Merger and Reorganization, dated as of May 9, 2022 by and among Cortexyme,Inc., Novosteo Inc., Quince Merger Sub I, Inc., Quince Merger Sub II, LLC and Fortis Advisors LLC	8-K	001-38890	2.1	5/12/2022
2.2	Stock Purchase Agreement, dated as of July 21, 2023 by and among Quince Therapeutics, Inc., EryDel Italy, Inc., EryDel S.p.A., certain holders and managers set forth on Schedule II thereto, and Shareholder Representative Services LLC, as the stockholder representative	8-K	001-38890	2.1	7/21/2023
3.1	Amended and Restated Certificate of Incorporation	8-K	001-38890	3.1	5/13/2019
3.2	Certificate of Amendment to the registrant’s Certificate of Incorporation, effective August 1, 2022	8-K	001-38890	3.1	8/1/2022
3.3	Amended and Restated Bylaws	8-K	001-38890	3.2	8/1/2022
3.4	Certificate of Designation of Series A Junior Participating Preferred Stock	8-K	001-38890	3.1	4/5/2023
4.1	Specimen Stock Certificate	S-1	333-230853	4.1	4/29/2019
4.2	Amended and Restated Investors’ Rights Agreement, dated May 23, 2018 by an among the Registrant and certain of its stockholders	S-1	333-230853	4.2	4/12/2019
4.3	Description of Securities	10-K	001-36276	4.3	3/1/2021
4.4	Rights Agreement dated as of April 5, 2023, between Quince Therapeutics, Inc. and American Stock Transfer & Trust Company, LLC	8-K	001-38890	4.1	4/5/2023
10.1+	Employment Offer Letter, by and between Cortexyme, Inc. and Brendan Hannah, dated May 9,2022	10-Q	001-38890	10.2	8/9/2022
10.2+	Employment Offer Letter, by and between Cortexyme, Inc. and Dirk Thye, dated May 9,2022	10-Q	001-38890	10.4	8/9/2022
10.3+	Offer Letter between Quince Therapeutics, Inc. and Charles Ryan, dated as of August 1, 2023	10-Q	001-38890	10.3	11/14/2023
10.4+	Form of Indemnification Agreement between Cortexyme, Inc. and each of its officers and directors	S-1/A	333-230853	10.2	4/29/2019
10.5+	2014 Stock Plan, as amended as of November 28, 2018, and related forms of stock award agreements	S-1	333-230853	10.3	4/12/2019
10.6+	2019 Equity Incentive Plan and forms of stock award agreements thereunder						X
10.7+	2019 Employee Stock Purchase Plan	S-1/A	333-230853	10.5	4/29/2019
10.8+	Executive Incentive Bonus Plan	S-1	333-230853	10.6	4/12/2019
10.9+	Cortexyme, Inc. 2022 Inducement Plan	S-8	333-265109	99.1	5/20/2022
10.10+	Forms of Stock Option Award Agreement, Notice of Stock Option Grant and Exercise Notice under Cortexyme, Inc. 2022 Inducement Plan	S-8	333-265109	99.2	5/20/2022
10.11+	Forms of Restricted Stock Unit Award Agreement and Notice of Restricted Stock Unit Grant Cortexyme, Inc. 2022 Inducement Plan	S-8	333-265109	99.3	5/20/2022
10.12+	Novosteo Inc. 2019 Equity Incentive Plan	S-8	333-265109	99.4	5/20/2022

139

10.13+	Executive Change in Control and Severance Agreement by and between Cortexyme, Inc. and Brendan Hannah, dated May 19, 2022	10-Q	001-38890	10.10	8/9/2022
10.14+	Transition and Separation Agreement between Quince Therapeutics, Inc. and Karen Smith, dated as of August 4, 2023	10-Q	001-38890	10.2	11/14/2023
10.15+	Executive Change in Control and Severance Agreement by and between Cortexyme, Inc. and Dirk Thye, dated May 19, 2022	10-Q	001-38890	10.12	8/9/2022
10.16+	Executive Change in Control and Severance Agreement between Quince Therapeutics, Inc. and Charles Ryan, dated as of September 1, 2023	10-Q	001-38890	10.4	11/14/2023
10.17	Sublease Agreement, by and between Cortexyme, Inc. and ICON Clinical Research LLC, dated as of May 5, 2022	10-Q	001-38890	10.14	8/9/2022
10.18	Consent to Sublease, by and between Cortexyme, Inc. and ICON Clinical Research LLC, dated as of June 8, 2022	10-Q	001-38890	10.15	8/9/2022
10.19	Sub-Sublease Agreement by and between Cortexyme, Inc. and Verily Life Sciences LLC, dated June 18, 2018.	10-Q	333-230853	10.1	4/12/2019
10.20	Amendment No. 1 to Sub-Sublease by and between Cortexyme, Inc. and Verily Life Sciences LLC dated April 2, 2019.	10-Q	001-38890	10.1	8/9/2019
10.21	Second Amendment to Sub-Sublease by and between Cortexyme, Inc. and Verily Life Sciences LLC dated May 26, 2020	10-Q	001-38890	10.1	8/14/2020
10.22	Third Amendment to Sub-Sublease by and between Cortexyme, Inc. and Verily Life Sciences LLC dated July 15,2021	10-Q	001-38890	10.7	8/6/2021
10.23	Outside Director Compensation Policy adopted April 9,2019; Amended and Restated: June 7, 2022	10-Q	001-38890	10.17	8/9/2022
10.24	Open Market Sales AgreementSM dated December 23, 2021, by and between Cortexyme, Inc. and Jefferies LLC	8-K	001-38890	10.1	12/23/2021
10.25	Lighthouse Purchase Agreement	10-Q	001-38890	10.1	5/15/2023
10.26**	Accession, Amendment and Restatement Agreement to the Finance Contract relating to the Finance Contract dated 24 July 2020, as amended from time to time, by and between the Company, EryDel Italy, Inc., EryDel US, Inc., EryDel USA, Inc. EryDel S.p.A, and the European Investment Bank, dated as of October 20, 2023					X
10.27**	Autonomous First Demand Guarantee (Garanzia Autonoma a Prima Richiesta) by and between the Company, EryDel Italy, Inc., EryDel US, Inc., EryDel S.p.A, and the European Investment Bank, dated as of October 20, 2023					X
21.1	List of subsidiaries					X
23.1	Consent of Independent Registered Public Accounting Firm					X
24.1	Power of Attorney (incorporated by reference to the signature page of this Annual Report on Form 10-K)					X
31.1	Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and Rule 15d-14(a) of the Exchange Act					X

140

31.2	Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and Rule 15d-14(a) of the Exchange Act	X
32.1#	Certification of Principal Executive Officer pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	X
32.2#	Certification of Principal Financial Officer pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	X
97.1	Incentive Compensation Recoupment Policy	X
101.INS	Inline XBRL Instance Document	X
101.SCH	Inline XBRL Taxonomy Extension Schema Document	X
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document	X
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document	X
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document	X
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document	X
104	The cover page from this Annual Report on Form 10-K, formatted in Inline XBRL

+ Management contract or compensatory plan or arrangement.

** Portions of this exhibit have been redacted pursuant to Item 601(b)(10) of Regulation S-K as the Registrant has determined that (i) the omitted information is not material and (ii) the omitted material is of the type that the Registrant treats as private or confidential.

# In accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release Nos. 33-8238 and 34-47986, Final Rule: Management's Reports on Internal Control Over Financial Reporting and Certification of Disclosure in Exchange Act Periodic Reports, the certifications furnished in Exhibits 32.1 and 32.2 hereto are deemed to accompany this Annual Report on Form 10-K and will not be deemed “filed” for purpose of Section 18 of the Exchange Act. Such certifications will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.

141

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Quince Therapeutics, Inc.
Date: April 1, 2024	By:	/s/ Dirk Thye
		Dirk Thye
		Chief Executive Officer

POWER OF ATTORNEY

Each person whose signature appears below constitutes and appoints Dirk Thye and Brendan Hannah, and each of them, as his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitutes, may lawfully do or cause to be done by virtue thereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated.

Name Title Date

/s/ Dirk Thye	Chief Executive Officer, and Director	April 1, 2024
Dirk Thye	(Principal Executive Officer)
/s/ Brendan Hannah	Chief Business Officer and Chief Operating Officer	April 1, 2024
Brendan Hannah	(Principal Financial and Accounting Officer)
/s/ David A. Lamond	Director	April 1, 2024
David A. Lamond
/s/ Margaret McLoughlin	Director	April 1, 2024
Margaret McLoughlin, Ph.D.
/s/ Una Ryan	Director	April 1, 2024
Una Ryan, OBE Ph.D.
/s/ Christopher J. Senner	Director	April 1, 2024
Christopher J. Senner
/s/ Luca Benatti	Director	April 1, 2024
Luca Benatti
/s/ Rajiv Patni	Director	April 1, 2024
Rajiv Patni
/s/ June Bray	Director	April 1, 2024
June Bray

142

EX-10.6

Exhibit 10.6

QUINCE THERAPEUTICS, INC.

2019 EQUITY INCENTIVE PLAN

1.Purposes of the Plan. The purposes of this Plan are (a) to attract and retain the best available personnel to ensure the Company’s success and accomplish the Company’s goals; (b) to incentivize Employees, Directors and Independent Contractors with long-term equity-based compensation to align their interests with the Company’s stockholders, and (c) to promote the success of the Company’s business.

The Plan permits the grant of Incentive Stock Options, Nonstatutory Stock Options, Restricted Stock, Restricted Stock Units, Stock Appreciation Rights, Performance Units and Performance Shares.

This Plan is a continuation of the Company’s 2014 Stock Plan which has been amended, restated and re-named into the form of this Plan effective as of the Effective Date.

2.Definitions. As used herein, the following definitions will apply:

(a)“Administrator” means the Board or any of its Committees as will be administering the Plan, in accordance with Section 4 of the Plan.

(b)“Affiliate” means (i) an entity other than a Subsidiary which, together with the Company, is under common control of a third person or entity and (ii) an entity other than a Subsidiary in which the Company and/or one or more Subsidiaries own a controlling interest.

(c)“Applicable Laws” means all applicable laws, rules, regulations and requirements, including, but not limited to, all applicable U.S. federal or state laws, rules and regulations, the rules and regulations of any stock exchange or quotation system on which the Common Stock is listed or quoted, and the applicable laws, rules and regulations of any other country or jurisdiction where Awards are, or will be, granted under the Plan or Participants reside or provide services to the Company or any Parent or Subsidiary of the Company, as such laws, rules, and regulations shall be in effect from time to time.

(d)“Award” means, individually or collectively, a grant under the Plan of Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Units or Performance Shares.

(e)“Award Agreement” means the written or electronic agreement setting forth the terms and provisions applicable to each Award granted under the Plan. The Award Agreement is subject to the terms and conditions of the Plan.

(f)“Board” means the Board of Directors of the Company.

(g)“Cause” means, with respect to the termination of a Participant’s status as a Service Provider, except as otherwise defined in an Award Agreement, (i) in the case where there is no employment agreement, consulting agreement, change in control agreement or similar agreement in effect between the Company or an Affiliate of the Company and the Participant at the time of the grant of the Award (or where there is such an agreement but it does not define “cause” (or words of like import) or where it only applies upon the occurrence of a change in control and one has not yet taken place): (A) any material breach by Participant of any material written agreement between Participant and the Company; (B) any failure by Participant to comply with the Company’s material written policies or rules as they may be in effect from time to time; (C) neglect or persistent unsatisfactory performance of Participant’s duties; (D) Participant’s

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repeated failure to follow reasonable and lawful instructions from the Board or Chief Executive Officer; (E) Participant’s indictment for, conviction of, or plea of guilty or nolo contendre to, any felony or crime that results in, or is reasonably expected to result in, a material adverse effect on the business or reputation of the Company; (F) Participant’s commission of or participation in an act of fraud against the Company; (G) Participant’s intentional material damage to the Company’s business, property or reputation; or (H) Participant’s unauthorized use or disclosure of any proprietary information or trade secrets of the Company or any other party to whom the Participant owes an obligation of nondisclosure as a result of his or her relationship with the Company; or (ii) in the case where there is an employment agreement, consulting agreement, change in control agreement or similar agreement in effect between the Company or an Affiliate and the Participant at the time of the grant of the Award that defines “cause” (or words of like import), “cause” as defined under such agreement; provided, however, that with regard to any agreement under which the definition of “cause” only applies on occurrence of a change in control, such definition of “cause” shall not apply until a change in control actually takes place and then only with regard to a termination thereafter. For purposes of clarity, a termination without “Cause” does not include any termination that occurs solely as a result of Participant’s death or Disability. The determination as to whether a Participant’s status as a Service Provider for purposes of the Plan has been terminated for Cause shall be made in good faith by the Company and shall be final and binding on the Participant. The foregoing definition does not in any way limit the Company’s ability (or that of any Parent or Subsidiary or any successor thereto, as appropriate) to terminate a Participant’s employment or consulting relationship at any time, subject to Applicable Laws.

(h)“Change in Control” except as may otherwise be provided in an Award Agreement or other applicable agreement, means the occurrence of any of the following:

(i)The consummation of a merger or consolidation of the Company with or into another entity or any other corporate reorganization, if the Company’s stockholders immediately prior to such merger, consolidation or reorganization cease to directly or indirectly own immediately after such merger, consolidation or reorganization at least a majority of the combined voting power of the continuing or surviving entity’s securities outstanding immediately after such merger, consolidation or reorganization;

(ii)The consummation of the sale, transfer or other disposition of all or substantially all of the Company’s assets (other than (x) to a corporation or other entity of which at least a majority of its combined voting power is owned directly or indirectly by the Company, (y) to a corporation or other entity owned directly or indirectly by the shareholders of the Company in substantially the same proportions as their ownership of the Common Stock of the Company or (z) to a continuing or surviving entity described in Section 2(h)(i) in connection with a merger, consolidation or reorganization which does not result in a Change in Control under Section 2(h)(i));

(iii)A change in the effective control of the Company which occurs on the date that a majority of members of the Board is replaced during any twelve (12) month period by Directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election; or

(iv)The consummation of any transaction as a result of which any Person becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing at least fifty percent (50%) of the total voting power represented by the Company’s then outstanding voting securities. For purposes of this Section 2(g), the term “Person” shall have the same meaning as when used in Sections 13(d) and 14(d) of the Exchange Act but shall exclude:

(1)a trustee or other fiduciary holding securities under an employee benefit plan of the Company or an affiliate of the Company;

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(2)a corporation or other entity owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of the Common Stock of the Company;

(3)the Company; and

(4)a corporation or other entity of which at least a majority of its combined voting power is owned directly or indirectly by the Company.

A transaction shall not constitute a Change in Control if its sole purpose is to change the state of the Company’s incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transactions. In addition, if any Person (as defined above) is considered to be in effective control of the Company, the acquisition of additional control of the Company by the same Person will not be considered to cause a Change in Control. If required for compliance with Section 409A of the Code, in no event will a Change in Control be deemed to have occurred if such transaction is not also a “change in the ownership or effective control of” the Company or “a change in the ownership of a substantial portion of the assets of” the Company as determined under Treasury Regulation Section 1.409A-3(i)(5) (without regard to any alternative definition thereunder).

(i)“Code” means the Internal Revenue Code of 1986, as amended. Reference to a specific section of the Code or regulation thereunder shall include such section or regulation, any valid regulation promulgated under such section, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such section or regulation.

(j)“Committee” means a committee of Directors or of other individuals satisfying Applicable Laws appointed by the Board in accordance with Section 4 hereof.

(k)“Common Stock” means the common stock of the Company.

(l)“Company” means Quince Therapeutics, Inc., a Delaware corporation, or any successor thereto.

(m)“Director” means a member of the Board.

(n)“Disability” means total and permanent disability as defined in Section 22(e)(3) of the Code, provided that in the case of Awards other than Incentive Stock Options, the Administrator in its discretion may determine whether a permanent and total disability exists in accordance with uniform and non-discriminatory standards adopted by the Administrator from time to time.

(o)“Effective Date” means the day immediately prior to the Registration Date.

(p)“Employee” means any person, including Officers and Directors, employed by the Company or any Parent or Subsidiary of the Company. Neither service as a Director nor payment of a director’s fee by the Company will be sufficient to constitute “employment” by the Company.

(q)“Exchange Act” means the Securities Exchange Act of 1934, as amended.

(r)“Exchange Program” means a program under which outstanding Awards are amended to provide for a lower exercise price or surrendered or cancelled in exchange for (i) Awards with a lower exercise price, (ii) a different type of Award or awards under a different equity incentive plan, (iii) cash, or

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(iv) a combination of (i), (ii) and/or (iii). Notwithstanding the preceding, the term Exchange Program does not include (i) any action described in Section 14 or any action taken in connection with a Change in Control transaction nor (ii) any transfer or other disposition permitted under Section 13. For the purpose of clarity, each of the actions described in the prior sentence, none of which constitute an Exchange Program, may be undertaken (or authorized) by the Administrator in its sole discretion without approval by the Company’s stockholders.

(s)“Fair Market Value” means, as of any date, the value of Common Stock determined as follows:

(i)If the Common Stock is listed on any established stock exchange or a national market system, its Fair Market Value will be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system on the day of determination, as reported in such source as the Administrator deems reliable;

(ii)If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value of a Share will be the mean between the high bid and low asked prices for the Common Stock on the day of determination, as reported in such source as the Administrator deems reliable;

(iii)For purposes of any Awards granted on the Registration Date, the Fair Market Value will be the initial price to the public as set forth in the final prospectus included within the registration statement on Form S-1 filed with the Securities and Exchange Commission for the initial public offering of the Company’s Common Stock; or

(iv)In the absence of an established market for the Common Stock, the Fair Market Value will be determined in good faith by the Administrator in compliance with applicable laws and regulations and in a manner that complies with Sections 409A of the Code.

(t)“Fiscal Year” means the fiscal year of the Company.

(u)“Incentive Stock Option” means an Option that by its terms qualifies and is intended to qualify as an incentive stock option within the meaning of Section 422 of the Code and the regulations promulgated thereunder.

(v)“Independent Contractor” means any person, including an advisor, consultant or agent, engaged by the Company or a Parent or Subsidiary to render services to such entity or who renders, or has rendered, services to the Company, or any Parent, Subsidiary or affiliate and is compensated for such services.

(w)“Inside Director” means a Director who is an Employee.

(x)“Nonstatutory Stock Option” means an Option that by its terms does not qualify or is not intended to qualify as an Incentive Stock Option.

(y)“Officer” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.

(z)“Option” means a stock option granted pursuant to the Plan.

(aa)“Outside Director” means a Director who is not an Employee.

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(bb)“Parent” means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company if each of the corporations other than the Company owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A corporation that attains the status of a Parent on a date after the adoption of the Plan shall be considered a Parent commencing as of such date.

(cc)“Participant” means the holder of an outstanding Award.

(dd)“Performance Goal” means a formula or standard determined by the Committee with respect to each Performance Period based on one or more of the following criteria and any adjustment(s) thereto established by the Committee: (1) sales or non-sales revenue; (2) return on revenues; (3) operating income; (4) income or earnings including operating income; (5) income or earnings before or after taxes, interest, depreciation and/or amortization; (6) income or earnings from continuing operations; (7) net income; (8) pre-tax income or after-tax income; (9) net income excluding amortization of intangible assets, depreciation and impairment of goodwill and intangible assets and/or excluding charges attributable to the adoption of new accounting pronouncements; (10) raising of financing or fundraising; (11) project financing; (12) revenue backlog; (13) gross margin; (14) operating margin or profit margin; (15) capital expenditures, cost targets, reductions and savings and expense management; (16) return on assets (gross or net), return on investment, return on capital, or return on stockholder equity; (17) cash flow, free cash flow, cash flow return on investment (discounted or otherwise), net cash provided by operations, or cash flow in excess of cost of capital; (18) performance warranty and/or guarantee claims; (19) stock price or total stockholder return; (20) earnings or book value per share (basic or diluted); (21) economic value created; (22) pre-tax profit or after-tax profit; (23) strategic business criteria, consisting of one or more objectives based on meeting specified market penetration or market share, completion of strategic agreements such as licenses, joint ventures, acquisitions, and the like, geographic business expansion, objective customer satisfaction or information technology goals, intellectual property asset metrics; (24) objective goals relating to divestitures, joint ventures, mergers, acquisitions and similar transactions; (25) objective goals relating to staff management, results from staff attitude and/or opinion surveys, staff satisfaction scores, staff safety, staff accident and/or injury rates, compliance, headcount, performance management, completion of critical staff training initiatives; (26) objective goals relating to projects, including project completion, timing and/or achievement of milestones, project budget, technical progress against work plans; and (27) enterprise resource planning. Awards issued to Participants may take into account other criteria (including subjective criteria). Performance Goals may differ from Participant to Participant, Performance Period to Performance Period and from Award to Award. Any criteria used may be measured, as applicable, (i) in absolute terms, (ii) in relative terms (including, but not limited to, any increase (or decrease) over the passage of time and/or any measurement against other companies or financial or business or stock index metrics particular to the Company), (iii) on a per share and/or share per capita basis, (iv) against the performance of the Company as a whole or against any affiliate(s), or a particular segment(s), a business unit(s) or a product(s) of the Company or individual project company, (v) on a pre-tax or after-tax basis, and/or (vi) using an actual foreign exchange rate or on a foreign exchange neutral basis.

(ee)“Performance Period” means the time period during which the Performance Goals or other vesting provisions must be satisfied for Performance Shares or Performance Units.

(ff)“Performance Share” means an Award denominated in Shares which may be earned in whole or in part upon attainment of Performance Goals or other vesting criteria as the Administrator may determine pursuant to Section 10.

(gg)“Performance Unit” means an Award which may be earned in whole or in part upon attainment of Performance Goals or other vesting criteria as the Administrator may determine and which may be settled for cash, Shares or other securities or a combination of the foregoing pursuant to Section 10.

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(hh)“Period of Restriction” means the period during which the transfer of Shares of Restricted Stock are subject to restrictions and therefore, the Shares are subject to a substantial risk of forfeiture. Such restrictions may be based on the passage of time, the achievement of target levels of performance, or the occurrence of other events as determined by the Administrator.

(ii)“Plan” means this 2019 Equity Incentive Plan.

(jj)“Registration Date” means the effective date of the first registration statement that is filed by the Company and declared effective pursuant to Section 12(g) of the Exchange Act, with respect to any class of the Company’s securities.

(kk)“Restricted Stock” means Shares issued pursuant to a Restricted Stock award under Section 7 of the Plan.

(ll)“Restricted Stock Unit” means a bookkeeping entry representing an amount equal to the Fair Market Value of one Share, granted pursuant to Section 8. Each Restricted Stock Unit represents an unfunded and unsecured obligation of the Company.

(mm)“Rule 16b-3” means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3, as in effect when discretion is being exercised with respect to the Plan.

(nn)“Section 16(b)” means Section 16(b) of the Exchange Act.

(oo)“Service Provider” means an Employee, Director or Independent Contractor.

(pp)“Share” means a share of the Common Stock, as adjusted in accordance with Section 14 of the Plan.

(qq)“Stock Appreciation Right” means an Award, granted alone or in connection with an Option, that pursuant to Section 9 is designated as a Stock Appreciation Right.

(rr)“Subsidiary” means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if each of the corporations other than the last corporation in the unbroken chain owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A corporation that attains the status of a Subsidiary on a date after the adoption of the Plan shall be considered a Subsidiary commencing as of such date.

(ss)“Tax-Related Items” means income tax, social insurance or other social contributions, national insurance, social security, payroll tax, fringe benefits tax, payment on account or other tax-related items.

3.Stock Subject to the Plan.

(a)Stock Subject to the Plan. Subject to the provisions of Section 14 of the Plan, the maximum aggregate number of Shares that may be issued under the Plan is 5,131,549 Shares. The Shares may be authorized, but unissued, or reacquired Common Stock. Notwithstanding the foregoing, subject to the provisions of Section 14 below, in no event shall the maximum aggregate number of Shares that may be issued under the Plan pursuant to Incentive Stock Options exceed the number set forth in this Section 3(a) plus, to the extent allowable under Section 422 of the Code and the regulations promulgated thereunder, any Shares that again become available for issuance pursuant to Sections 3(b) and 3(c).

6

(b)Automatic Share Reserve Increase. The number of Shares available for issuance under the Plan will be increased on the first day of each Fiscal Year beginning with the 2020 Fiscal Year, in an amount equal to the lessor of (i) 2,146,354 Shares, (ii) four percent (4%) of the outstanding Shares on the last day of the immediately preceding Fiscal Year and (iii) such number of Shares determined by the Board.

(c)Lapsed Awards. To the extent an Award should expire or be forfeited or become unexercisable for any reason without having been exercised in full, or is surrendered pursuant to an Exchange Program, the unissued Shares that were subject thereto shall, unless the Plan shall have been terminated, continue to be available under the Plan for issuance pursuant to future Awards. In addition, any Shares which are retained by the Company upon exercise of an Award in order to satisfy the exercise or purchase price for such Award or any withholding taxes due with respect to such Award shall be treated as not issued and shall continue to be available under the Plan for issuance pursuant to future Awards. Shares issued under the Plan and later forfeited to the Company due to the failure to vest or repurchased by the Company at the original purchase price paid to the Company for the Shares (including, without limitation, upon forfeiture to or repurchase by the Company in connection with a Participant ceasing to be a Service Provider) shall again be available for future grant under the Plan. To the extent an Award under the Plan is paid out in cash rather than Shares, such cash payment will not result in reducing the number of Shares available for issuance under the Plan.

4.Administration of the Plan.

(a)Procedure.

(i)Multiple Administrative Bodies. Different Committees with respect to different groups of Service Providers may administer the Plan.

(ii)Rule 16b-3. To the extent desirable to qualify transactions hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder will be structured to satisfy the requirements for exemption under Rule 16b-3.

(iii)Other Administration. Other than as provided above, the Plan will be administered by (A) the Board or (B) a Committee, which committee will be constituted to satisfy Applicable Laws.

(b)Powers of the Administrator. Subject to the provisions of the Plan, the Administrator will have the authority, in its discretion:

(i)to determine the Fair Market Value in accordance with Section 2(c);

(ii)to select the Service Providers to whom Awards may be granted hereunder;

(iii)to determine the number of Shares to be covered by each Award granted hereunder;

(iv)to approve forms of Award Agreements for use under the Plan;

(v)to determine the terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder; such terms and conditions include, but are not limited to, the exercise price, the time or times when Awards may be exercised (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation regarding any Award or the Shares relating thereto, based in each case on such factors as the Administrator will determine;

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(vi)to institute and determine the terms and conditions of an Exchange Program; provided however, that the Committee shall not implement an Exchange Program without the approval of the holders of a majority of the Shares that are present in person or by proxy and entitled to vote at any annual or special meeting of Company’s stockholders;

(vii)to construe and interpret the terms of the Plan and Awards granted pursuant to the Plan;

(viii)to prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations established for the purpose of satisfying applicable non-U.S. laws, for qualifying for favorable tax treatment under applicable non-U.S. laws or facilitating compliance with non-U.S. laws (sub-plans may be created for any of these purposes);

(ix)to modify or amend each Award (subject to Section 21 of the Plan), including but not limited to the discretionary authority to extend the post-termination exercisability period of Awards, to accelerate vesting and to extend the maximum term of an Option (subject to Section 6(b) of the Plan regarding Incentive Stock Options);

(x)to allow Participants to satisfy tax withholding obligations in such manner as prescribed in Section 15 of the Plan;

(xi)to authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Award previously granted by the Administrator;

(xii)to allow a Participant to defer the receipt of the payment of cash or the delivery of Shares that would otherwise be due to such Participant under an Award; and

(xiii)to make all other determinations deemed necessary or advisable for administering the Plan.

(c)Effect of Administrator’s Decision. The Administrator’s decisions, determinations and interpretations will be final and binding on all Participants and any other holders of Awards.

(d)Delegation by the Committee. To the extent permitted by Applicable Law, the Committee, in its sole discretion and on such terms and conditions as it may provide, may delegate all or any part of its authority and powers under the Plan to one or more Directors or officers of the Company.

5.Award Eligibility. Nonstatutory Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Shares and Performance Units may be granted to Service Providers. Incentive Stock Options may be granted only to Employees.

6.Stock Options.

(a)Limitations. Each Option will be designated in the Award Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option. However, notwithstanding such designation, to the extent that the aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options are exercisable for the first time by the Participant during any calendar year (under all plans of the Company and any Parent or Subsidiary) exceeds one hundred thousand dollars ($100,000), such Options will be treated as Nonstatutory Stock Options. For purposes of this Section 6(a), Incentive Stock Options will be taken into account in the order in which they were granted. The Fair Market Value of the Shares will be determined as of the date the Option with respect to such Shares is granted. With respect to the Committee’s

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authority in Section 4(b)(ix), if, at the time of any such extension, the exercise price per Share of the Option is less than the Fair Market Value of a Share, the extension shall, unless otherwise determined by the Committee, be limited to the earlier of (1) the maximum term of the Option as set by its original terms, or (2) ten (10) years from the grant date. Unless otherwise determined by the Committee, any extension of the term of an Option pursuant to this Section 4(b)(ix) shall comply with Code Section 409A to the extent necessary to avoid taxation thereunder.

(b)Term of Option. The term of each Option will be stated in the Award Agreement. In the case of an Incentive Stock Option, the term will be ten (10) years from the date of grant or such shorter term as may be provided in the Award Agreement. Moreover, in the case of an Incentive Stock Option granted to a Participant who, at the time the Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Parent or Subsidiary, the term of the Incentive Stock Option will be five (5) years from the date of grant or such shorter term as may be provided in the Award Agreement.

(c)Option Exercise Price and Consideration.

(i)Exercise Price. The per share exercise price for the Shares to be issued pursuant to exercise of an Option will be determined by the Administrator, subject to the following:

(1)In the case of an Incentive Stock Option

(A)granted to an Employee who, at the time the Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the per Share exercise price will be no less than one hundred ten percent (110%) of the Fair Market Value per Share on the date of grant.

(B)granted to any Employee other than an Employee described in paragraph (A) immediately above, the per Share exercise price will be no less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant.

(2)In the case of a Nonstatutory Stock Option, the per Share exercise price will be no less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant.

(3)Notwithstanding the foregoing, Options may be granted with a per Share exercise price of less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant pursuant to a transaction described in, and in a manner consistent with, Section 424(a) of the Code.

(ii)Waiting Period and Exercise Dates. At the time an Option is granted, the Administrator will fix the period within which the Option may be exercised and will determine any conditions that must be satisfied before the Option may be exercised.

(iii)Form of Consideration. The Administrator will determine the acceptable form of consideration for exercising an Option, including the method of payment. In the case of an Incentive Stock Option, the Administrator will determine the acceptable form of consideration at the time of grant. Such consideration for both types of Options may consist entirely of: (1) cash; (2) check; (3) promissory note, to the extent permitted by Applicable Laws, (4) other Shares, provided that such Shares have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which such Option will be exercised and provided that accepting such Shares will not result in any adverse accounting consequences to the Company, as the Administrator determines in its sole discretion; (5) consideration received by the Company under a broker-assisted (or other) cashless exercise program (whether through a

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broker or otherwise) implemented by the Company in connection with the Plan; (6) by net exercise; (7) such other consideration and method of payment for the issuance of Shares to the extent permitted by Applicable Laws; or (8) any combination of the foregoing methods of payment.

(d)Exercise of Option.

(i)Procedure for Exercise; Rights as a Stockholder. Any Option granted hereunder will be exercisable according to the terms of the Plan and at such times and under such conditions as determined by the Administrator and set forth in the Award Agreement. An Option may not be exercised for a fraction of a Share.

An Option will be deemed exercised when the Company receives: (i) a notice of exercise (in such form as the Administrator may specify from time to time) from the person entitled to exercise the Option, and (ii) full payment for the Shares with respect to which the Option is exercised (together with full payment of any applicable taxes or other amounts required to be withheld or deducted with respect to the Option). Full payment may consist of any consideration and method of payment authorized by the Administrator and permitted by the Award Agreement and the Plan. Shares issued upon exercise of an Option will be issued in the name of the Participant or, if requested by the Participant, in the name of the Participant and his or her spouse. Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder will exist with respect to the Shares subject to an Option, notwithstanding the exercise of the Option. The Company will issue (or cause to be issued) such Shares promptly after the Option is exercised. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 14 of the Plan.

(ii)Termination of Relationship as a Service Provider. If a Participant ceases to be a Service Provider, other than upon the Participant’s termination as the result of the Participant’s death, Disability or Cause, the Participant may exercise his or her Option within such period of time as is specified in the Award Agreement to the extent that the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement). In the absence of a specified time in the Award Agreement, the Option will remain exercisable for three (3) months following the Participant’s termination. Unless otherwise provided by the Administrator, if on the date of termination the Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will revert to the Plan. If after termination the Participant does not exercise his or her Option within the time specified by the Administrator, the Option will terminate, and the Shares covered by such Option will revert to the Plan.

(iii)Disability of Participant. If a Participant ceases to be a Service Provider as a result of the Participant’s Disability, the Participant may exercise his or her Option within such period of time as is specified in the Award Agreement to the extent the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement). In the absence of a specified time in the Award Agreement, the Option will remain exercisable for twelve (12) months following the Participant’s termination. Unless otherwise provided by the Administrator, if on the date of termination the Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will revert to the Plan. If after termination the Participant does not exercise his or her Option within the time specified herein, the Option will terminate, and the Shares covered by such Option will revert to the Plan.

(iv)Death of Participant. If a Participant dies while a Service Provider, the Option may be exercised following the Participant’s death within such period of time as is specified in the Award Agreement to the extent that the Option is vested on the date of death (but in no event may the Option be

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exercised later than the expiration of the term of such Option as set forth in the Award Agreement), by the Participant’s designated beneficiary, provided such beneficiary has been designated prior to Participant’s death in a form acceptable to the Administrator. If no such beneficiary has been designated by the Participant, then such Option may be exercised by the personal representative of the Participant’s estate or by the person(s) to whom the Option is transferred pursuant to the Participant’s will or in accordance with the laws of descent and distribution. In the absence of a specified time in the Award Agreement, the Option will remain exercisable for twelve (12) months following Participant’s death. Unless otherwise provided by the Administrator, if on the date of termination the Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will revert to the Plan. If the Option is not so exercised within the time specified herein, the Option will terminate, and the Shares covered by such Option will revert to the Plan.

(v)Termination for Cause. If a Participant ceases to be a Service Provider as a result of being terminated for Cause, any outstanding Option (including any vested portion thereof) held by such Participant shall immediately terminate in its entirety upon the Participant being first notified of his or her termination for Cause and the Participant will be prohibited from exercising his or her Option from and after the date of such termination. All the Participant’s rights under any Option, including the right to exercise the Option, may be suspended pending an investigation of whether Participant will be terminated for Cause.

7.Restricted Stock.

(a)Grant of Restricted Stock. Subject to the terms and provisions of the Plan, the Administrator, at any time and from time to time, may grant Shares of Restricted Stock to Service Providers in such amounts as the Administrator, in its sole discretion, will determine.

(b)Restricted Stock Agreement. Each Award of Restricted Stock will be evidenced by an Award Agreement that will specify the Period of Restriction, the number of Shares granted, and such other terms and conditions as the Administrator, in its sole discretion, will determine. Unless the Administrator determines otherwise, the Company as escrow agent will hold Shares of Restricted Stock until the restrictions on such Shares have lapsed.

(c)Transferability. Except as provided in this Section 7 or the Award Agreement, Shares of Restricted Stock may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated until the end of the applicable Period of Restriction.

(d)Other Restrictions. The Administrator, in its sole discretion, may impose such other restrictions on Shares of Restricted Stock as it may deem advisable or appropriate.

(e)Removal of Restrictions. Except as otherwise provided in this Section 7, Shares of Restricted Stock covered by each Restricted Stock grant made under the Plan will be released from escrow as soon as practicable after the last day of the Period of Restriction or at such other time as the Administrator may determine. The Administrator, in its discretion, may accelerate the time at which any restrictions will lapse or be removed.

(f)Voting Rights. During the Period of Restriction, Service Providers holding Shares of Restricted Stock granted hereunder may exercise full voting rights with respect to those Shares, unless the Administrator determines otherwise.

(g)Dividends and Other Distributions. During the Period of Restriction, Service Providers holding Shares of Restricted Stock will be entitled to receive all dividends and other distributions paid with

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respect to such Shares, unless the Administrator provides otherwise. If any such dividends or distributions are paid in Shares, the Shares will be subject to the same restrictions, including, without limitation, restrictions on transferability and forfeitability, as the Shares of Restricted Stock with respect to which they were paid.

(h)Return of Restricted Stock to Company. On the date set forth in the Award Agreement, the Restricted Stock for which restrictions have not lapsed will be cancelled and returned as unissued shares to the Company and again will become available for grant under the Plan.

8.Restricted Stock Units.

(a)Grant. Restricted Stock Units may be granted at any time and from time to time as determined by the Administrator. After the Administrator determines that it will grant Restricted Stock Units under the Plan, it will advise the Participant in an Award Agreement of the terms, conditions, and restrictions (if any) related to the grant, including the number of Restricted Stock Units.

(b)Vesting Criteria and Other Terms. The Administrator will set vesting criteria in its discretion, which, depending on the extent to which the criteria are met, will determine the number of Restricted Stock Units that will be paid out to the Participant. The Administrator may set vesting criteria based upon the achievement of Company-wide, business unit, or individual goals (including, but not limited to, continued employment), or any other basis (including the passage of time) determined by the Administrator in its discretion.

(c)Earning Restricted Stock Units. Upon meeting the applicable vesting criteria, the Participant will be entitled to receive a payout as determined by the Administrator. Notwithstanding the foregoing, at any time after the grant of Restricted Stock Units, the Administrator, in its sole discretion, may reduce or waive any vesting criteria that must be met to receive a payout.

(d)Dividend Equivalents. The Administrator may, in its sole discretion, award dividend equivalents in connection with the grant of Restricted Stock Units that may be settled in cash, in Shares of equivalent value, or in some combination thereof.

(e)Form and Timing of Payment. Payment of earned Restricted Stock Units will be made upon the date(s) determined by the Administrator and set forth in the Award Agreement. The Administrator, in its sole discretion, may only settle earned Restricted Stock Units in cash, Shares, or a combination of both.

(f)Cancellation. On the date set forth in the Award Agreement, all Shares underlying any unvested, unlapsed unearned Restricted Stock Units will be forfeited to the Company for future issuance.

9.Stock Appreciation Rights.

(a)Grant of Stock Appreciation Rights. Subject to the terms and conditions of the Plan, a Stock Appreciation Right may be granted to Service Providers at any time and from time to time as will be determined by the Administrator, in its sole discretion.

(b)Number of Shares. The Administrator will have complete discretion to determine the number of Stock Appreciation Rights granted to any Service Provider.

(c)Exercise Price and Other Terms. The per share exercise price for the Shares to be issued pursuant to exercise of a Stock Appreciation Right will be determined by the Administrator and will be no

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less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant. Otherwise, the Administrator, subject to the provisions of the Plan, will have complete discretion to determine the terms and conditions of Stock Appreciation Rights granted under the Plan.

(d)Stock Appreciation Right Agreement. Each Stock Appreciation Right grant will be evidenced by an Award Agreement that will specify the exercise price, the term of the Stock Appreciation Right, the conditions of exercise, and such other terms and conditions as the Administrator, in its sole discretion, will determine.

(e)Expiration of Stock Appreciation Rights. A Stock Appreciation Right granted under the Plan will expire upon the date determined by the Administrator, in its sole discretion, and set forth in the Award Agreement. Notwithstanding the foregoing, the rules of Section 6(b) relating to the maximum term and Section 6(d) relating to exercise also will apply to Stock Appreciation Rights.

(f)Payment of Stock Appreciation Right Amount. Upon exercise of a Stock Appreciation Right, a Participant will be entitled to receive payment from the Company in an amount determined by multiplying:

(i)The difference between the Fair Market Value of a Share on the date of exercise over the exercise price; times

(ii)The number of Shares with respect to which the Stock Appreciation Right is exercised.

At the discretion of the Administrator, the payment upon Stock Appreciation Right exercise may be in cash, in Shares of equivalent value, or in some combination thereof.

10.Performance Units and Performance Shares.

(a)Grant of Performance Units/Shares. Performance Units and Performance Shares may be granted to Service Providers at any time and from time to time, as will be determined by the Administrator, in its sole discretion. The Administrator will have complete discretion in determining the number of Performance Units and Performance Shares granted to each Participant.

(b)Value of Performance Units/Shares. Each Performance Unit will have an initial value that is established by the Administrator on or before the date of grant. Each Performance Share will have an initial value equal to the Fair Market Value of a Share on the date of grant.

(c)Performance Goals and Other Terms. The Administrator will set Performance Goals or other vesting provisions (including, without limitation, continued status as a Service Provider) in its discretion which, depending on the extent to which they are met, will determine the number or value of Performance Units/Shares that will be paid out to the Service Providers. Each Award of Performance Units/Shares will be evidenced by an Award Agreement that will specify the Performance Period, and such other terms and conditions as the Administrator, in its sole discretion, will determine. Without limiting the foregoing, the Committee shall adjust any Performance Goals or other feature of an Award that relates to or is wholly or partially based on the number of, or the value of, any stock of the Company, to reflect any stock dividend or split, repurchase, recapitalization, combination, or exchange of shares or other similar changes in such stock.

(d)Earning of Performance Units/Shares. After the applicable Performance Period has ended, the holder of Performance Units/Shares will be entitled to receive a payout of the number of

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Performance Units/Shares earned by the Participant over the Performance Period, to be determined as a function of the extent to which the corresponding Performance Goals or other vesting provisions have been achieved. After the grant of a Performance Unit/Share, the Administrator, in its sole discretion, may reduce or waive any Performance Goals or other vesting provisions for such Performance Unit/Share.

(e)Form and Timing of Payment of Performance Units/Shares. Payment of earned Performance Units/Shares will be made upon the time set forth in the applicable Award Agreement. The Administrator, in its sole discretion, may pay earned Performance Units/Shares in the form of cash, in Shares (which have an aggregate Fair Market Value equal to the value of the earned Performance Units/Shares at the close of the applicable Performance Period) or in a combination thereof.

(f)Cancellation of Performance Units/Shares. On the date set forth in the Award Agreement, all unearned or unvested Performance Units/Shares will be forfeited to the Company, and again will be available for grant under the Plan.

11.Outside Director Limitations. No Outside Director may receive Awards under the Plan that, when combined with cash compensation received for service as an Outside Director, exceeds $1,000,000 in a calendar year. Grant date fair value for purposes of Awards to Outside Directors under the Plan will be determined as follows: (a) for Options and Stock Appreciation Rights, grant date fair value will be calculated using the Black-Scholes valuation methodology on the date of grant of such Option or Stock Appreciation Right and (b) for all other Awards other than Options and Stock Appreciation Rights, grant date fair value will be determined by either (i) calculating the product of the Fair Market Value per Share on the date of grant and the aggregate number of Shares subject to the Award or (ii) calculating the product using an average of the Fair Market Value over a number of trading days and the aggregate number of Shares subject to the Award. Awards granted to an individual while he or she was serving in the capacity as an Employee or while he or she was an Independent Contractor but not an Outside Director will not count for purposes of the limitations set forth in this Section 11.

12.Leaves of Absence/Transfer Between Locations. The Administrator shall have the discretion to determine at any time whether and to what extent the vesting of Awards shall be suspended during any leave of absence; provided, however, that in the absence of such determination, vesting of Awards shall continue during any paid leave and shall be suspended during any unpaid leave (unless otherwise required by Applicable Laws). A Participant will not cease to be an Employee in the case of (i) any leave of absence approved by the Participant’s employer or (ii) transfers between locations of the Company or between the Company, its Parent, or any Subsidiary. If an Employee is holding an Incentive Stock Option and such leave exceeds three (3) months then, for purposes of Incentive Stock Option status only, such Employee’s service as an Employee shall be deemed terminated on the first (1st) day following such three (3) month period and the Incentive Stock Option shall thereafter automatically treated for tax purposes as a Nonstatutory Stock Option in accordance with Applicable Laws, unless reemployment upon the expiration of such leave is guaranteed by contract or statute, or unless provided otherwise pursuant to a written Company policy.

13.Transferability of Awards. Unless determined otherwise by the Administrator, an Award may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Participant, only by the Participant. If the Administrator makes an Award transferable, such Award will contain such additional terms and conditions as the Administrator deems appropriate.

14.Adjustments; Dissolution or Liquidation; Merger or Change in Control.

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(a)Adjustments. In the event of a stock split, reverse stock split, stock dividend, combination, consolidation, recapitalization (including a recapitalization through a large nonrecurring cash dividend) or reclassification of the Shares, subdivision of the Shares, a rights offering, a reorganization, merger, spin-off, split-up, repurchase, or exchange of Common Stock or other securities of the Company or other significant corporate transaction, or other change affecting the Common Stock occurs, the Administrator, in order to prevent dilution, diminution or enlargement of the benefits or potential benefits intended to be made available under the Plan, will, in such manner as it may deem equitable, adjust the number, kind and class of securities that may be delivered under the Plan and/or the number, class, kind and price of securities covered by each outstanding Award. Notwithstanding the forgoing, all adjustments under this Section 14 shall be made in a manner that does not result in taxation under Code Section 409A.

(b)Dissolution or Liquidation. In the event of the proposed winding up, dissolution or liquidation of the Company, the Administrator will notify each Participant as soon as practicable prior to the effective date of such proposed transaction. To the extent it has not been previously exercised or settled, an Award will terminate immediately prior to the consummation of such proposed action.

(c)Corporate Transaction. In the event of (i) a transfer of all or substantially all of the Company’s assets, (ii) a merger, consolidation or other capital reorganization or business combination transaction of the Company with or into another corporation, entity or person, or (iii) the consummation of a transaction, or series of related transactions, in which any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of more than 50% of the Company’s then outstanding capital stock (a “Corporate Transaction”), each outstanding Award (vested or unvested) will be treated as the Administrator determines, which determination may be made without the consent of any Participant and need not treat all outstanding Awards (or portion thereof) in an identical manner. Such determination, without the consent of any Participant, may provide (without limitation) for one or more of the following in the event of a Corporate Transaction: (A) the continuation of such outstanding Awards by the Company (if the Company is the surviving corporation); (B) the assumption of such outstanding Awards by the surviving corporation or its parent; (C) the substitution by the surviving corporation or its parent of new options or other equity awards for such Awards; (D) the cancellation of such Awards in exchange for a payment to the Participants equal to the excess of (1) the Fair Market Value of the Shares subject to such Awards as of the closing date of such Corporate Transaction over (2) the exercise price or purchase price paid or to be paid (if any) for the Shares subject to the Awards; provided further, that at the discretion of the Committee, such payment may be subject to the same conditions that apply to the consideration that will be paid to holders of Shares in connection with the transaction; provided, however, that any payout in connection with a terminated award shall comply with Section 409A of the Code to the extent necessary to avoid taxation thereunder; or © the opportunity for Participants to exercise the Options prior to the occurrence of the Corporate Transaction and the termination (for no consideration) upon the consummation of such Corporate Transaction of any Options not exercised prior thereto.

(d)Change in Control. An Award may be subject to additional acceleration of vesting and exercisability upon or after a Change in Control as may be provided in the Award Agreement for such Award or as may be provided in any other written agreement between the Company or any Affiliate and the Participant, but in the absence of such provision, no such acceleration will occur.

15.Tax.

(a)Withholding Requirements. Prior to the delivery of any Shares or cash pursuant to an Award (or exercise thereof) or prior to any time the Award or Shares are subject to taxation or other Tax-Related Items, the Company and/or the Participant’s employer will have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy any

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Tax-Related Items or other items that are required to be withheld or deducted or otherwise applicable with respect to such Award.

(b)Withholding Arrangements. The Administrator, in its sole discretion and pursuant to such procedures as it may specify from time to time, may permit a Participant to satisfy such withholding or deduction obligations or any other Tax-Related Items, in whole or in part by (without limitation) (a) paying cash, (b) electing to have the Company withhold otherwise deliverable cash or Shares, or (c) delivering to the Company already-owned Shares; provided that, unless specifically permitted by the Company, any proceeds derived from a cashless exercise must be an approved broker-assisted cashless exercise or the cash or Shares withheld or delivered must be limited to avoid financial accounting charges under applicable accounting guidance or Shares must have been previously held for the minimum duration required to avoid financial accounting charges under applicable accounting guidance. Except as otherwise determined by the Administrator, the Fair Market Value of the Shares to be withheld or delivered will be determined as of the date that the amounts are required to be withheld or deducted.

(c)Compliance With Code Section 409A. Awards will be designed and operated in such a manner that they are either exempt from the application of, or comply with, the requirements of Code Section 409A such that the grant, payment, settlement or deferral will not be subject to the additional tax or interest applicable under Code Section 409A. The Plan and each Award Agreement under the Plan is intended to meet the requirements of Code Section 409A (or an exemption therefrom) and will be construed and interpreted in accordance with such intent, except as otherwise determined in the sole discretion of the Administrator. To the extent that an Award or payment, or the settlement or deferral thereof, is subject to Code Section 409A the Award will be granted, paid, settled or deferred in a manner that will meet the requirements of Code Section 409A (or an exemption therefrom), such that the grant, payment, settlement or deferral will not be subject to the additional tax or interest applicable under Code Section 409A. In no event will the Company be responsible for or reimburse a Participant for any taxes or other penalties incurred as a result of applicable of Code Section 409A.

16.No Effect on Employment or Service. Neither the Plan nor any Award will confer upon a Participant any right with respect to continuing the Participant’s relationship as a Service Provider with the Company or any Subsidiary or Affiliate, nor will they interfere in any way with the Participant’s right or the Company’s or any Subsidiary or Affiliate’s right to terminate such relationship at any time, with or without cause, to the extent permitted by Applicable Laws.

17.Date of Grant. The date of grant of an Award will be, for all purposes, the date on which the Administrator makes the determination granting such Award, or such other later date as is determined by the Administrator. Notice of the determination will be provided to each Participant within a reasonable time after the date of such grant.

18.Corporate Records Control. In the event that the corporate records (e.g., Board consents, resolutions or minutes) documenting the corporate action constituting the grant contain terms (e.g., exercise price, vesting schedule or number of shares) that are inconsistent with those in the Award Agreement or related grant documents as a result of a clerical error in the papering of the Award Agreement or related grant documents, the corporate records will control and the Participant will have no legally binding right to the incorrect term in the Award Agreement or related grant documents.

19.Clawback/Recovery. All Awards granted under the Plan will be subject to recoupment in accordance with any clawback policy that the Company is required to adopt pursuant to the listing standards of any national securities exchange or association on which the Company’s securities are listed or as is otherwise required by the U.S. Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law. In addition, the Board may impose such other clawback, recovery or recoupment provisions

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in an Award Agreement as the Board determines necessary or appropriate, including but not limited to a reacquisition right in respect of previously acquired Shares or other cash or property upon the occurrence of an event constituting Cause. No recovery of compensation under such a clawback policy will be an event giving rise to a right to resign for “good reason” or “constructive termination” (or similar term) under any agreement with the Company.

20.Term of Plan. Subject to Section 24 of the Plan, the restatement of the Company’s 2014 Stock Plan into this Plan will become effective as of the Effective Date. The Plan will continue in effect for a term of ten (10) years measured from the earlier of the date the Board approves the restatement of the Company’s 2014 Stock Plan into this Plan or the approval of such restatement by the Company’s stockholders, unless terminated earlier under Section 21 of the Plan.

21.Amendment and Termination of the Plan.

(a)Amendment and Termination. The Administrator may at any time amend, alter, suspend or terminate the Plan.

(b)Stockholder Approval. The Company will obtain stockholder approval of any Plan amendment to the extent necessary and desirable to comply with Applicable Laws.

(c)Effect of Amendment or Termination. No amendment, alteration, suspension or termination of the Plan will materially impair the rights of any Participant, unless mutually agreed otherwise between the Participant and the Administrator, which agreement must be in writing and signed by the Participant and the Company. Termination of the Plan will not affect the Administrator’s ability to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such termination.

22.Conditions Upon Issuance of Shares.

(a)Legal Compliance. Shares will not be issued pursuant to the exercise or vesting (as applicable) of an Award unless the exercise or vesting of such Award and the issuance and delivery of such Shares will comply with Applicable Laws and will be further subject to the approval of counsel for the Company with respect to such compliance.

(b)Investment Representations. As a condition to the exercise of an Award, the Company may require the person exercising such Award to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required.

23.Inability to Obtain Authority. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, will relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority will not have been obtained.

24.Stockholder Approval. The Plan will be subject to approval by the stockholders of the Company within twelve (12) months after the date the Plan is adopted by the Board. Such stockholder approval will be obtained in the manner and to the degree required under Applicable Laws.

25.Governing Law. The Plan and all Awards hereunder shall be construed in accordance with and governed by the laws of the State of California, but without regard to its conflict of law provisions.

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QUINCE THERAPEUTICS, INC.

2019 EQUITY INCENTIVE PLAN

STOCK OPTION AWARD AGREEMENT

Unless otherwise defined herein, the terms defined in the Quince Therapeutics, Inc. 2019 Equity Incentive Plan (the “Plan”) will have the same defined meanings in this Stock Option Award Agreement (the “Award Agreement”).

I. NOTICE OF STOCK OPTION GRANT

Participant Name:

You have been granted an Option to purchase Common Stock of Quince Therapeutics, Inc. (the “Company”), subject to the terms and conditions of the Plan and this Award Agreement, as follows:

Grant Number:
:
Date of Grant:
Vesting Commencement Date:
Exercise Price per Share (US$):	USD $
Total Number of Shares:
Total Exercise Price:	USD $
Type of Option:	U.S. Incentive Stock Option
	Nonstatutory Stock Option
Term/Expiration Date:

Vesting Schedule:

Subject to Section 2 of the Award Agreement, this Option may be exercised, in whole or in part, in accordance with the following schedule:

Termination Period:

This Option will be exercisable for three (3) months after Participant ceases to be a Service Provider, unless such termination is due to Participant’s death, Disability or Cause. If Participant’s relationship as a Service Provider is terminated as a result of the Service Provider’s death or Disability, this Option will be exercisable for twelve (12) months after Participant ceases to be a Service Provider. If Participant’s relationship as a Service Provider is terminated for Cause, this Option (including any vested portion thereof) shall immediately terminate in its entirety upon the

Participant’s being first notified such termination for Cause and Participant will be prohibited from exercising this Option from and after the date of such termination. Notwithstanding the foregoing, in no event may this Option be exercised after the Term/Expiration Date as provided above and may be subject to earlier termination as provided in Section 14 of the Plan.

By Participant’s signature and the signature of the Company’s representative below, or by Participant otherwise accepting or exercising this Option, Participant and the Company agree that this Option is granted under and governed by the terms and conditions of the Plan and this Award Agreement, including the Terms and Conditions of Stock Option Grant (including any country- specific addendum thereto), attached hereto as Exhibit A, all of which are made a part of this document. Participant has reviewed the Plan and this Award Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Award Agreement and fully understands all provisions of the Plan and Award Agreement. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator on any questions relating to the Plan and Award Agreement.

PARTICIPANT:	QUINCE THERAPEUTICS, INC.
Signature	By
Print Name:	Title:

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EXHIBIT A

TERMS AND CONDITIONS OF STOCK OPTION GRANT

26.Grant of Option. The Company hereby grants to the Participant named in the Notice of Stock Option Grant attached as Part I of this Award Agreement (the “Participant”) an option (the “Option”) to purchase the number of Shares set forth in the Notice of Stock Option Grant, at the exercise price per Share set forth in the Notice of Stock Option Grant (the “Exercise Price”), subject to all of the terms and conditions set forth in the Notice of Stock Option Grant and in this Award Agreement (the definition of which shall include any country- specific addendum hereto) and the Plan, which is incorporated herein by reference. Subject to Section 21 of the Plan, if there is a conflict between the terms and conditions of the Plan and the terms and conditions of this Award Agreement, the terms and conditions of the Plan will prevail unless specifically amended or overridden herein.

If designated in the Notice of Stock Option Grant as an Incentive Stock Option (“ISO”), this Option is intended to qualify as an ISO to the maximum extent permitted under Section 422 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”). However, if this Option is intended to be an ISO, to the extent that it exceeds the USD $100,000 rule of Code Section 422(d) it will be treated as a Nonstatutory Stock Option (“NSO”). Further, if for any reason this Option (or portion thereof) will not qualify as an ISO, then, to the extent of such non-qualification, such Option (or portion thereof) shall be regarded as a NSO granted under the Plan. In no event will the Administrator, the Company or any Parent or Subsidiary or any of their respective employees or directors have any liability to Participant (or any other person) due to the failure of the Option to qualify for any reason as an ISO.

27.Vesting Schedule. Except as provided in Section 3, the Option awarded by this Award Agreement will vest in accordance with the vesting provisions set forth in the Notice of Stock Option Grant. Options scheduled to vest on a certain date or upon the occurrence of a certain condition will not vest in accordance with any of the provisions of this Award Agreement, unless Participant will have been continuously a Service Provider from the Date of Grant until the date such vesting occurs. Service Provider status for purposes of this Award will end on the day that Participant is no longer actively providing services as an Employee, Director, or Independent Contractor and will not be extended by any notice period or “garden leave” that may be required contractually or under any Applicable Laws. Notwithstanding the foregoing, the Administrator (or any delegate) shall have the sole and absolute discretion to determine when Participant is no longer providing active service for purposes of Service Provider status and participation in the Plan.

28.Exercise of Option.

(a)Right to Exercise. This Option may be exercised only within the term set forth in the Notice of Stock Option Grant and may be exercised during such term only in accordance with the Plan and the terms of this Award Agreement.

(b)Method of Exercise. This Option is exercisable by delivery of an exercise notice, in the form attached as Exhibit B (the “Exercise Notice”) or in a manner and pursuant to such procedures as the Administrator may determine, which will state the election to exercise the

Option, the number of Shares in respect of which the Option is being exercised (the “Exercised Shares”), and such other representations and agreements as may be required by the Company pursuant to the provisions of the Plan. The Exercise Notice will be completed by Participant and delivered to the Company. The Exercise Notice will be accompanied by payment of the aggregate Exercise Price as to all Exercised Shares together with any Tax-Related Items (as defined below) required to be withheld, paid or provided pursuant to any Applicable Laws. This Option will be deemed to be exercised upon receipt by the Company of such fully executed Exercise Notice accompanied by such aggregate Exercise Price and any other requirements or restrictions that may be imposed by the Company to comply with Applicable Laws or facilitate administration of the Plan. Notwithstanding the above, Participant understands that the Applicable Laws of the country in which Participant is residing or working at the time of grant, vesting, and/or exercise of this Option (including any rules or regulations governing securities, foreign exchange, tax, labor or other matters) may restrict or prevent exercise of this Option, and neither the Company nor any Parent or Subsidiary assumes any liability in relation to this Option in such case.

29.Method of Payment. Payment of the aggregate Exercise Price will be by any of the following, or a combination thereof, at the election of Participant unless otherwise specified by the Company in its sole discretion:

(a)cash (U.S. dollars); or

(b)check (denominated in U.S. dollars); or

(c)consideration received by the Company under a formal cashless exercise program adopted by the Company in connection with the Plan.

Participant understands and agrees that, unless otherwise permitted by the Company, any cross-border remittance made to exercise this Option or transfer proceeds received upon the sale of Shares must be made through a locally authorized financial institution or registered foreign exchange agency and may require the Participant to provide such entity with certain information regarding the transaction.

30.Tax Obligations.

(a)Withholding Taxes. Regardless of any action the Company or Participant’s employer (the “Employer”) takes with respect to any or all applicable national, local, or other tax or social contribution, withholding, required deductions, or other payments, if any, that arise upon the grant, vesting, or exercise of this Option, the holding or subsequent sale of Shares, and the receipt of dividends, if any, or otherwise in connection with this Option or the Shares (“Tax-Related Items”), Participant acknowledges and agrees that the ultimate liability for all Tax-Related Items legally due by Participant is and remains Participant’s responsibility and may exceed any amount actually withheld by the Company or the Employer. Participant further acknowledges and agrees that Participant is solely responsible for filing all relevant documentation that may be required in relation to this Option or any Tax-Related Items (other than filings or documentation that is the specific obligation of the Company or a Parent, Subsidiary, or Employer pursuant to Applicable Law) such as but not limited to personal income tax returns or reporting statements in relation to the grant, vesting or exercise of this Option, the holding of Shares or any bank or brokerage account, the subsequent sale of Shares, and the receipt of any dividends. Participant further acknowledges that the Company and the Employer (a) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Option, including the grant, vesting, or exercise of the Option, the subsequent sale of Shares acquired under the Plan and the receipt of dividends, if any; and (b) does not commit to and is under no obligation to structure the terms of the Option or any aspect of the Option to reduce or eliminate Participant’s liability for Tax-Related Items, or achieve any particular tax result.

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Participant also understands that Applicable Laws may require varying Share or Option valuation methods for purposes of calculating Tax-Related Items, and the Company assumes no responsibility or liability in relation to any such valuation or for any calculation or reporting of income or Tax-Related Items that may be required of Participant under Applicable Laws. Further, if Participant has become subject to tax in more than one jurisdiction between the date of grant and the date of any relevant taxable event, Participant acknowledges that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.

(b)Satisfaction of Tax-Related Items. As a condition to the grant, vesting and exercise of this Option and as set forth in Section 15 of the Plan, Participant hereby agrees to make adequate provision for the satisfaction of (and will indemnify the Company and any Parent or Subsidiary for) any Tax-Related Items. No payment will be made to Participant (or his or her estate or beneficiary) related to an Option, and no Shares will be issued pursuant to an Option, unless and until satisfactory arrangements (as determined by the Company) have been made by Participant with respect to the payment of any Tax-Related Items obligations of the Company and/or any Parent, Subsidiary, or Employer with respect to the grant, vesting or exercise of the Option. In this regard, Participant authorizes the Company and/or any Parent, Subsidiary, or Employer, or their respective agents, at their discretion, to satisfy the obligations with regard to all Tax-Related Items by one or a combination of the following:

(i)withholding from Participant’s wages or other cash compensation paid to Participant by the Company or the Employer; or

(ii)withholding from proceeds of the sale of Shares acquired upon exercise of the Option, either through a voluntary sale or through a mandatory sale arranged by the Company (on Participant’s behalf pursuant to this authorization); or

(iii)withholding in Shares to be issued upon exercise of the Option.

If the obligation for Tax-Related Items is satisfied by withholding Shares, the Participant is deemed to have been issued the full number of Shares purchased for tax purposes, notwithstanding that a number of Shares is held back solely for the purpose of paying the Tax-Related Items due as a result of the Participant’s participation in the Plan. Participant shall pay to the Company or a Parent, Subsidiary, or Employer any amount of Tax-Related Items that the Company may be required to withhold, pay or otherwise provide for as a result of Participant’s participation in the Plan that cannot be satisfied by one or more of the means previously described in this paragraph 5. Participant acknowledges and agrees that the Company may refuse to honor the exercise and refuse to issue or deliver the Shares or the proceeds of the sale of Shares if Participant fails to comply with his or her obligations in connection with the Tax-Related Items.

(c)Notice of Disqualifying Disposition of ISO Shares. If the Option granted to Participant herein is an ISO, and if Participant sells or otherwise disposes of any of the Shares acquired pursuant to the ISO on or before the later of (i) the date two (2) years after the Date of Grant, or (ii) the date one (1) year after the date of exercise, Participant will immediately notify the Company in writing of such disposition.

(d)Code Section 409A (Applicable Only to Participants Subject to U.S. Taxes). Under Code Section 409A, an option that is granted with a per Share exercise price that is determined by the Internal Revenue Service (the “IRS”) to be less than the Fair Market Value of a Share on the date of grant (a “Discount Option”) may be considered “deferred compensation.” A Discount Option may result in (i) income recognition by Participant prior to the exercise of the option, (ii) an additional twenty percent (20%) federal income tax, and (iii) potential penalty and interest charges. The Discount Option may also result in additional state income, penalty and interest charges to the Participant. Participant acknowledges that the

Company cannot and has not guaranteed that the IRS will agree that the per Share exercise price of this Option equals or exceeds the Fair Market Value of a Share on the Date of Grant in a later examination. Participant agrees that if the IRS determines that the Option was granted with a per Share exercise price that was less than the Fair Market Value of a Share on the date of grant, Participant will be solely responsible for Participant’s costs related to such a determination.

31.6. Rights as Stockholder. Neither Participant nor any person claiming under or through Participant will have any of the rights or privileges of a stockholder of the Company in respect of any Shares unless and until such Shares will have been issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). After such issuance, Participant will have all the rights of a stockholder of the Company with respect to voting such Shares and receipt of dividends and distributions on such Shares, but prior to such issuance, Participant will not have any rights to dividends and/or distributions on such Shares.

32.No Guarantee of Continued Service or Grants. PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF SHALL OCCUR ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE EMPLOYER OR CONTRACTING ENTITY (AS APPLICABLE) AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THE OPTION OR ACQUIRING SHARES HEREUNDER. PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT THIS AWARD AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND WILL NOT INTERFERE IN ANY WAY WITH PARTICIPANT’S RIGHT OR THE RIGHT OF THE EMPLOYER OR THE COMPANY, PARENT, OR SUBSIDIARY TO TERMINATE PARTICIPANT’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE (SUBJECT TO APPLICABLE LOCAL LAWS).

33.Nature of Grant. In accepting the Option, Participant acknowledges, understands and agrees that:

(a)the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time;

(b)the grant of the Option is voluntary and occasional and does not create any contractual or other right to receive future grants of Options, or benefits in lieu of Options even if Options have been granted repeatedly in the past;

(c)all decisions with respect to future awards of Options, if any, will be at the sole discretion of the Company;

(d)Participant’s participation in the Plan is voluntary;

(e)the Option and the Shares subject to the Option are extraordinary items that do not constitute regular compensation for services rendered to the Company or the Employer, and that are outside the scope of Participant’s employment contract, if any;

(f)the Option and the Shares subject to the Option are not intended to replace any pension rights or compensation;

(g)the Option and the Shares subject to the Option are not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance,

resignation, termination, redundancy, dismissal, or end of service payments, bonuses, long-service awards, vacation pay, pension or retirement or welfare benefits or similar payments and in no event should be considered as compensation for, or relating in any way to, past services for the Company or the Employer, subject to Applicable Laws;

(h)the future value of the underlying Shares is unknown and cannot be predicted with certainty; further, if Participant exercises the Option and obtains Shares, the value of the Shares acquired upon exercise may increase or decrease in value, even below the Exercise Price;

(i)Participant also understands that neither the Company nor any affiliate is responsible for any foreign exchange fluctuation between local currency and the United States Dollar or the selection by the Company or any affiliate in its sole discretion of an applicable foreign currency exchange rate that may affect the value of the Option (or the calculation of income or Tax-Related Items thereunder);

(j)in consideration of the grant of the Option, no claim or entitlement to compensation or damages shall arise from forfeiture of the Option resulting from termination of employment by the Employer (for any reason whatsoever and whether or not in breach of Applicable Laws, including, without limitation, applicable local labor laws), and Participant irrevocably releases the Employer from any such claim that may arise; if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, Participant shall be deemed irrevocably to have waived his or her entitlement to pursue such claim; and

(k)the Option and the benefits under the Plan, if any, will not automatically transfer to another company in the case of a merger, take-over or transfer of liability.

34.No Advice Regarding Grant. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding Participant’s participation in the Plan, or Participant’s acquisition or sale of the underlying Shares. Participant is hereby advised to consult with his or her own personal tax, legal and financial advisors regarding Participant’s participation in the Plan before taking any action related to the Plan.

35.Data Privacy.

(a)To the extent that the processing of Participant’s personal data by the Company or its affiliates under and/or in connection with this Award Agreement falls within the territorial scope of (i) Regulation (EU) 2016/679 of the European Parliament and of the Council of 27th April 2016 (the “EU GDPR”), (ii) the EU GDPR as it forms part of UK law by virtue of section 3 of the European Union (Withdrawal) Act 2018, as amended (the “UK GDPR”), and/or (iii) equivalent legislation and/or legislation implementing and/or supplementing the EU GDPR or UK GDPR in any member state of the European Economic Area or the UK or Switzerland, Company and/or its Affiliates will carry out such processing in accordance with their EEA/UK privacy notice from time to time in force, the latest version of which has been provided to Participant.

(b)Except where (a) above applies, Participant explicitly and unambiguously acknowledges and consents to the collection, use, transfer and other processing of Participant’s personal data as described in this paragraph (b) by the Company and its affiliates for the purpose of implementing, administering and managing Participant’s participation in the Plan. Participant understands that the Company and its affiliates hold certain personal data about Participant, including, but not limited to, Participant’s name, home address, telephone number, date of birth, social security number (or other identification number), salary, nationality, job title, any shares of stock or directorships held by Participant in the Company, details of all options or any other entitlement to shares of Common Stock awarded, cancelled, purchased, exercised, vested,

unvested or outstanding in Participant’s favor for the purpose of implementing, managing and administering the Plan. Participant understands that this personal data may be transferred to any third parties assisting in the implementation, administration and management of the Plan.

36.Foreign Asset/Account, Exchange Control and Tax Reporting. Participant may be subject to foreign asset/account, exchange control and/or tax reporting requirements as a result of the acquisition, holding and/or transfer of shares of Common Stock or cash (including dividends and the proceeds arising from the sale of shares of Common Stock) derived from Participant’s participation in the Plan in, to and/or from a brokerage/bank account or legal entity located outside Participant’s country of residence. The applicable laws in Participant’s country of residence may require that Participant report such accounts, assets and balances therein, the value thereof and/or the transactions related thereto to the applicable authorities in such country. Participant may also be required to repatriate sale proceeds or other funds received as a result of Participant’s participation in the Plan to Participant’s country of residence through a designated bank or broker within a certain time after receipt. Participant acknowledges that it is Participant’s responsibility to be compliant with such regulations and Participant is encouraged to consult with Participant’s personal legal advisor for any details.

37.Address for Notices. Any notice to be given to the Company under the terms of this Award Agreement will be addressed to the Company, in care of its Secretary at Quince Therapeutics, Inc., 611 Gateway Blvd., Suite 273, South San Francisco, California 94080, or at such other address as the Company may hereafter designate in writing.

38.Non-Transferability of Option. This Option may not be transferred in any manner otherwise than by will or by the laws of descent or distribution and may be exercised during the lifetime of Participant only by Participant.

39.Binding Agreement. Subject to the limitation on the transferability of this Option contained herein, this Award Agreement will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.

40.Additional Conditions to Issuance of Stock. If at any time the Company will determine, in its discretion, that the listing, registration, qualification or compliance of the Shares upon or with any securities exchange or under any Applicable Laws, the tax code and related regulations or the consent or approval of any governmental regulatory authority is necessary or desirable as a condition to the grant or vesting of the Option or purchase by, or issuance of Shares to, Participant (or his or her estate) hereunder, such purchase or issuance will not occur unless and until such listing, registration, qualification, compliance, consent or approval will have been completed, effected or obtained free of any conditions not acceptable to the Company. The Company will make all reasonable efforts to meet the requirements of any Applicable Laws. Assuming such compliance, for purposes of the Tax-Related Items, the Exercised Shares will be considered transferred to Participant on the date the Option is exercised with respect to such Exercised Shares. The Company shall not be obligated to issue any Shares pursuant to this Option at any time if the issuance of Shares, or the exercise of an Option by Participant, violates or is not in compliance with any Applicable Laws.

41.Lock-Up Agreement. In connection with the initial public offering of the Company’s securities, Participant hereby agrees not to offer, pledge, sell, contract to sell, make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any securities of the Company however and whenever acquired (other than those included in the registration) without the prior written consent of the Company and the managing underwriters for such offering for such period of time (not to exceed 180 days) from the effective date of such registration as may be requested by the Company or such managing underwriters and to execute an agreement reflecting the foregoing as may be requested by the underwriters at the time of the

Company’s initial public offering. In addition, upon request of the Company or the underwriters managing a public offering of the Company’s securities (other than the initial public offering), Participant hereby agrees to be bound by similar restrictions, and to sign a similar agreement, in connection with no more than one additional registration statement filed within 12 months after the closing date of the initial public offering, provided that the duration of the lock-up period with respect to such additional registration shall not exceed 90 days from the effective date of such additional registration statement. Notwithstanding the foregoing, if during the last 17 days of the restricted period, the Company issues an earnings release or material news or a material event relating to the Company occurs, or prior to the expiration of the restricted period the Company announces that it will release earnings results during the 16-day period beginning on the last day of the restricted period, then, upon the request of the managing underwriter, to the extent required by any FINRA rules, the restrictions imposed by this subsection shall continue to apply until the end of the third trading day following the expiration of the 15-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event. In no event will the restricted period extend beyond 216 days after the effective date of the registration statement. In order to enforce the restriction set forth above, the Company may impose stop-transfer instructions with respect to the Shares acquired under this Award Agreement until the end of the applicable stand-off period. The Company’s underwriters shall be beneficiaries of the agreement set forth in this Section.

If the underwriters release or waive any of the foregoing restrictions in connection with a transfer of shares of Common Stock, the underwriters shall notify the Company at least three business days before the effective date of any such release or waiver. Further, the Company will announce the impending release or waiver by press release through a major news service at least two business days before the effective date of the release or waiver. Any release or waiver granted by the underwriters shall only be effective two business days after the publication date of such press release. The provisions of this paragraph will not apply if (x) the release or waiver is effected solely to permit a transfer not for consideration and (y) the transferee has agreed in writing to be bound by the same terms of the lock-up provisions applicable in general to the extent, and for the duration, that such lock-up provisions remain in effect at the time of the transfer.

42.Plan Governs. This Award Agreement is subject to all terms and provisions of the Plan. If there is a conflict between one or more provisions of this Award Agreement and one or more provisions of the Plan, the provisions of the Plan will govern unless specifically amended or overridden in this Award Agreement. Capitalized terms used and not defined in this Award Agreement will have the meaning set forth in the Plan.

43.Administrator Authority. The Administrator will have the power to interpret the Plan and this Award Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret or revoke any such rules (including, but not limited to, the determination regarding whether any Shares subject to the Option have vested). All actions taken, and all interpretations and determinations made, by the Administrator in good faith will be final and binding upon Participant, the Company and all other interested persons. No member of the Administrator will be personally liable for any action, determination or interpretation made in good faith with respect to the Plan or this Award Agreement.

44.Electronic Delivery and Acceptance. The Company may, in its sole discretion, decide to deliver any documents related to Participant’s current or future participation in the Plan, this Option, the Shares subject to this Option, any other securities of the Company or any other Company-related documents, by electronic means. By accepting this Option, whether electronically or otherwise, Participant hereby (i) consents to receive such documents by electronic means, (ii) consents to the use of electronic signatures, and (iii) agrees to participate in the Plan and/or receive any such documents through an on-line or electronic system established and maintained by the Company or a third party designated by the Company, including

but not limited to the use of electronic signatures or click-through electronic acceptance of terms and conditions.

45.Translation; Language. If Participant has received this Award Agreement, including appendices, or any other document related to the Plan translated into a language other than English, and the meaning of the translated version is different than the English version, the English version will control. Participant acknowledges that Participant is sufficiently proficient in the English language, or has consulted with an advisor who is sufficiently proficient in English, so as to allow Participant to understand the terms and conditions of this Award Agreement.

46.Imposition of Other Requirements. The Company reserves the right to impose other requirements on Participant’s participation in the Plan, on the Option and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable in order to comply with any Applicable Laws or facilitate the administration of the Plan, and to require Participant to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing. Furthermore, Participant understands that the Applicable Laws of the country in which he or she is resident at the time of grant, vesting, and/or exercise of this Option or the holding or disposition of Shares (including any rules or regulations governing securities, foreign exchange, tax, labor or other matters) may restrict or prevent exercise of this Option or may subject Participant to additional procedural or regulatory requirements he or she is solely responsible for and will have to independently fulfill in relation to this Option or the Shares. Notwithstanding any provision herein, this Option and any Shares shall be subject to any special terms and conditions or disclosures as set forth in any addendum for Participant’s country (the “Country-Specific Addendum,” which forms part this Award Agreement). Participant also understands and agrees that if he works, resides, moves to, or otherwise is or becomes subject to Applicable Laws or company policies of another jurisdiction at any time, certain country-specific notices, disclaimers and/or terms and conditions may apply to him as from the date of grant, unless otherwise determined by the Company in its sole discretion.

47.Captions. Captions provided herein are for convenience only and are not to serve as a basis for interpretation or construction of this Award Agreement.

48.Agreement Severable. If any provision in this Award Agreement will be held invalid or unenforceable, such provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of this Award Agreement.

49.Modifications to the Agreement. This Award Agreement constitutes the entire understanding of the parties on the subjects covered. Participant expressly warrants that he or she is not accepting this Award Agreement in reliance on any promises, representations, or inducements other than those contained herein. Modifications to this Award Agreement or the Plan can be made only in an express written contract executed by a duly authorized officer of the Company. Notwithstanding anything to the contrary in the Plan or this Award Agreement, the Company reserves the right to revise this Award Agreement as it deems necessary or advisable, in its sole discretion and without the consent of Participant, to comply with Code Section 409A or to otherwise avoid imposition of any additional tax or income recognition under Code Section 409A in connection to this Option.

50.Amendment, Suspension or Termination of the Plan. By accepting this Award, Participant expressly warrants that he or she has received an Option under the Plan, and has received, read and understood a description of the Plan. Participant understands that the Plan is discretionary in nature and may be amended, suspended or terminated by the Company at any time.

51.Governing Law and Venue. This Award Agreement will be governed by the laws of the State of California, without giving effect to the conflict of law principles thereof. For purposes of litigating any

dispute that arises under this Award Agreement, the parties hereby submit to and consent to the jurisdiction of the State of California and agree that such litigation will be conducted in the courts of San Francisco County, California, or the federal courts for the United States for the Northern District of California, and no other courts.

***

Country-Specific Addendum

This Addendum includes additional country-specific notices, disclaimers, and/or terms and conditions that apply to individuals who are working or residing in the countries listed below, if any, and that may be material to Participant’s participation in the Plan. Such notices, disclaimers, and/or terms and conditions may also apply, as from the date of grant, if Participant moves to or otherwise is or becomes subject to the Applicable Laws or company policies of any country listed below. However, because foreign exchange regulations and other local laws are subject to frequent change, Participant is advised to seek advice from his or her own personal legal and tax advisor prior to accepting or exercising an Option or holding or selling Shares acquired under the Plan. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding Participant’s acceptance of the Option or participation in the Plan. Unless otherwise noted below, capitalized terms shall have the same meaning assigned to them under the Plan, the Notice of Stock Option Grant and the Award Agreement. This Addendum forms part of the Award Agreement and should be read in conjunction with the Award Agreement and the Plan.

Securities Law Notice: Unless otherwise noted, neither the Company nor the Shares are registered with any local stock exchange or under the control of any local securities regulator outside the United States. The Award Agreement (of which this Addendum is a part), the Notice of Stock Option Grant, the Plan, and any other communications or materials that Participant may receive regarding participation in the Plan do not constitute advertising or an offering of securities outside the United States, and the issuance of securities described in any Plan-related documents is not intended for public offering or circulation in Participant’s jurisdiction.

Terms applicable to all Participants residing or working outside the United States

Transferability. Notwithstanding anything to the contrary in the Plan, Participant’s Option is not transferable, except to Participant’s personal representative on your death and is exercisable during Participant’s life only by Participant or Participant’s personal representative after Participant’s death.

Italy

Plan Acknowledgement. In accepting the Option, Participant acknowledges that Participant has received a copy of the Plan and the Award Agreement and reviewed the Plan and the Award Agreement in their entirety and fully understand and accept all provisions of the latter. Participant acknowledges that Participant has read and specifically and expressly approve the following sections of the Award Agreement: Tax Obligations; No Guarantee of Continued Service or Grants; Nature of Grant; No Advice Regarding Grant; Data Privacy; Translation; Language; Governing Law and Venue; and the Italy country-specific terms and conditions of this Appendix.

Option Exercises. The Company may require Participant to exercise the Option using a cashless exercise method, pursuant to which shares of Common Stock subject to the exercised Option will be sold immediately upon exercise and the proceeds of sale, less the exercise price (which will be remitted to the Company) and broker’s fees or commissions, will be remitted to Participant’s Employer in cash. Participant will not be permitted to hold shares after exercise. If this method of exercise is imposed upon Participant by the Company, Participant’s employer will have the duty to withhold all taxes applicable under the relevant Italian law. If more shares are sold than necessary to realize funds to pay the exercise price and withholding taxes, the net difference shall be shown by Participant’s employer in the monthly payroll sheet and credited to Participant’s personal bank account. If the cashless exercise method is not managed through

an Italian intermediary who withholds the relevant Italian capital gain tax on behalf of Participant, Participant might be required to declare and pay capital gain tax on Participant’s own. It would be advisable to contact a local tax advisor. The Company reserves the right to provide additional methods of exercise.

Tax. Participant is required to declare and pay any income tax and capital gain tax which may be due. It would be advisable to contact a local tax advisor.

Data Privacy. Participant understands that the Employer and/or the Company (including any Parent or Subsidiary) may hold certain personal information about Participant, including, but not limited to, Participant’s name, home address and telephone number, date of birth, social security number (or any other social or national identification number), salary, nationality, job title, number of incentive units (the “Data”) for the purpose of implementing, administering and managing Participant’s participation in the Plan. Participant is aware that providing the Company with the Data is necessary for the performance of the Award Agreement and that Participant’s refusal to provide the Data would make it impossible for the Company to perform its contractual obligations and may affect Participant’s ability to participate in the Plan.

The Company will collect and process information relating to the Participant in accordance with the applicable laws and regulations, with specific reference to EU Regulation 679/2016 and Legislative Decree no. 196/2003 as combined by the Legislative Decree no. 101/2018 and subsequent amendments.

Participant understands that the Data will be held only as long as is required by law or as necessary to implement, administer and manage Participant’s participation in the Plan.

Foreign Asset/Account Reporting Information. If Participant is an Italian resident and, during any fiscal year, hold investments or financial assets outside of Italy (e.g., cash, shares of Common Stock) which may generate income taxable in Italy (or if Participant is the beneficial owner of such an investment or asset even if Participantdoes not directly hold the investment or asset), Participant is required to report such investments or assets on Participant’s annual tax return for such fiscal year (on the model “Dichiarazione dei Redditi Persone Fisiche” or UNICO Form, RW Schedule, or on a special form if Participantis not required to file a tax return). Participant is advised to seek Participant’s own advice from a local tax advisor.

Foreign Financial Assets Tax. The fair market value of any shares of Common Stock held outside of Italy is subject to a foreign assets tax. Financial assets include shares of Common Stock acquired under the Plan. The taxable amount will be the fair market value of the financial assets assessed at the end of the calendar year. Participant should consult with Participant’s personal tax advisor about the foreign financial assets tax.

EXHIBIT B

QUINCE THERAPEUTICS, INC.

2019 EQUITY INCENTIVE PLAN

EXERCISE NOTICE

Quince Therapeutics, Inc.

Attention:

52.Exercise of Option. Effective as of today, , , the undersigned (“Purchaser”) hereby elects to purchase shares (the “Shares”) of the Common Stock of Quince Therapeutics, Inc. (the “Company”) under and pursuant to the 2019 Equity Incentive Plan (the “Plan”) and the Stock Option Award Agreement dated , (the “Award Agreement”). The purchase price for the Shares will be USD $ , as required by the Award Agreement.

53.Delivery of Payment. Purchaser herewith delivers to the Company, or otherwise makes adequate arrangements satisfactory to the Company, the full purchase price of the Shares and any Tax-Related Items (as defined in the Agreement) to be paid in connection with the exercise of the Option.

54.Representations of Purchaser. Purchaser acknowledges that Purchaser has received, read and understood the Plan and the Award Agreement and agrees to abide by and be bound by their terms and conditions.

55.Rights as Stockholder. Until the issuance (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company) of the Shares, no right to vote or receive dividends or any other rights as a stockholder will exist with respect to the Shares subject to the Option, notwithstanding the exercise of the Option. The Shares so acquired will be issued to Purchaser as soon as practicable after exercise of the Option. No adjustment will be made for a dividend or other right for which the record date is prior to the date of issuance, except as provided in Section 14 of the Plan.

56.Tax Consultation. Purchaser understands that Purchaser may suffer adverse tax and/or social security consequences as a result of Purchaser’s purchase or disposition of the Shares. Purchaser represents that Purchaser has consulted with any tax consultants Purchaser deems advisable in connection with the purchase or disposition of the Shares and that Purchaser is not relying on the Company for any tax or social security advice.

57.Entire Agreement; Governing Law. The Plan and Award Agreement are incorporated herein by reference. This Exercise Notice, the Plan and the Award Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Purchaser with respect to the subject matter hereof, and may not be modified adversely to the Purchaser’s interest except by means of a writing signed by the Company and Purchaser. This agreement is governed by the internal substantive laws, but not the choice of law rules, of the State of California.

Submitted by:	Accepted by:
PURCHASER:	QUINCE THERAPEUTICS, INC.

Signature	By
Print Name:	Title:
	Date Received

QUINCE THERAPEUTICS, INC.

2019 EQUITY INCENTIVE PLAN

RESTRICTED STOCK UNIT AWARD AGREEMENT

Unless otherwise defined herein, the terms defined in the Quince Therapeutics, Inc. 2019 Equity Incentive Plan (the “Plan”) will have the same defined meanings in this Restricted Stock Unit Award Agreement (the “Award Agreement”).

I. NOTICE OF RESTRICTED STOCK UNIT GRANT

Participant Name:

You have been granted the right to receive an Award of Restricted Stock Units, subject to the terms and conditions of the Plan and this Award Agreement, as follows:

Grant Number

Date of Grant

Vesting Commencement Date

Number of Restricted Stock Units

Vesting Schedule:

Subject to Section 3 of the Award Agreement, the Restricted Stock Units will vest in accordance with the following schedule:

If Participant ceases to be a Service Provider for any or no reason before Participant vests in the Restricted Stock Unit, the Restricted Stock Unit and Participant’s right to acquire any Shares hereunder will terminate in accordance with Section 3 of the Award Agreement.

By Participant’s signature and the signature of the representative of Quince Therapeutics, Inc. (the “Company”) below, or by Participant otherwise accepting this Award, Participant and the Company agree that this Award of Restricted Stock Units is granted under and governed by the terms and conditions of the Plan and this Award Agreement, including the Terms and Conditions of Restricted Stock Unit Grant (including any country-specific addendum thereto), attached hereto as Exhibit A, all of which are made a part of this document. Participant has reviewed the Plan and this Award Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Award Agreement and fully understands all provisions of the Plan and Award Agreement. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator on any questions relating to the Plan and Award Agreement.

PARTICIPANT:	QUINCE THERAPEUTICS, INC.
Signature	By

Print Name Title

EXHIBIT A

TERMS AND CONDITIONS OF RESTRICTED STOCK UNIT GRANT

58.Grant. The Company hereby grants to the individual named in the Notice of Grant attached as Part I of this Award Agreement (the “Participant”) under the Plan an Award of Restricted Stock Units, subject to all of the terms and conditions in this Award Agreement and the Plan, which is incorporated herein by reference. Subject to Section 21 of the Plan, if there is a conflict between the terms and conditions of the Plan and the terms and conditions of this Award Agreement, the terms and conditions of the Plan will prevail.

59.Company’s Obligation to Pay. Each Restricted Stock Unit represents the right to receive a Share on the date it vests. Unless and until the Restricted Stock Units will have vested in the manner set forth in Section 3, Participant will have no right to receive Shares pursuant to any such Restricted Stock Units. Prior to actual settlement of any vested Restricted Stock Units, such Restricted Stock Units will represent an unsecured obligation of the Company. Any Restricted Stock Units that vest in accordance with Section 3 will be settled by delivery of whole Shares as set forth herein to Participant (or in the event of Participant’s death, to his or her estate), subject to Participant satisfying any Tax-Related Items as set forth in Section 7. Subject to the provisions of Section 4, such vested Restricted Stock Units will be settled by delivery of whole Shares as soon as practicable after vesting, but in each such case within the period ending no later than the date that is two and one-half (2½) months from the end of the Company’s tax year that includes the vesting date. In no event will Participant be permitted, directly or indirectly, to specify the taxable year in which Shares will be issued upon settlement of any Restricted Stock Units under this Award Agreement.

60.Vesting Schedule. The Restricted Stock Units awarded by this Award Agreement will vest in accordance with the vesting provisions set forth in the Notice of Grant. Restricted Stock Units scheduled to vest on a certain date or upon the occurrence of a certain condition will not vest in accordance with any of the provisions of this Award Agreement, unless Participant will have been continuously a Service Provider from the Date of Grant until the date such vesting occurs. Service Provider status for purposes of this Award will end on the day that Participant is no longer actively providing services as an Employee, Director, or Independent Contractor and will not be extended by any notice period or “garden leave” that may be required contractually or under Applicable Laws. Notwithstanding the foregoing, the Administrator (or any delegate) shall have the sole and absolute discretion to determine when Participant is no longer providing active service for purposes of Service Provider status and participation in the Plan.

61.Administrator Discretion. Notwithstanding anything in the Plan or this Award Agreement to the contrary, if the vesting of the balance, or some lesser portion of the balance, of the Restricted Stock Units is accelerated in connection with Participant’s termination as a Service Provider (provided that such termination is a “separation from service” within the meaning of Code Section 409A, as determined by the Company), other than due to death, and if (x) Participant is a “specified employee” within the meaning of Code Section 409A at the time of such termination as a Service Provider and (y) the payment of such accelerated Restricted Stock Units will result in the imposition of additional tax under Code Section 409A if paid to Participant on or within the six (6) month period following Participant’s termination as a Service Provider, then the payment of such accelerated Restricted Stock Units will not be made until the date six (6) months and one (1) day following the date of Participant’s termination as a Service Provider, unless the Participant dies following his or her termination as a Service Provider, in which case, the Restricted Stock Units will be settled in Shares to the Participant’s estate as soon as practicable following his or her death. It is the intent of this Award Agreement that it and all payments and benefits hereunder be exempt from, or comply with, the requirements of Code Section 409A so that none of the Restricted Stock Units provided under this Award Agreement or Shares issuable thereunder will be subject to the additional tax imposed under Code Section 409A, and any ambiguities herein will be interpreted to be so exempt or so comply.

Each payment payable under this Award Agreement is intended to constitute a separate payment for purposes of U.S. Treasury Regulation Section 1.409A-2(b)(2). For purposes of this Award Agreement, “Code Section 409A” means Section 409A of the Code, and any final U.S. Treasury Regulations and U.S. Internal Revenue Service guidance thereunder, as each may be amended from time to time.

62.Forfeiture upon Termination of Status as a Service Provider. Notwithstanding any contrary provision of this Award Agreement, any Restricted Stock Units that have not vested will be forfeited and will return to the Plan on the date that is thirty (30) days following the termination of Participant’s status as a Service Provider.

63.Death of Participant. Any distribution or delivery to be made to Participant under this Award Agreement will, if Participant is then deceased, be made to Participant’s designated beneficiary, if so allowed by the Administrator in its sole discretion, or if no beneficiary survives Participant, the administrator or executor of Participant’s estate. Any such transferee must furnish the Company with (a) written notice of his or her status as transferee, and (b) evidence satisfactory to the Company to establish the validity of the transfer and compliance with any Applicable Laws or regulations pertaining to said transfer.

64.Withholding of Taxes. Regardless of any action the Company or Participant’s employer (the “Employer”) takes with respect to any or all applicable national, local, or other tax or social contribution, withholding, required deductions, or other payments, if any, that arise upon the grant or vesting of the Restricted Stock Units or the holding or subsequent sale of Shares, and the receipt of dividends, if any, or otherwise in connection with the Restricted Stock Units or the Shares (“Tax-Related Items”), Participant acknowledges and agrees that the ultimate liability for all Tax-Related Items legally due by Participant is and remains Participant’s responsibility and may exceed any amount actually withheld by the Company or the Employer. Participant further acknowledges and agrees that Participant is solely responsible for filing all relevant documentation that may be required in relation to the Restricted Stock Units or any Tax-Related Items (other than filings or documentation that is the specific obligation of the Company or a Parent, Subsidiary, or Employer pursuant to Applicable Law) such as but not limited to personal income tax returns or reporting statements in relation to the grant, vesting or settlement of the Restricted Stock Units, the holding of Shares or any bank or brokerage account, the subsequent sale of Shares, and the receipt of any dividends. Participant further acknowledges that the Company and the Employer (a) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Restricted Stock Units, including the grant or vesting of the Restricted Stock Units, the subsequent sale of Shares acquired under the Plan, and the receipt of dividends, if any; and (b) does not commit to and is under no obligation to structure the terms of the Restricted Stock Units or any aspect of the Restricted Stock Units to reduce or eliminate Participant’s liability for Tax-Related Items, or achieve any particular tax result. Participant also understands that Applicable Laws may require varying Share or Restricted Stock Unit valuation methods for purposes of calculating Tax-Related Items, and the Company assumes no responsibility or liability in relation to any such valuation or for any calculation or reporting of income or Tax-Related Items that may be required of Participant under Applicable Laws. Further, if Participant has become subject to tax in more than one jurisdiction between the date of grant and the date of any relevant taxable event, Participant acknowledges that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction. Notwithstanding any contrary provision of this Award Agreement, no certificate representing the Shares will be issued to Participant, unless and until satisfactory arrangements (as determined by the Administrator) will have been made by Participant with respect to the payment of any Tax-Related Items which the Company determines must be withheld with respect to such Shares.

As a condition to the grant and vesting of the Restricted Stock Units and as set forth in Section 15 of the Plan, Participant hereby agrees to make adequate provision for the satisfaction of (and will indemnify

the Company and any Parent or Subsidiary for) any Tax-Related Items. The Tax-Related Items shall be satisfied by the Company’s withholding all or a portion of any Shares that otherwise would be issued to Participant upon payment of the vested Restricted Stock Units; provided that amounts withheld shall not exceed the amount necessary to satisfy the Company’s minimum tax withholding obligations. Such withheld Shares shall be valued based on the Fair Market Value as of the date the withholding obligations are satisfied. Furthermore, Participant agrees to pay the Company or any Parent, Subsidiary, or Employer any Tax-Related Items that cannot be satisfied by the foregoing methods.

65.Rights as Stockholder. Neither Participant nor any person claiming under or through Participant will have any of the rights or privileges of a stockholder of the Company in respect of any Shares deliverable hereunder unless and until such Shares will have been issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). After such issuance, Participant will have all the rights of a stockholder of the Company with respect to voting such Shares and receipt of dividends and distributions on such Shares, but prior to such issuance, Participant will not have any rights to dividends and/or distributions on such Shares.

66.No Guarantee of Continued Service or Grants. PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE VESTING OF THE RESTRICTED STOCK UNITS PURSUANT TO THE VESTING SCHEDULE HEREOF SHALL OCCUR ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE EMPLOYER OR CONTRACTING ENTITY (AS APPLICABLE) AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS AWARD OF RESTRICTED STOCK UNITS OR ACQUIRING SHARES HEREUNDER. PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT THIS AWARD AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND WILL NOT INTERFERE IN ANY WAY WITH PARTICIPANT’S RIGHT OR THE RIGHT OF THE EMPLOYER OR THE COMPANY (OR ANY PARENT OR SUBSIDIARY) TO TERMINATE PARTICIPANT’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE, SUBJECT TO APPLICABLE LAWS.

Participant also acknowledges and agrees that: (a) the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time; (b) the grant of Restricted Stock Units is voluntary and occasional and does not create any contractual or other right to receive future grants of Restricted Stock Units, or benefits in lieu of Restricted Stock Units even if Restricted Stock Units have been granted repeatedly in the past; (c) all decisions with respect to future awards of Restricted Stock Units, if any, will be at the sole discretion of the Company; (d) Participant’s participation in the Plan is voluntary; (e) the Restricted Stock Units and the Shares subject to the Restricted Stock Units are extraordinary items that do not constitute regular compensation for services rendered to the Company or the Employer, and that are outside the scope of Participant’s employment contract, if any; (f) the Restricted Stock Units and the Shares subject to the Restricted Stock Units are not intended to replace any pension rights or compensation; (g) the Restricted Stock Units and the Shares subject to the Restricted Stock Units are not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, or end of service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments and in no event should be considered as compensation for, or relating in any way to, past services for the Company or the Employer, subject to Applicable Laws.

67.Address for Notices. Any notice to be given to the Company under the terms of this Award Agreement will be addressed to the Company, in care of its Secretary at Quince Therapeutics, Inc., 611

Gateway Blvd., Suite 273, South San Francisco, California 94080, or at such other address as the Company may hereafter designate in writing.

68.Grant is Not Transferable. Except to the limited extent provided in Section 6, this grant and the rights and privileges conferred hereby may not be transferred, assigned, pledged or hypothecated in any way (whether by operation of Applicable Laws or otherwise) and may not be subject to sale under execution, attachment or similar process. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of this grant, or any right or privilege conferred hereby, or upon any attempted sale under any execution, attachment or similar process, this grant and the rights and privileges conferred hereby immediately will become null and void.

69.Binding Agreement. Subject to the limitation on the transferability of this grant contained herein, this Award Agreement will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.

70.Additional Conditions to Issuance of Stock and Imposition of Other Requirements. If at any time the Company will determine, in its discretion, that the listing, registration, qualification or compliance of the Shares upon or with any securities exchange or under any Applicable Laws, the tax code and related regulations or the consent or approval of any governmental regulatory authority is necessary or desirable as a condition to the issuance of Shares to Participant (or his or her estate) hereunder, such issuance will not occur unless and until such listing, registration, qualification, compliance, consent or approval will have been completed, effected or obtained free of any conditions not acceptable to the Company. Where the Company determines that the delivery of any Shares will violate any state, federal or foreign securities or exchange laws or other Applicable Laws, the Company will defer delivery until the earliest date at which the Company reasonably anticipates that the delivery of Shares will no longer cause such violation. The Company will make all reasonable efforts to meet the requirements of any Applicable Laws or securities exchange and to obtain any such consent or approval of any such governmental authority or securities exchange. The Company shall not be obligated to issue any Shares pursuant to the Restricted Stock Units at any time if the issuance of Shares violates or is not in compliance with any Applicable Laws.

Furthermore, the Company reserves the right to impose other requirements on Participant’s participation in the Plan, on the Restricted Stock Units and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable in order to comply with any Applicable Laws or facilitate the administration of the Plan, and to require Participant to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing. Furthermore, Participant understands that the Applicable Laws of the country in which he or she is resident at the time of grant or vesting of the Restricted Stock Units or the holding or disposition of Shares (including any rules or regulations governing securities, foreign exchange, tax, labor or other matters) may restrict or prevent the issuance of Shares or may subject Participant to additional procedural or regulatory requirements he or she is solely responsible for and will have to independently fulfill in relation to the Restricted Stock Units or the Shares. Notwithstanding any provision herein, the Restricted Stock Units and any Shares shall be subject to any special terms and conditions or disclosures as set forth in any addendum for Participant’s country (the “Country-Specific Addendum,” which forms part this Award Agreement). Participant also understands and agrees that if he works, resides, moves to, or otherwise is or becomes subject to Applicable Laws or company policies of another jurisdiction at any time, certain country-specific notices, disclaimers and/or terms and conditions may apply to him as from the date of grant, unless otherwise determined by the Company in its sole discretion.

71.Lock-Up Agreement. In connection with the initial public offering of the Company’s securities, Participant hereby agrees not to offer, pledge, sell, contract to sell, make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any securities of the Company however and whenever

acquired (other than those included in the registration) without the prior written consent of the Company and the managing underwriters for such offering for such period of time (not to exceed 180 days) from the effective date of such registration as may be requested by the Company or such managing underwriters and to execute an agreement reflecting the foregoing as may be requested by the underwriters at the time of the Company’s initial public offering. In addition, upon request of the Company or the underwriters managing a public offering of the Company’s securities (other than the initial public offering), Participant hereby agrees to be bound by similar restrictions, and to sign a similar agreement, in connection with no more than one additional registration statement filed within 12 months after the closing date of the initial public offering, provided that the duration of the lock-up period with respect to such additional registration shall not exceed 90 days from the effective date of such additional registration statement. Notwithstanding the foregoing, if during the last 17 days of the restricted period, the Company issues an earnings release or material news or a material event relating to the Company occurs, or prior to the expiration of the restricted period the Company announces that it will release earnings results during the 16-day period beginning on the last day of the restricted period, then, upon the request of the managing underwriter, to the extent required by any FINRA rules, the restrictions imposed by this subsection shall continue to apply until the end of the third trading day following the expiration of the 15-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event. In no event will the restricted period extend beyond 216 days after the effective date of the registration statement. In order to enforce the restriction set forth above, the Company may impose stop-transfer instructions with respect to the Shares acquired under this Award Agreement until the end of the applicable stand-off period. The Company’s underwriters shall be beneficiaries of the agreement set forth in this Section.

If the underwriters release or waive any of the foregoing restrictions in connection with a transfer of shares of Common Stock, the underwriters shall notify the Company at least three business days before the effective date of any such release or waiver. Further, the Company will announce the impending release or waiver by press release through a major news service at least two business days before the effective date of the release or waiver. Any release or waiver granted by the underwriters shall only be effective two business days after the publication date of such press release. The provisions of this paragraph will not apply if (x) the release or waiver is effected solely to permit a transfer not for consideration and (y) the transferee has agreed in writing to be bound by the same terms of the lock-up provisions applicable in general to the extent, and for the duration, that such lock-up provisions remain in effect at the time of the transfer.

72.Plan Governs. This Award Agreement is subject to all terms and provisions of the Plan. If there is a conflict between one or more provisions of this Award Agreement and one or more provisions of the Plan, the provisions of the Plan will govern. Capitalized terms used and not defined in this Award Agreement will have the meaning set forth in the Plan.

73.Administrator Authority. The Administrator will have the power to interpret the Plan and this Award Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret or revoke any such rules (including, but not limited to, the determination regarding whether any Restricted Stock Units have vested). All actions taken, and all interpretations and determinations made, by the Administrator in good faith will be final and binding upon Participant, the Company and all other interested persons. No member of the Administrator will be personally liable for any action, determination or interpretation made in good faith with respect to the Plan or this Award Agreement.

74.Electronic Delivery and Acceptance; Translation. The Company may, in its sole discretion, decide to deliver any documents related to Participant’s current or future participation in the Plan, this Award, the Shares subject to this Award, any other securities of the Company or any other Company-related documents, by electronic means. By accepting this Award, whether electronically or otherwise, Participant

hereby (i) consents to receive such documents by electronic means, (ii) consents to the use of electronic signatures, and (iii) agrees to participate in the Plan and/or receive any such documents through an on-line or electronic system established and maintained by the Company or a third party designated by the Company, including but not limited to the use of electronic signatures or click-through electronic acceptance of terms and conditions.

75.Translation. If Participant has received this Award Agreement, including appendices, or any other document related to the Plan translated into a language other than English, and the meaning of the translated version is different than the English version, the English version will control.

76.Captions. Captions provided herein are for convenience only and are not to serve as a basis for interpretation or construction of this Award Agreement.

77.Agreement Severable. If any provision in this Award Agreement will be held invalid or unenforceable, such provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of this Award Agreement.

78.Modifications to the Award Agreement. This Award Agreement constitutes the entire understanding of the parties on the subjects covered. Participant expressly warrants that he or she is not accepting this Award Agreement in reliance on any promises, representations, or inducements other than those contained herein. Modifications to this Award Agreement or the Plan can be made only in an express written contract executed by a duly authorized officer of the Company. Notwithstanding anything to the contrary in the Plan or this Award Agreement, the Company reserves the right to revise this Award Agreement as it deems necessary or advisable, in its sole discretion and without the consent of Participant, to comply with Code Section 409A or to otherwise avoid imposition of any additional tax or income recognition under Code Section 409A in connection to this Award of Restricted Stock Units.

79.Data Privacy. Participant hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of Participant’s Personal Data (as described below) by and among, as applicable, the Company, any Parent, Subsidiary, or affiliate, or third parties as may be selected by the Company for the exclusive purpose of implementing, administering and managing Participant’s participation in the Plan. Participant understands that refusal or withdrawal of consent will affect Participant’s ability to participate in the Plan; without providing consent, Participant will not be able to participate in the Plan or realize benefits (if any) from the Restricted Stock Unit.

Participant understands that the Company and any Parent, Subsidiary, affiliate, or designated third parties may hold personal information about Participant, including, but not limited to, Participant’s name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company or any Parent, Subsidiary, or affiliate, details of all Restricted Stock Units or any other entitlement to Shares awarded, canceled, exercised, vested, unvested or outstanding in Participant’s favor (“Personal Data”). Participant understands that Personal Data may be transferred to any Parent, Subsidiary, affiliate, or third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in the United States, Participant’s country (if different than the United States), or elsewhere, and that the recipient’s country may have different data privacy laws and protections than Participant’s country. In particular, the Company may transfer Personal Data to the broker or stock plan administrator assisting with the Plan, to its legal counsel and tax/accounting advisor, and to the affiliate or entity that is Participant’s employer and its payroll provider.

Participant should also refer to any data privacy policy implemented by the Company (which will be available to Participant separately and may be updated from time to time) for more information regarding the collection, use, storage, and transfer of Participant’s Personal Data.

80.Foreign Exchange Fluctuations and Restrictions. Participant understands and agrees that the future value of the underlying Shares is unknown and cannot be predicted with certainty and may decrease. Participant also understands that neither the Company, nor any affiliate is responsible for any foreign exchange fluctuation between local currency and the United States Dollar or the selection by the Company or any affiliate in its sole discretion of an applicable foreign currency exchange rate that may affect the value of the Restricted Stock Units or Shares received (or the calculation of income or Tax-Related Items thereunder). Participant understands and agrees that any cross-border remittance made to transfer proceeds received upon the sale of Shares must be made through a locally authorized financial institution or registered foreign exchange agency and may require the Participant to provide such entity with certain information regarding the transaction.

81.Amendment, Suspension or Termination of the Plan. By accepting this Award, Participant expressly warrants that he or she has received an Award of Restricted Stock Units under the Plan, and has received, read and understood a description of the Plan. Participant understands that the Plan is discretionary in nature and may be amended, suspended or terminated by the Company at any time.

82.Governing Law and Venue. This Award Agreement will be governed by the laws of the State of California, without giving effect to the conflict of law principles thereof. For purposes of litigating any dispute that arises under this Award of Restricted Stock Units or this Award Agreement, the parties hereby submit to and consent to the jurisdiction of the State of California, and agree that such litigation will be conducted in the courts of San Francisco County, California, or the federal courts for the United States for the Northern District of California, and no other courts.

***

Country-Specific Addendum

This Addendum includes additional country-specific notices, disclaimers, and/or terms and conditions that apply to individuals who are working or residing in the countries listed below, if any, and that may be material to Participant’s participation in the Plan. Such notices, disclaimers, and/or terms and conditions may also apply, as from the date of grant, if Participant moves to or otherwise is or becomes subject to the Applicable Laws or company policies of any country listed below. However, because foreign exchange regulations and other local laws are subject to frequent change, Participant is advised to seek advice from his or her own personal legal and tax advisor prior to accepting the Restricted Stock Units or holding or selling Shares acquired under the Plan. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding Participant’s acceptance of the Restricted Stock Units or participation in the Plan. Unless otherwise noted below, capitalized terms shall have the same meaning assigned to them under the Plan, the Notice of Restricted Stock Unit Grant and the Award Agreement. This Addendum forms part of the Award Agreement and should be read in conjunction with the Award Agreement and the Plan.

Securities Law Notice: Unless otherwise noted, neither the Company nor the Shares are registered with any local stock exchange or under the control of any local securities regulator outside the United States. The Award Agreement (of which this Addendum is a part), the Notice of Restricted Stock Unit Grant, the Plan, and any other communications or materials that you may receive regarding participation in the Plan do not constitute advertising or an offering of securities outside the United States, and the issuance of securities described in any Plan-related documents is not intended for public offering or circulation in your jurisdiction.

QUINCE THERAPEUTICS, INC.

2019 EQUITY INCENTIVE PLAN

RESTRICTED STOCK AWARD AGREEMENT

Unless otherwise defined herein, the terms defined in the Quince Therapeutics, Inc. 2019 Equity Incentive Plan (the “Plan”) will have the same defined meanings in this Restricted Stock Award Agreement (the “Award Agreement”).

NOTICE OF RESTRICTED STOCK GRANT

Participant Name:

You have been granted the right to receive an Award of Restricted Stock, subject to the terms and conditions of the Plan and this Award Agreement, as follows:

Grant Number

Date of Grant

Vesting Commencement Date

Total Number of Shares Granted

Vesting Schedule:

Subject to Section 3 of the Award Agreement, the Restricted Stock will vest and the Company’s right to reacquire the Restricted Stock will lapse in accordance with the following schedule:

By Participant’s signature and the signature of the representative of Quince Therapeutics, Inc. (the “Company”) below, or by Participant otherwise accepting this Award, Participant and the Company agree that this Award of Restricted Stock is granted under and governed by the terms and conditions of the Plan and this Award Agreement, including the Terms and Conditions of Restricted Stock Grant (including any country-specific addendum thereto), attached hereto as Exhibit A, all of which are made a part of this document. Participant has reviewed the Plan and this Award Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Award Agreement and fully understands all provisions of the Plan and Award Agreement. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator on any questions relating to the Plan and Award Agreement.

PARTICIPANT:	QUINCE THERAPEUTICS, INC.
Signature	By
Print Name	Title

EXHIBIT A

TERMS AND CONDITIONS OF RESTRICTED STOCK GRANT

83.Grant of Restricted Stock. The Company hereby grants to the individual named in the Notice of Grant attached as Part I of this Award Agreement (the “Participant”) under the Plan for past services as an Employee, Director, or Independent Contractor and as a separate incentive in connection with his or her services and not in lieu of any salary or other compensation for his or her services, an Award of Shares of Restricted Stock, subject to all of the terms and conditions in this Award Agreement and the Plan, which is incorporated herein by reference. Subject to Section 21 of the Plan, if there is a conflict between the terms and conditions of the Plan and the terms and conditions of this Award Agreement, the terms and conditions of the Plan will prevail.

84.Escrow of Shares.

(a)All Shares of Restricted Stock will, upon execution of this Award Agreement, be delivered and deposited with an escrow holder designated by the Company (the “Escrow Holder”). The Shares of Restricted Stock will be held by the Escrow Holder until the Shares vest or following the date Participant ceases to be a Service Provider.

(b)The Escrow Holder will not be liable for any act it may do or omit to do with respect to holding the Shares of Restricted Stock in escrow while acting in good faith and in the exercise of its judgment.

(c)Following Participant’s termination as a Service Provider for any reason, the Escrow Holder, upon receipt of written notice of such termination, will take all steps necessary to accomplish the transfer of the unvested Shares of Restricted Stock to the Company. Participant hereby appoints the Escrow Holder with full power of substitution, as Participant’s true and lawful attorney in fact with irrevocable power and authority in the name and on behalf of Participant to take any action and execute all documents and instruments, including, without limitation, stock powers which may be necessary to transfer the certificate or certificates evidencing such unvested Shares of Restricted Stock to the Company upon such termination.

(d)The Escrow Holder will take all steps necessary to accomplish the transfer of Shares of Restricted Stock to Participant after they vest following Participant’s request that the Escrow Holder do so.

(e)Subject to the terms hereof, Participant will have all the rights of a stockholder with respect to the Shares while they are held in escrow, including without limitation, the right to vote the Shares and to receive any cash dividends declared thereon.

(f)In the event of any dividend or other distribution (whether in the form of cash, Shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Shares or other securities of the Company, or other change in the corporate structure of the Company affecting the Shares, the Shares of Restricted Stock will be increased, reduced or otherwise changed, and by virtue of any such change Participant will in his or her capacity as owner of unvested Shares of Restricted Stock be entitled to new or additional or different shares of stock, cash or securities (other than rights or warrants to purchase securities); such new or additional or different shares, cash or securities will thereupon be considered to be unvested Shares of Restricted Stock and will be subject to all of the conditions and restrictions which were applicable to the unvested Shares of Restricted Stock pursuant to this Award Agreement. If Participant receives rights or warrants with respect to any unvested Shares of Restricted Stock, such rights or warrants

may be held or exercised by Participant, provided that until such exercise any such rights or warrants and after such exercise any shares or other securities acquired by the exercise of such rights or warrants will be considered to be unvested Shares of Restricted Stock and will be subject to all of the conditions and restrictions which were applicable to the unvested Shares of Restricted Stock pursuant to this Award Agreement.

(g)The Company may instruct the transfer agent for its Common Stock to place a legend on the certificates representing the Restricted Stock or otherwise note its records as to the restrictions on transfer set forth in this Award Agreement.

85.Vesting Schedule. The Shares of Restricted Stock awarded by this Award Agreement will vest in accordance with the vesting provisions set forth in the Notice of Grant. Shares of Restricted Stock scheduled to vest on a certain date or upon the occurrence of a certain condition will not vest in accordance with any of the provisions of this Award Agreement, unless Participant will have been continuously a Service Provider from the Date of Grant until the date such vesting occurs. Service Provider status for purposes of this Award will end on the day that Participant is no longer actively providing services as an Employee, Director, or Independent Contractor and will not be extended by any notice period or “garden leave” that may be required contractually or under Applicable Laws. Notwithstanding the foregoing, the Administrator (or any delegate) shall have the sole and absolute discretion to determine when Participant is no longer providing active service for purposes of Service Provider status and participation in the Plan.

86.Forfeiture upon Termination of Status as a Service Provider. Notwithstanding any contrary provision of this Award Agreement, the balance of the Shares of Restricted Stock that have not vested will be forfeited and automatically transferred to and reacquired by the Company at no cost to the Company upon the date that is thirty (30) days following Participant’s termination and Participant will have no further rights thereunder. Participant will not be entitled to a refund of the price paid for the Shares of Restricted Stock, if any, returned to the Company pursuant to this Section 4. Participant hereby appoints the Escrow Agent with full power of substitution, as Participant’s true and lawful attorney-in-fact with irrevocable power and authority in the name and on behalf of Participant to take any action and execute all documents and instruments, including, without limitation, stock powers which may be necessary to transfer the certificate or certificates evidencing such unvested Shares to the Company upon such termination of service.

87.Death of Participant. Any distribution or delivery to be made to Participant under this Award Agreement will, if Participant is then deceased, be made to Participant’s designated beneficiary, if so allowed by the Administrator in its sole discretion, or if no beneficiary survives Participant, the administrator or executor of Participant’s estate. Any such transferee must furnish the Company with (a) written notice of his or her status as transferee, and (b) evidence satisfactory to the Company to establish the validity of the transfer and compliance with any Applicable Laws or regulations pertaining to said transfer.

88.Withholding of Taxes. Regardless of any action the Company or Participant’s employer (the “Employer”) takes with respect to any or all applicable national, local, or other tax or social contribution, withholding, required deductions, or other payments, if any, that arise upon the grant or vesting of the Restricted Stock or the holding or subsequent sale of Shares, and the receipt of dividends, if any, or otherwise in connection with the Shares (“Tax-Related Items”), Participant acknowledges and agrees that the ultimate liability for all Tax-Related Items legally due by Participant is and remains Participant’s responsibility and may exceed any amount actually withheld by the Company or the Employer. Participant further acknowledges and agrees that Participant is solely responsible for filing all relevant documentation that may be required in relation to the Shares or any Tax-Related Items (other than filings or documentation that is the specific obligation of the Company or a Parent, Subsidiary, or Employer pursuant to Applicable Law) such as but not limited to personal income tax returns or reporting statements in relation to the grant

or vesting of Shares, the holding of Shares or any bank or brokerage account, the subsequent sale of Shares, and the receipt of any dividends. Participant further acknowledges that the Company and the Employer (a) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Restricted Stock, including the grant or vesting of the Shares, the subsequent sale of Shares acquired under the Plan, and the receipt of dividends, if any; and (b) does not commit to and is under no obligation to structure the terms of the Restricted Stock or any aspect of the Restricted Stock to reduce or eliminate Participant’s liability for Tax-Related Items, or achieve any particular tax result. Participant also understands that Applicable Laws may require varying Share valuation methods for purposes of calculating Tax-Related Items, and the Company assumes no responsibility or liability in relation to any such valuation or for any calculation or reporting of income or Tax-Related Items that may be required of Participant under Applicable Laws. Further, if Participant has become subject to tax in more than one jurisdiction between the date of grant and the date of any relevant taxable event, Participant acknowledges that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction. Notwithstanding any contrary provision of this Award Agreement, no certificate representing the Shares of Restricted Stock may be released from the escrow established pursuant to Section 2, unless and until satisfactory arrangements (as determined by the Administrator) will have been made by Participant with respect to the payment of any Tax-Related Items which the Company determines must be withheld with respect to such Shares.

As a condition to the grant and vesting of the Shares of Restricted Stock and as set forth in Section 15 of the Plan, Participant hereby agrees to make adequate provision for the satisfaction of (and will indemnify the Company and any Parent or Subsidiary for) any Tax-Related Items. The Tax-Related Items shall be satisfied by the Company’s withholding all or a portion of any Shares of Restricted Stock that vest; provided that amounts withheld shall not exceed the amount necessary to satisfy the Company’s minimum tax withholding obligations. Such withheld Shares shall be valued based on the Fair Market Value as of the date the withholding obligations are satisfied. Furthermore, Participant agrees to pay the Company or any Parent, Subsidiary, or Employer any Tax-Related Items that cannot be satisfied by the foregoing methods.

89.Rights as Stockholder. Neither Participant nor any person claiming under or through Participant will have any of the rights or privileges of a stockholder of the Company in respect of any Shares deliverable hereunder unless and until such Shares will have been issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). Except as provided in Section 2, after such issuance, Participant will have all the rights of a stockholder of the Company with respect to voting such Shares and receipt of dividends and distributions on such Shares, but prior to such issuance, Participant will not have any rights to dividends and/or distributions on such Shares.

90.No Guarantee of Continued Service or Grants. PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE VESTING OF THE SHARES OF RESTRICTED STOCK PURSUANT TO THE VESTING SCHEDULE HEREOF SHALL OCCUR ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE EMPLOYER OR CONTRACTING ENTITY (AS APPLICABLE) AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS RESTRICTED STOCK OR ACQUIRING SHARES HEREUNDER. PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT THIS AWARD AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND WILL NOT INTERFERE IN ANY WAY WITH PARTICIPANT’S RIGHT OR THE RIGHT OF THE EMPLOYER OR THE COMPANY (OR ANY PARENT OR SUBSIDIARY) TO TERMINATE PARTICIPANT’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE, SUBJECT TO APPLICABLE LAWS.

Participant also acknowledges and agrees that: (a) the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time; (b) the grant of Restricted Stock is voluntary and occasional and does not create any contractual or other right to receive future grants of Restricted Stock, or benefits in lieu of Restricted Stock even if Restricted Stock has been granted repeatedly in the past; (c) all decisions with respect to future awards of Restricted Stock, if any, will be at the sole discretion of the Company; (d) Participant’s participation in the Plan is voluntary; (e) the Restricted Stock and the Shares subject to the Restricted Stock are extraordinary items that do not constitute regular compensation for services rendered to the Company or the Employer, and that are outside the scope of Participant’s employment contract, if any; (f) the Restricted Stock and the Shares subject to the Restricted Stock are not intended to replace any pension rights or compensation; (g) the Restricted Stock and the Shares subject to the Restricted Stock are not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, or end of service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments and in no event should be considered as compensation for, or relating in any way to, past services for the Company or the Employer, subject to Applicable Laws.

91.Address for Notices. Any notice to be given to the Company under the terms of this Award Agreement will be addressed to the Company, in care of its Secretary at Quince Therapeutics, Inc., 611 Gateway Blvd., Suite 273, South San Francisco, California 94080, or at such other address as the Company may hereafter designate in writing.

92.Grant is Not Transferable. Except to the limited extent provided in Section 5, the unvested Shares subject to this grant and the rights and privileges conferred hereby may not be transferred, assigned, pledged or hypothecated in any way (whether by operation of Applicable Laws or otherwise) and may not be subject to sale under execution, attachment or similar process. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of any unvested Shares of Restricted Stock, or any right or privilege conferred hereby, or upon any attempted sale under any execution, attachment or similar process, this grant and the rights and privileges conferred hereby immediately will become null and void.

93.Binding Agreement. Subject to the limitation on the transferability of this grant contained herein, this Award Agreement will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.

94.Additional Conditions; Release from Escrow. The Company will not be required to issue any Shares pursuant to this Award Agreement, or release such Shares from the escrow established pursuant to Section 2, prior to fulfillment of all the following conditions: (a) the admission of such Shares to listing on all stock exchanges on which such class of stock is then listed; (b) the completion of any registration or other qualification of such Shares under any Applicable Laws or under the rulings or regulations of the Securities and Exchange Commission or any other governmental regulatory body or the securities exchange on which the Shares are then registered, which the Administrator will, in its absolute discretion, deem necessary or advisable; (c) the obtaining of any approval or other clearance from any state or federal governmental agency, which the Administrator will, in its absolute discretion, determine to be necessary or advisable; and (d) the lapse of such reasonable period of time following the date of grant of the Restricted Stock as the Administrator may establish from time to time for reasons of administrative convenience.

Furthermore, the Company reserves the right to impose other requirements on Participant’s participation in the Plan, on the Restricted Stock and on any Shares acquired under the Plan to the extent the Company determines it is necessary or advisable in order to comply with any Applicable Laws or facilitate the administration of the Plan, and to require Participant to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing. Furthermore, Participant understands that

the Applicable Laws of the country in which he or she is resident at the time of grant or vesting of the Restricted Stock or the holding or disposition of Shares (including any rules or regulations governing securities, foreign exchange, tax, labor or other matters) may restrict or prevent the issuance of Shares or may subject Participant to additional procedural or regulatory requirements he or she is solely responsible for and will have to independently fulfill in relation to the Restricted Stock or the Shares. Notwithstanding any provision herein, the Restricted Stock and any Shares shall be subject to any special terms and conditions or disclosures as set forth in any addendum for Participant’s country (the “Country-Specific Addendum,” which forms part this Award Agreement). Participant also understands and agrees that if he works, resides, moves to, or otherwise is or becomes subject to Applicable Laws or company policies of another jurisdiction at any time, certain country-specific notices, disclaimers and/or terms and conditions may apply to him as from the date of grant, unless otherwise determined by the Company in its sole discretion.

95.Lock-Up Agreement. In connection with the initial public offering of the Company’s securities, Participant hereby agrees not to offer, pledge, sell, contract to sell, make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any securities of the Company however and whenever acquired (other than those included in the registration) without the prior written consent of the Company and the managing underwriters for such offering for such period of time (not to exceed 180 days) from the effective date of such registration as may be requested by the Company or such managing underwriters and to execute an agreement reflecting the foregoing as may be requested by the underwriters at the time of the Company’s initial public offering. In addition, upon request of the Company or the underwriters managing a public offering of the Company’s securities (other than the initial public offering), Participant hereby agrees to be bound by similar restrictions, and to sign a similar agreement, in connection with no more than one additional registration statement filed within 12 months after the closing date of the initial public offering, provided that the duration of the lock-up period with respect to such additional registration shall not exceed 90 days from the effective date of such additional registration statement. Notwithstanding the foregoing, if during the last 17 days of the restricted period, the Company issues an earnings release or material news or a material event relating to the Company occurs, or prior to the expiration of the restricted period the Company announces that it will release earnings results during the 16-day period beginning on the last day of the restricted period, then, upon the request of the managing underwriter, to the extent required by any FINRA rules, the restrictions imposed by this subsection shall continue to apply until the end of the third trading day following the expiration of the 15-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event. In no event will the restricted period extend beyond 216 days after the effective date of the registration statement. In order to enforce the restriction set forth above, the Company may impose stop-transfer instructions with respect to the Shares acquired under this Award Agreement until the end of the applicable stand-off period. The Company’s underwriters shall be beneficiaries of the agreement set forth in this Section.

If the underwriters release or waive any of the foregoing restrictions in connection with a transfer of shares of Common Stock, the underwriters shall notify the Company at least three business days before the effective date of any such release or waiver. Further, the Company will announce the impending release or waiver by press release through a major news service at least two business days before the effective date of the release or waiver. Any release or waiver granted by the underwriters shall only be effective two business days after the publication date of such press release. The provisions of this paragraph will not apply if (x) the release or waiver is effected solely to permit a transfer not for consideration and (y) the transferee has agreed in writing to be bound by the same terms of the lock-up provisions applicable in general to the extent, and for the duration, that such lock-up provisions remain in effect at the time of the transfer.

96.Plan Governs. This Award Agreement is subject to all terms and provisions of the Plan. If there is a conflict between one or more provisions of this Award Agreement and one or more provisions of the Plan,

the provisions of the Plan will govern. Capitalized terms used and not defined in this Award Agreement will have the meaning set forth in the Plan.

97.Administrator Authority. The Administrator will have the power to interpret the Plan and this Award Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret or revoke any such rules (including, but not limited to, the determination regarding whether any Shares of Restricted Stock have vested). All actions taken, and all interpretations and determinations made, by the Administrator in good faith will be final and binding upon Participant, the Company and all other interested persons. No member of the Administrator will be personally liable for any action, determination or interpretation made in good faith with respect to the Plan or this Award Agreement.

98.Electronic Delivery and Acceptance; Translation. The Company may, in its sole discretion, decide to deliver any documents related to Participant’s current or future participation in the Plan, this Award, the Shares subject to this Award, any other securities of the Company or any other Company-related documents, by electronic means. By accepting this Award, whether electronically or otherwise, Participant hereby (i) consents to receive such documents by electronic means, (ii) consents to the use of electronic signatures, and (iii) agrees to participate in the Plan and/or receive any such documents through an on-line or electronic system established and maintained by the Company or a third party designated by the Company, including but not limited to the use of electronic signatures or click-through electronic acceptance of terms and conditions.

99.Translation. If Participant has received this Award Agreement, including appendices, or any other document related to the Plan translated into a language other than English, and the meaning of the translated version is different than the English version, the English version will control.

100.Captions. Captions provided herein are for convenience only and are not to serve as a basis for interpretation or construction of this Award Agreement.

101.Agreement Severable. If any provision in this Award Agreement will be held invalid or unenforceable, such provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of this Award Agreement.

102.Modifications to the Award Agreement. This Award Agreement constitutes the entire understanding of the parties on the subjects covered. Participant expressly warrants that he or she is not accepting this Award Agreement in reliance on any promises, representations, or inducements other than those contained herein. Modifications to this Award Agreement or the Plan can be made only in an express written contract executed by a duly authorized officer of the Company. Notwithstanding anything to the contrary in the Plan or this Award Agreement, the Company reserves the right to revise this Award Agreement as it deems necessary or advisable, in its sole discretion and without the consent of Participant, to comply with Code Section 409A or to otherwise avoid imposition of any additional tax or income recognition under Code Section 409A in connection to this Award of Restricted Stock.

103.Data Privacy. Participant hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of Participant’s Personal Data (as described below) by and among, as applicable, the Company, any Parent, Subsidiary, or affiliate, or third parties as may be selected by the Company for the exclusive purpose of implementing, administering and managing Participant’s participation in the Plan. Participant understands that refusal or withdrawal of consent will affect Participant’s ability to participate in the Plan; without providing consent, Participant will not be able to participate in the Plan or realize benefits (if any) from the Restricted Stock.

Participant understands that the Company and any Parent, Subsidiary, affiliate, or designated third parties may hold personal information about Participant, including, but not limited to, Participant’s name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company or any Parent, Subsidiary, or affiliate, details of all Restricted Stock or any other entitlement to Shares awarded, canceled, exercised, vested, unvested or outstanding in Participant’s favor (“Personal Data”). Participant understands that Personal Data may be transferred to any Parent, Subsidiary, affiliate, or third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in the United States, Participant’s country (if different than the United States), or elsewhere, and that the recipient’s country may have different data privacy laws and protections than Participant’s country. In particular, the Company may transfer Personal Data to the broker or stock plan administrator assisting with the Plan, to its legal counsel and tax/accounting advisor, and to the affiliate or entity that is Participant’s employer and its payroll provider.

Participant should also refer to any data privacy policy implemented by the Company (which will be available to Participant separately and may be updated from time to time) for more information regarding the collection, use, storage, and transfer of Participant’s Personal Data.

104.Foreign Exchange Fluctuations and Restrictions. Participant understands and agrees that the future value of the underlying Shares is unknown and cannot be predicted with certainty and may decrease. Participant also understands that neither the Company, nor any affiliate is responsible for any foreign exchange fluctuation between local currency and the United States Dollar or the selection by the Company or any affiliate in its sole discretion of an applicable foreign currency exchange rate that may affect the value of the Restricted Stock or Shares received (or the calculation of income or Tax-Related Items thereunder). Participant understands and agrees that any cross-border remittance made to transfer proceeds received upon the sale of Shares must be made through a locally authorized financial institution or registered foreign exchange agency and may require the Participant to provide such entity with certain information regarding the transaction.

105.Amendment, Suspension or Termination of the Plan. By accepting this Award, Participant expressly warrants that he or she has received an Award of Restricted Stock under the Plan, and has received, read and understood a description of the Plan. Participant understands that the Plan is discretionary in nature and may be amended, suspended or terminated by the Company at any time.

106.Governing Law and Venue. This Award Agreement will be governed by the laws of the State of California, without giving effect to the conflict of law principles thereof. For purposes of litigating any dispute that arises under this Award of Restricted Stock or this Award Agreement, the parties hereby submit to and consent to the jurisdiction of the State of California, and agree that such litigation will be conducted in the courts of San Francisco County, California, or the federal courts for the United States for the Northern District of California, and no other courts.

Country-Specific Addendum

This Addendum includes additional country-specific notices, disclaimers, and/or terms and conditions that apply to individuals who are working or residing in the countries listed below, if any, and that may be material to Participant’s participation in the Plan. Such notices, disclaimers, and/or terms and conditions may also apply, as from the date of grant, if Participant moves to or otherwise is or becomes subject to the Applicable Laws or company policies of any country listed below. However, because foreign exchange regulations and other local laws are subject to frequent change, Participant is advised to seek advice from his or her own personal legal and tax advisor prior to accepting the Restricted Stock or holding or selling Shares acquired under the Plan. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding Participant’s acceptance of the Restricted Stock or participation in the Plan. Unless otherwise noted below, capitalized terms shall have the same meaning assigned to them under the Plan, the Notice of Restricted Stock Grant and the Award Agreement. This Addendum forms part of the Award Agreement and should be read in conjunction with the Award Agreement and the Plan.

Securities Law Notice: Unless otherwise noted, neither the Company nor the Shares are registered with any local stock exchange or under the control of any local securities regulator outside the United States. The Award Agreement (of which this Addendum is a part), the Notice of Restricted Stock Grant, the Plan, and any other communications or materials that you may receive regarding participation in the Plan do not constitute advertising or an offering of securities outside the United States, and the issuance of securities described in any Plan-related documents is not intended for public offering or circulation in your jurisdiction.

EX-10.26

Exhibit 10.26

Certain information contained in this exhibit, marked by [***], has been excluded from this exhibit in accordance with Item 601(b)(10) of Regulation S-K because the registrant has determined that it is both not material and is the type that the registrant treats as private or confidential.

To:

European Investment Bank

100, boulevard Konrad Adenauer

L-2950 Luxembourg

Luxembourg

Email address: OPS-ENPST3-Secretariat@eib.org

To the kind attention of: OPS-ENPST3-Secretariat

Luxembourg, 20 October 2023

Dear Sirs,

RE: ERYDEL (EGFF) – Accession, Amendment and Restatement Agreement relating to the Finance Contract dated 24 July 2020, as amended from time to time, between the European Investment Bank and Erydel S.p.A.

We received your proposal dated 20 October 2023, which we hereby reproduce below in its entirety and signed at the end for our acknowledgment and acceptance:

*** *** ***

To:

Erydel S.p.A.

3, Via Meucci

20091, Bresso (MI)

Italy

E-mail: [***]

To the kind attention of: Chief Executive Officer

ERYDEL ITALY, INC.

601 Gateway Blvd. Suite 1250

South San Francisco, CA 94080

Delaware, USA incorporation

E-mail: [***]

To the kind attention of: Brendan Hannah, CBO

QUINCE THERAPEUTICS, INC.

601 Gateway Blvd. Suite 1250

South San Francisco, CA 94080

Delaware, USA incorporation

E-mail: [***]

To the kind attention of: Brendan Hannah, CBO

ERYDEL US, INC.

601 Gateway Blvd. Suite 1250

South San Francisco, CA 94080

Delaware, USA incorporation

E-mail: [***]

To the kind attention of: Brendan Hannah, CBO

ERYDEL USA, INC.

601 Gateway Blvd. Suite 1250

South San Francisco, CA 94080

Delaware, USA incorporation

E-mail: [***]

To the kind attention of: Brendan Hannah, CBO

Luxembourg, 20 October 2023

Dear Sirs,

RE: ERYDEL (EGFF) – Accession, Amendment and Restatement Agreement to the Finance Contract dated 24 July 2020, as amended from time to time, between the European Investment Bank and Erydel S.p.A.

Following our recent conversations, please find below our proposal of an Amendment and Restatement Agreement to the Finance Contract dated 24 July 2020, as amended from time to time, between ERYDEL S.p.A., ERYDEL ITALY, INC., QUINCE THERAPEUTICS, INC., ERYDEL US, INC., ERYDEL USA, INC. and the European Investment Bank:

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* * *

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ACCESSION, AMENDMENT AND RESTATEMENT AGREEMENT

TO THE FINANCE CONTRACT

relating to the Finance Contract dated 24 July 2020, as amended from time to time

between the

EUROPEAN INVESTEMENT BANK

as Bank

and

ERYDEL S.p.A.

as Borrower

and

ERYDEL ITALY, INC.

QUINCE THERAPEUTICS, INC.

ERYDEL US, INC.

ERYDEL USA, INC.

as Guarantors

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CONTENTS

1.	INTERPRETATION	5
1.1	Definitions	5
1.2	Construction	6
2.	CONDITIONS PRECEDENT	6
3.	ACCESSION AND AMENDMENT	6
4.	STATUS OF DOCUMENTS	7
4.1	Finance Contract	7
4.2	No Novation	7
4.3	Further Assurance	7
4.4	Finance Document	7
4.5	Reservation of Rights	7
4.6	Security Interest Confirmation	7
5.	REPRESENTATIONS AND WARRANTIES	7
5.1	Reliance	8
5.2	Incorporation	8
5.3	Power and Capacity	8
5.4	Authorisation	8
5.5	Non Contravention	8
5.6	Obligations Binding	8
5.7	Repetition	8
6.	MISCELLANEOUS	8

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THIS ACCESSION, AMENDMENT AND RESTATEMENT AGREEMENT RELATING TO THE FINANCE CONTRACT DATED 24 JULY 2020, AS AMENDED FROM TIME TO TIME, (the"AGREEMENT")is made on 20 October 2023 between:

THE EUROPEAN INVESTMENT BANK, having its seat at 100 blvd Konrad Adenauer, Luxembourg, L-2950 Luxembourg, represented by the signatories whose names appear on the signatures’ pages (the "Bank");

ERYDEL S.p.A., a private limited liability company incorporated under the laws of the Italian Republic, having its registered office at 3, Via Meucci, Bresso (MI), 20091, Italy, registered at the Company Registrar of Milano-Monza-Brianza-Lodi with taxpayer identification and registry number [***], with share capital of Euro 4,246,046, liberated and paid in for Euro 4,246,046, represented by Mr Luca Benatti (the "Borrower");

ERYDEL ITALY, INC., a corporation incorporated under the laws of Delaware, USA, having its registered office at 601 Gateway Blvd., Suite 1250, South San Francisco, California 94080, with taxpayer identification number [***], represented by Mr. Dirk Thye (the "Guarantor 1");

QUINCE THERAPEUTICS, INC., a corporation incorporated under the laws of Delaware, USA having its registered office at 601 Gateway Blvd., Suite 1250, South San Francisco, California 94080, with taxpayer identification number [***], represented by Mr. Dirk Thye (the "Guarantor 2");

ERYDEL US, INC., a corporation incorporated under the laws of Delaware, USA having its registered office at 601 Gateway Blvd., Suite 1250, South San Francisco, California 94080, with taxpayer identification number [***], represented by Mr Dirk Thye (the "Guarantor 3"); and

ERYDEL USA, INC., a corporation incorporated under the laws of Delaware, USA having its registered office at 601 Gateway Blvd., Suite 1250, South San Francisco, California 94080, with taxpayer identification number [***], represented by Mr Luca Benatti (the "Guarantor 4", jointly with the Guarantor 1, the Guarantor 2 and the Guarantor 3, the "Guarantors" and each of them, the "Guarantor").

The Bank, the Borrower and the Guarantors are jointly referred to as the "Parties" and each of them as the "Party".

WHEREAS

I. The Bank and the Borrower entered into a finance contract dated 24 July 2020, as amended from time to time, pursuant to which the Bank agreed to make available facilities to the Borrower upon the terms and conditions contained therein (the "Original Finance Contract").

II. The Parties to this Agreement have agreed to enter into this Agreement in order to amend and restate the terms of the Original Finance Contract in the manner set out below.

1. INterpretation

1.1 Definitions

In this Agreement:

"Amended and Restated Finance Contract" means the Original Finance Contract as amended and restated in accordance with this Agreement in the form set out in Schedule 1 (Amended and Restated Finance Contract).

"Effective Date" means the date of this Agreement, subject to the fulfilment of the conditions precedent set out in Article 2.

"Finance Documents" has the meaning given to it in the Amended and Restated Finance Contract.

"Guarantee Agreement" means each of:

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(a) a guarantee agreement in form and substance satisfactory to the Bank to be entered into by, inter alia, the Guarantor 1 as guarantor and the Bank as beneficiary;

(b) a guarantee agreement in form and substance satisfactory to the Bank to be entered into by, inter alia, the Guarantor 2 as guarantor and the Bank as beneficiary;

(c) a guarantee agreement in form and substance satisfactory to the Bank to be entered into by, inter alia, the Guarantor 3 as guarantor and the Bank as beneficiary; and

(d) a guarantee agreement in form and substance satisfactory to the Bank to be entered into by, inter alia, the Guarantor 4 as guarantor and the Bank as beneficiary.

"Obligors" has the meaning given to it in the Amended and Restated Finance Contract.

"New Finance Documents" means jointly:

(a) this Agreement; and

(b) each Guarantee Agreement.

1.2 Construction

(a) Clause 1.1 (Interpretation) of the Amended and Restated Finance Contract will be deemed to be set out in full in this Agreement, but as if references in this clause to the "Contract" were references to this Agreement.

(b) Unless a contrary intention appears in this Agreement, any word or expression defined in the Amended and Restated Finance Contract will have the same meaning when it is used in this Agreement.

2. CONDITIONS PRECEDENT

2.1 This Agreement shall take effect on the Effective Date if, on that date, the Bank has received all of the documents and other evidence listed in Schedule 2 (Conditions Precedent to be satisfied on or before the Effective Date) in form and substance satisfactory to it (subject to any waiver of the requirement to deliver those documents and other evidence agreed by the Bank).

2.2 The conditions precedent provided for in Article 2.1 are stipulated for the sole benefit of the Bank.

3. ACCESSION AND AMENDMENT

3.1 With effect from the Effective Date,

(a) each Guarantor hereby accedes to the Amended and Restated Finance Contract (as guarantor) and each of the other Parties to this Agreement agrees to this accession;

(b) each Guarantor hereby agrees to be bound by all provisions and terms of the Amended and Restated Finance Contract (as guarantor) as if each Guarantor was an original party to the Original Finance Contract (as guarantor); and

(c) each Guarantor hereby confirms that it is familiar with the content of the Amended and Restated Finance Contract, the other Finance Documents and other documents indicated in the Amended and Restated Finance Contract. In addition, each Guarantor hereby confirms that it has no reservations as to the content of these documents.

3.2 With effect from the Effective Date,

(a) the Original Finance Contract will be amended and restated in the form set out in Schedule 1 (Amended and Restated Finance Contract); and

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(b) the rights and obligations of the Bank and the Borrower under the Original Finance Contract shall be governed by, and construed in accordance with, the terms of the Amended and Restated Finance Contract.

3.3 The Parties to this Agreement agree that, with effect from the Effective Date, they shall have the rights and take on the obligations ascribed to them under the Amended and Restated Finance Contract.

4. STATUS OF DOCUMENTS

4.1 Finance Contract

Except as varied by the terms of this Agreement, the Original Finance Contract will remain in full force and effect, and any reference in the Amended and Restated Finance Contract to "the Contract", "this Agreement", "herein" and similar terms, or to any provision of the Original Finance Contract, will be construed as a reference to the Amended and Restated Finance Contract, or that provision as amended and restated by this Agreement.

4.2 No Novation

The Parties agree that, notwithstanding the amendments made to the Original Finance Contract in accordance with this Agreement, there shall be no novation whatsoever of any of the rights and obligations of the Parties under the Finance Documents and nothing in this Agreement or any other Finance Document shall be construed as indicating any intention of the Parties to cause any novation whatsoever under the Finance Documents.

4.3 Further Assurance

Each Guarantor shall, at the reasonable request of the Bank and at its own expense, do all such acts and things necessary to give effect to the amendments effected or to be effected by this Agreement.

4.4 Finance Document

This Agreement constitutes a Finance Document.

4.5 Reservation of Rights

The amendment and restatement made by this Agreement is made strictly on the basis of the terms of this Agreement and without prejudice to the other rights of the Parties to the Finance Documents. Nothing in this Agreement shall be deemed to constitute a waiver of any Default or any consent or waiver under any Finance Document whatsoever.

4.6 Security Interest Confirmation

The security interests granted by each Obligor pursuant to the Finance Documents continue in full force and effect following the amendment and restatement of the Original Finance Contract in accordance with this Agreement without any novation whatsoever.

5. REPRESENTATIONS AND WARRANTIES

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5.1 Reliance

The Borrower and each Guarantor represents and warrants as set out in the following provisions of this clause 5 and acknowledges that the Bank has entered into this Agreement, and has agreed to the amendment and restatement made by this Agreement, in full reliance on those representations and warranties.

5.2 Incorporation

The Borrower and each Guarantor is duly incorporated and validly existing under the laws of its jurisdiction of incorporation and has the power to own its assets and carry on its business as it is being conducted.

5.3 Power and Capacity

It has the power and capacity to enter into and comply with its obligations under this Agreement.

5.4 Authorisation

All authorisations, consents and filings required:

(a) to authorise the entry into, the exercise of its rights and the performance of and the compliance with its obligations under this Agreement, and to carry out the transactions contemplated by this Agreement;

(b) to ensure that its obligations under this Agreement are valid, legally binding and enforceable in accordance with its terms; and

(c) to make this Agreement admissible in evidence in the jurisdiction in which it is incorporated (other than obtaining certified translations into the official language of such jurisdiction) have been obtained and are in full force and effect.

5.5 Non Contravention

The entry by each of the Borrower and the Guarantors into, the exercise of its rights under and the compliance with its obligations under this Agreement do not:

(a) contravene any law, rule, statutes, regulation, judgment, decree, permit or order to which the Borrower or a Guarantor, as applicable, is subject;

(b) conflict with its constitutional documents;

(c) breach any agreement or the terms of any document binding upon it or any of its assets upon which it might reasonably be expected to have a material adverse effect or its ability to perform its obligations under this Agreement; or

(d) oblige the Borrower or a Guarantor, as applicable, to create any Security or result in the creation of any Security over any assets of the Borrower or a Guarantor, as applicable, other than under the Finance Documents.

5.6 Obligations Binding

The obligations expressed to be assumed by the Borrower or a Guarantor under this Agreement constitute valid and legally binding obligations and are enforceable in accordance with their terms.

5.7 Repetition

The representations and warranties in this Article 5 (Representations and Warranties) are made on the date of this Agreement and on the Effective Date, in each case by reference to the facts and circumstances existing on that date.

6. MISCELLANEOUS

The provisions of Article 9.4 (Non-Waiver), Article 10.1 (Governing Law), Article 10.2 (Jurisdiction), Article 10.3 (Place of performance), 10.4 (Evidence of sums due), 10.6 (Invalidity), 10.8 (Assignment and transfer by the Bank) and Article 10.9 (Negotiations)

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of the Original Finance Contract shall be incorporated into this Agreement as if set out in full in this Agreement and as if references in those clauses to "this Contract" or "the Finance Documents" were references to this Agreement.

[SIGNATURE PAGE FOLLOWS]

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Schedule 1

Amended and Restated Finance Contract

Certain information contained in this exhibit, marked by [***], has been excluded from this exhibit in accordance with Item 601(b)(10) of Regulation S-K because the registrant has determined that it is both not material and is the type that the registrant treats as private or confidential.

Contract number (FI No): 91932

Contract number (FI No): 92599

Serapis No: 2020-0006

ERYDEL (EGFF)

Amended and Restated Finance Contract

between the

European Investment Bank

and

Erydel S.p.A.

and

ERYDEL ITALY, INC.
QUINCE THERAPEUTICS, INC.
ERYDEL US, INC.
ERYDEL USA, INC.

Subject to tax exemption regime provided for by Article 2 of Law 1231 of October 31, 1961

Article 1		9
1.1	Interpretation	9
Article 2		17
2.1	Amount of Credit	17
2.2	Disbursement procedure	17
2.2.1	Tranches	17
2.2.2	Disbursement Offer	17
2.2.3	Disbursement Acceptance	18
2.3	Disbursement Account	18
2.4	Currency of disbursement	18
2.5	Conditions of Disbursement	18
2.5.1	Initial Documentary Conditions Precedent	18
2.5.2	All Tranches - Documentary Conditions Precedent	19
2.5.3	All Tranches – Other Conditions	19
2.5.4	Tranche A – Additional Conditions Precedent	20
2.5.5	Tranche B – Additional Conditions Precedent	20
2.5.6	Tranche C – Additional Conditions Precedent	20
2.5.7	Tranche D – Additional Conditions Precedent	20
2.6	Cancellation	20
2.7	Fee for cancellation of an Accepted Tranche	21
2.8	Cancellation after expiry of the Credit	21
2.9	Drop Dead Fee	21
2.10	Sums due under Article 2	21
Article 3		22
3.1	Amount of Loan	22
3.2	Currency of repayment, interest and other charges	22
Article 4		22
4.1	Fixed Rate Tranches	22
4.2	Deferred Interest Tranches	22

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4.3	Additional Remuneration	22
4.4	Interest on overdue sums	22
4.5	Italian Usury Legislation	23
Article 5		23
5.1	Normal repayment	23
5.1.1	Repayment of Tranche A and Tranche B	23
5.1.2	Repayment of Tranche C and Tranche D	23
5.2	Voluntary prepayment	23
5.2.1	Prepayment option	23
5.2.2	Prepayment Fee	24
5.2.3	Prepayment mechanics	24
5.3	Compulsory prepayment	24
5.3.1	Cost Reduction	24
5.3.2	Change Events	24
5.3.3	Illegality	24
5.3.4	Change in business	25
5.3.5	Disposals	25
5.3.6	Breach of pari passu	25
5.3.7	Voluntary Additional Remuneration Event	25
5.3.8	Prepayment Fee	25
5.3.9	Prepayment mechanics	25
5.4	General	25
Article 6		26
6.1	Day count convention	26
6.2	Time and place of payment	26
6.3	No set-off by the Borrower	26
6.4	Disruption to Payment Systems	26
6.5	Application of sums received	27
6.5.1	General	27
6.5.2	Partial payments	27

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6.5.3	Allocation of sums related to Tranches	27
Article 7		27
Article 8		28
8.1	Taxes, duties and fees	28
8.2	Other charges	28
8.3	Increased costs, indemnity and set-off	28
Article 9		28
9.1	Right to demand repayment	28
9.2	Other rights at law	30
9.3	Prepayment Fee	30
9.4	Non-Waiver	30
Article 10		30
10.1	Governing Law	30
10.2	Jurisdiction	30
10.3	Place of performance	30
10.4	Evidence of sums due	30
10.5	Entire Agreement	30
10.6	Invalidity	30
10.7	Amendments	31
10.8	Assignment and transfer by the Bank	31
and “Controlling” and “Controlled” have corresponding meanings.		31
10.9	Negotiations	31
Article 11		32
11.1	Notices	32
11.1.1	Form of notice	32
11.1.2	Addresses	32
11.1.3	Demand after notice to remedy	33
11.2	English language	33
Schedule A		34
Investment Specification and Reporting		34

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A.1	Technical Description	34
A.2	Information Duties	34
Schedule B		37
Definition of EURIBOR		37
Schedule C		39
Form of Disbursement Offer/Acceptance		39
Schedule D		41
Form of Drawdown Certificate		41
Schedule E		42
Form of Compliance Certificate		42
Schedule F		43
Initial Documentary Conditions Precedent		43
Schedule G		44
Representations and Warranties		44
1.	Authorisations and Binding Obligations	44
2.	No default or other adverse event	44
3.	No proceedings	44
4.	Security	45
5.	Ranking	45
6.	Anti-Corruption	45
7.	Accounting and Tax	45
8.	Information provided	46
9.	No indebtedness	46
10.	No Immunity	46
11.	Pensions	46
Schedule H		47
General Undertakings		47
1.	Use of Loan	47
2.	Completion of Investment	47
3.	Procurement procedure	47

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4.	Compliance with laws	47
5.	Environment	47
6.	Integrity	47
7.	Integrity Audit Rights	47
8.	Disposal of assets	48
9.	Maintenance of assets	48
10.	Ranking	48
11.	Insurances	49
12.	Change in business	49
13.	Merger	49
14.	Books and records	49
15.	Ownership	49
16.	Acquisitions	50
17.	Indebtedness	51
18.	Guarantees	51
19.	Hedging	52
20.	Restrictions on distributions	52
21.	Restrictions on loans	52
22.	Restrictions on intercompany loans	53
23.	Intellectual Property Rights	53
24.	Maintenance of Status	53
25.	Negative pledge	53
26.	Data Protection	54
27.	Other Undertakings	54
28.	Minimum Cash Balance	55
Schedule I		56
Information and Visits		56
1.	Information concerning the Investment	56
2.	Information concerning the Borrower	57
3.	Visits by the Bank	57

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4.	Disclosure and publication	58
5.	Information concerning payments made to the Bank	58
Schedule J		60
Additional Remuneration		60
1.	Definitions	60
2.	Additional Remuneration	61
3.	Calculation of the Additional Remuneration	61
4.	Duration and Payment Dates	61
5.	Remuneration stream buy back option	61
6.	Appointment of the Independent Expert	62
7.	Miscellaneous	63
Schedule K		64
Form of Payment Notice		64

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THIS CONTRACT IS MADE BETWEEN

The European Investment Bank having its seat at 100 blvd Konrad Adenauer, Luxembourg, L-2950 Luxembourg, represented by the signatories whose names appear on the signatures’ pages	(the "Bank")
AND
ERYDEL S.p.A., a private limited liability company incorporated under the laws of the Italian Republic, having its registered office at 3, Via Meucci, Bresso (MI), 20091, Italy, registered at the Company Registrar of Milano-Monza-Brianza-Lodi, with taxpayer identification and registry number [***], with share capital of Euro 4,246,046, liberated and paid in for Euro 4,426,046, represented by Mr Luca Benatti	(the "Borrower")
ERYDEL ITALY, INC., a corporation incorporated under the laws of Delaware, USA having its registered office at 601 Gateway Blvd., Suite 1250, South San Francisco, California 94080, with taxpayer identification number [***], represented by Dirk Thye	(the "Guarantor 1")
QUINCE THERAPEUTICS, INC., a corporation incorporated under the laws of Delaware, USA having its registered office at 601 Gateway Blvd., Suite 1250, South San Francisco, California 94080, with taxpayer identification number [***], represented by Dirk Thye	(the "Guarantor 2")
ERYDEL US, INC., a corporation incorporated under the laws of Delaware, USA having its registered office at 601 Gateway Blvd., Suite 1250, South San Francisco, California 94080, with taxpayer identification number [***], represented by Dirk Thye	(the "Guarantor 3")
ERYDEL USA, INC., a corporation incorporated under the laws of Delaware, USA having its registered office at 601 Gateway Blvd., Suite 1250, South San Francisco, California 94080, with taxpayer identification number [***], represented by Luca Benatti	(the "Guarantor 4")

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WHEREAS:

(A) The Borrower has stated that it is undertaking in Italy a research and development of novel therapies for rare diseases (e.g., Ataxia Telangiectasia, hereinafter “AT”), delivered through encapsulation into human erythrocytes (red blood cells) using a drug delivery device as more particularly described in the technical description (the "Technical Description") set out in Schedule A (Investment Specification and Reporting) (the "Investment"). The total cost of the Investment, as estimated by the Bank, is EUR 64,000,000 (sixty four million euro).

(B) The Bank, considering that the financing of the Investment falls within the scope of its functions, agreed to provide the Borrower with a credit in an amount of EUR 30,000,000 (thirty million euro) under this Finance Contract (the "Contract") to finance the Investment; provided that the amount of the loan hereunder shall not, in any case, exceed 50% (fifty per cent) of the cost of the Investment.

(C) This operation benefits from a guarantee from the European Union under the European Fund for Strategic Investments ("EFSI").

(D) The statute of the Bank provides that the Bank shall ensure that its funds are used as rationally as possible in the interests of the European Union and, accordingly, the terms and conditions of the Bank's loan operations must be consistent with relevant policies of the European Union.

(E) The Bank considers that access to information plays an essential role in the reduction of environmental and social risks, including human rights violations, linked to the projects it finances and has therefore established its transparency policy, the purpose of which is to enhance the accountability of the Bank’s group towards its stakeholders and the citizens of the European Union in general.

(F) The processing of personal data shall be carried out by the Bank in accordance with applicable European Union legislation on the protection of individuals with regard to the processing of personal data by the European Union institutions and bodies and on the free movement of such data.

(G) The Bank supports the implementation of international and EU standards in the field of anti-money laundering and countering the financing of terrorism and promotes tax good governance standards. It has established policies and procedures to avoid the risk of misuse of its funds for purposes, which are illegal or abusive in relation to applicable laws. The Bank’s group statement on tax fraud, tax evasion, tax avoidance, aggressive tax planning, money laundering and financing of terrorism is available on the Bank’s website and offers further guidance to the Bank’s contracting counterparties.

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It is hereby agreed as follows:

Interpretation and definitions

Interpretation

In this Contract:

(a) references to Articles, Recitals, Schedules and Paragraphs are, save if explicitly stipulated otherwise, references respectively to articles of, and recitals, schedules and paragraphs of schedules to, this Contract. All Recitals and Schedules form part of this Contract;

(b) references to “law" or “laws” mean (a) any applicable law and any applicable treaty, constitution, statute, legislation, decree, normative act, rule, regulation, judgement, order, writ, injunction, determination, award or other legislative or administrative measure or judicial or arbitral decision in any jurisdiction which is binding or applicable case law, and (b) EU Law;

(c) references to applicable law, applicable laws or applicable jurisdiction means (a) a law or jurisdiction applicable to the Borrower and/or any other Obligor (as the context requires), its rights and/or obligations (in each case arising out of or in connection with the Contract and/or any other Finance Documents), its capacity and/or assets and/or the Investment; and/or, as applicable, (b) a law or jurisdiction (including in each case the Bank’s Statute) applicable to the Bank, its rights, obligations, capacity and/or assets;

(d) references to a provision of law are references to that provision as amended or re-enacted;

(e) references to any other agreement or instrument are references to that other agreement or instrument as amended, novated, supplemented, extended or restated;

(f) words and expressions in plural shall include singular and vice versa;

(g) a Default (other than an Event of Default) is "continuing" if it has not been remedied or waived and an Event of Default is "continuing" if it has not been waived; and

(h) terms defined in the GDPR (as defined below), including the terms “data subject”, “personal data” and “processing” have the same meanings when used in Recital (G) or Paragraph 26 (Data Protection) of Schedule H (General Undertakings) of this Contract.

(i) in this Contract, where it relates to an Italian Obligor, a reference to:

(i) a winding-up, insolvency, administration, dissolution, liquidation, reorganization, voluntary or involuntary case includes, without limitation, any liquidazione, procedura concorsuale (fallimento, concordato preventivo, concordato fallimentare, liquidazione coatta amministrativa, amministrazione straordinaria o ristrutturazione industriale delle grandi imprese in stato d'insolvenza), as well as, starting from the effective date of the relevant provisions under the Italian Crisis and Insolvency Code (D.Lgs. 12 January 2019, no.14), judicial liquidation (liquidazione giudiziale), restructuring plans (piani attestati di risanamento), restructuring agreements (accordi di ristrutturazione del debito), arrangement with creditors (concordato preventivo), forced administrative liquidation (liquidazione coatta amministrativa), the entity being brought before the organismo di composizione della crisi di impresa (OCRI) for the assisted composition procedure (procedimento di composizione assistita della crisi)

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and any other procedure indicated in the Italian Crisis and Insolvency Code, and any other proceedings or legal concepts similar to the forgoing;

(ii) a receiver, liquidator, administrator, administrative receiver or similar officer or the like includes, without limitation, a curatore, commissario giudiziale, commissario straordinario, commissario liquidatore, or any other person performing the same function of each of the foregoing;

(iii) a “step” or “procedure”, taken in connection with insolvency proceedings in respect of any person, includes such person formally making a proposal to assign its assets pursuant to article 1977 of the Italian Civil Code (cessione dei beni ai creditori), or filing a formal petition or a pre-petition (domanda prenotativa) for a concordato preventivo pursuant to article 160 ff. of the Italian Insolvency Law or entering into restructuring arrangements pursuant to article 182-bis of Italian Insolvency Law or entering into any arrangement pursuant to article 67 of Italian Insolvency Law as well as, starting from the effective date of the relevant provisions under the Italian Crisis and Insolvency Code, any action taken in connection with the procedures indicated under point (i) above, including the filing of a petition establishing the unified process for the access to the insolvency or crisis settlement procedures (procedimento unitario per l’accesso alle procedure di regolazione della crisi o dell’insolvenza) and any other proceedings or legal concepts similar to the forgoing.

Definitions

In this Contract:

"Accepted Tranche" means a Tranche in respect of a Disbursement Offer which has been duly accepted by the Borrower in accordance with its terms on or before the Disbursement Acceptance Deadline

"acting in concert" means acting together pursuant to an agreement or understanding (whether formal or informal).

"Additional Remuneration" means the variable remuneration due by the Borrower to the Bank pursuant Article 4.3 (Additional Remuneration) and calculated according to Schedule J (Additional Remuneration).

“AT” has the meaning given to it in Recital (A).

"Authorisation" means an authorisation, permit, consent, approval, resolution, licence, exemption, filing, notarisation or registration.

"Authorised Signatory" means a person authorised to sign individually or jointly (as the case may be) Disbursement Acceptances on behalf of the Borrower and named in the most recent List of Authorised Signatories and Accounts received by the Bank prior to the receipt of the relevant Disbursement Acceptance.

"Business Day" means a day (other than a Saturday or Sunday) on which the Bank and commercial banks are open for general business in Luxembourg.

“Cancellation Fee” means, in relation to the cancellation of an Accepted Tranche by the Borrower, under sub-paragraph (a) of Article 2.7 (Fee for cancellation of an Accepted Tranche), or in relation to an amount cancelled by the Bank under sub-paragraphs (b) or (c) of Article 2.7 (Fee for cancellation of an Accepted Tranche), a fee of [***]% ([***] basis points) of the cancelled amount).

"Change in the Beneficial Ownership" means a change in the ultimate ownership or control of the Borrower according to the definition of "beneficial owner" set out in article 3(6) of Directive 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, as amended, supplemented or restated.

"Change-of-Control Event" means (a) any person or group of persons acting in concert gaining Control of the Borrower or of any entity directly or ultimately Controlling the Borrower, or (b) any disposal of shares in the Borrower and/or the Guarantor 2 and/or

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any Parent held by Mr Dirk Thye or Mr Charles Ryan, unless automatically triggered sales are used to cover tax liabilities on shares granted.

"Change-of-Law Event" means the enactment, promulgation, execution or ratification of or any change in or amendment to any law, rule or regulation (or in the application or official interpretation of any law, rule or regulation) that occurs after the date of this Contract and which, in the reasonable opinion of the Bank, would materially impair an Obligor's ability to perform its obligations under the Finance Documents.

"Compliance Certificate" means a certificate substantially in the form set out in Schedule E (Form of Compliance Certificate).

"Contract Number" shall mean each Bank generated number identifying this Contract and indicated on the cover page of this Contract after the letters "FI N°".

"Control" means the power to direct the management and policies of an entity, whether through the ownership of voting capital, by contract or otherwise and, for the avoidance of doubt, owning more than 50% (fifty per cent) of the shares of an entity would constitute Control.

"Credit" has the meaning given to it in Article 2.1 (Amount of Credit).

"Default" means an Event of Default or any event or circumstance specified in Article 9 (Events of Default) which would (with the expiry of a grace period, the giving of notice, the making of any determination under this Contract or any combination of any of the foregoing) be an Event of Default.

"Deferred Interest Rate" means for Tranche A and for Tranche B, 9% (nine hundred basis points) per annum.

“Deferred Interest Rate Tranche” means a Tranche, which is specified as a Deferred Interest Rate Tranche in the relevant Disbursement Offer.

"Disbursement Acceptance" means a copy of the Disbursement Offer duly countersigned by the Borrower.

"Disbursement Acceptance Deadline" means the date and time of expiry of a Disbursement Offer as specified therein.

"Disbursement Account" means, in respect of each Tranche, the bank account set out in the most recent List of Authorised Signatories and Accounts.

"Disbursement Date" means the date on which disbursement of a Tranche is made by the Bank.

"Disbursement Offer" means a letter substantially in the form set out in Schedule C (Form of Disbursement Offer/Acceptance).

"Dispute" has the meaning given to it in Article 10.2 (Jurisdiction).

"Disruption Event" means either or both of:

(a) a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with this Contract; or

(b) the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of either the Bank or the Borrower, preventing that party from:

(i) performing its payment obligations under this Contract; or

(ii) communicating with other party in accordance with the terms of this Contract,

and which disruption (in either such case as per (a) or (b) above) is not caused by, and is beyond the control of, the party whose operations are disrupted.

"Drop Dead Fee" has the meaning given to such term in Article 2.9 (Drop Dead Fee).

"EBITDA" means, in respect of any Relevant Period, the consolidated operating profit of the Group before taxation (excluding the results from discontinued operations):

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(a) before deducting any interest, commission, fees, discounts, prepayment fees, premiums or charges and other finance payments whether paid, payable or capitalised by any Group Company (calculated on a consolidated basis) in respect of that Relevant Period;

(b) not including any accrued interest owing to any Group Company;

(c) after adding back any amount attributable to the amortisation or depreciation of assets of members of the Group;

(d) before taking into account any Exceptional Items;

(e) after deducting the amount of any profit (or adding back the amount of any loss) of any Group Company which is attributable to minority interests;

(f) plus or minus the Group's share of the profits or losses (after finance costs and tax) of entities which are not Group Companies;

(g) before taking into account any unrealised gains or losses on any financial instrument (other than any derivative instrument which is accounted for on a hedge accounting basis); and

(h) before taking into account any gain arising from an upward revaluation of any other asset,

in each case, to the extent added, deducted or taken into account, as the case may be, for the purposes of determining operating profits of the Group before taxation.

"EFSI" has the meaning given in Recital (C).

"EFSI Application Form" means the Borrower's application form for financing under the EFSI Regulation dated 21 April 2020.

"EFSI Regulation" means the Regulation 2015/1017 of the European Parliament and of the Council of 25 June 2015 on the European Fund for Strategic Investments, as amended, supplemented or restated.

"Environment" means the following, insofar as they affect human health or social well-being:

(a) fauna and flora;

(b) soil, water, air, climate and the landscape; and

(c) cultural heritage and the built environment,

and includes, without limitation, occupational and community health and safety.

"Environmental Approval" means any Authorisation required by Environmental Law.

"Environmental Claim" means any claim, proceeding, formal notice or investigation by any person in respect of any Environmental Law.

"Environmental Law" means EU Law including principles and standards, and national laws and regulations, of which a principal objective is the preservation, protection or improvement of the Environment.

"EU Directives" means the directives of the European Union.

"EU Law" means the acquis Communautaire of the European Union as expressed through the Treaties of the European Union, the regulations, the EU Directives, delegated acts, implementing acts, and the case law of the Court of Justice of the European Union.

"EUR" or "euro" means the lawful currency of the Member States of the European Union, which adopt or have adopted it as their currency in accordance with the relevant provisions of the Treaty on European Union and the Treaty on the Functioning of the European Union or their succeeding treaties.

"EURIBOR" has the meaning given to it in Schedule B (Definition of EURIBOR).

"Event of Default" means any of the circumstances, events or occurrences specified in Article 9 (Events of Default).

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"Exceptional Items" means any material items of an unusual or non-recurring nature, which represent gains or losses including those arising on:

(a) the restructuring of the activities of an entity and reversals of any provisions for the cost of restructuring;

(b) disposals, revaluations, write downs or impairment of non-current assets or any reversal of any write down or impairment;

(c) disposals of assets associated with discontinued operations; and

(d) any other examples of “exceptional items” (as such term has the meaning attributed to it in IFRS).

"Fee Letter" means the letter from the Bank to the Borrower dated 28 May 2020.

"Final Availability Date" means:

(a) with reference to Tranche A and B, the day falling fourteen (14) months after the date of the Finance Contract;

(b) with reference to Tranche C and Tranche D, the day falling thirty (30) months after the date of the Finance Contract.

"Finance Documents" means this Contract, the Fee Letter, each Guarantee Agreement and any other document designated a “Finance Document” by the Borrower and the Bank.

"Finance Lease" means any lease or hire purchase contract, which would, in accordance with IFRS in force prior to 1 January 2019, be treated as a finance or capital lease.

"Fixed Rate" means:

(a) [***] per annum for Tranche C; and

(b) [***] per annum for Tranche D.

"Fixed Rate Tranche" means a Tranche, which is specified as a Fixed Rate Tranche in the relevant Disbursement Offer.

"GDPR" means General Data Protection Regulation (EU) 2016/679.

"Group" means the Group Companies, taken together as a whole.

"Group Company" means:

(a) the Borrower and its Subsidiaries;

(b) the Guarantor 2 and its Subsidiaries, including, but not limited to the Guarantor 1, the Guarantor 3 and the Guarantor 4; and/or

(c) any Parent and its Subsidiaries.

"Guarantee Agreement" means each of:

(a) a guarantee agreement in form and substance satisfactory to the Bank to be entered into by the Guarantor 1 as guarantor and the Bank as beneficiary;

(b) a guarantee agreement in form and substance satisfactory to the Bank to be entered into by the Guarantor 2 as guarantor and the Bank as beneficiary;

(c) a guarantee agreement in form and substance satisfactory to the Bank to be entered into by the Guarantor 3 as guarantor and the Bank as beneficiary;

(d) a guarantee agreement in form and substance satisfactory to the Bank to be entered into by the Guarantor 4 as guarantor and the Bank as beneficiary; and

(e) a guarantee and indemnity agreement in form and substance satisfactory to the Bank to be entered into by a Guarantor as guarantor and the Bank as beneficiary.

"Guarantor" means each of:

(a) the Guarantor 1;

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(b) the Guarantor 2;

(c) the Guarantor 3;

(d) the Guarantor 4; and/or

(e) each Material Subsidiary or any Parent, as applicable, which enters into a Guarantee Agreement in accordance with sub-paragraph (b) of Paragraph 18 (Guarantees) of Schedule H (General Undertakings).

"IFRS" means international accounting standards within the meaning of IAS Regulation 1606/2002 to the extent applicable to the relevant financial statements.

"Illegal Activities" means any of the following illegal activities or activities carried out for illegal purposes: tax evasion, tax fraud, fraud, corruption, coercion, collusion, obstruction, money laundering, financing of terrorism or any illegal activity that may affect the financial interests of the EU, according to applicable laws.

"Indebtedness" means any:

(a) obligations for borrowed money;

(b) indebtedness under any acceptance credit;

(c) indebtedness under any bond, debenture, note or similar instrument;

(d) instrument under any bill of exchange;

(e) indebtedness in respect of any interest rate or currency swap or forward currency sale or purchase or other form of interest or currency hedging transaction (including without limit caps, collars and floors);

(f) indebtedness under any Finance Lease;

(g) indebtedness (actual or contingent) under any guarantee, bond security, indemnity or other agreement;

(h) indebtedness (actual or contingent) under any instrument entered into for the purpose of raising finance;

(i) indebtedness in respect of a liability to reimburse a purchaser of any receivables sold or discounted in the event that any amount of those receivables is not paid;

(j) indebtedness arising under a securitisation; or

(k) other transaction which has the commercial effect of borrowing.

"Intellectual Property Rights" means intellectual property of every designation (including, without limitation, patents, utility patents, copyrights, design rights, trademarks, service marks and know how) whether capable of registration or not.

"Investment" has the meaning given to that term in Recital (A).

"Italian Civil Code" means Royal Decree No. 267 of 16 March 1942, as subsequently amended and supplemented from time to time.

"Lead Organisation" means the European Union, the United Nations and international standard setting organisations including the International Monetary Fund, the Financial Stability Board, the Financial Action Task Force, the Organisation for Economic Cooperation and Development and the Global Forum on Transparency and Exchange of Information for Tax Purposes and any successor organisations.

"List of Authorised Signatories and Accounts" means a list, in form and substance satisfactory to the Bank, setting out: (i) the Authorised Signatories, accompanied by evidence of signing authority of the persons named on the list and specifying if they have individual or joint signing authority, (ii) the specimen signatures of such persons, and (iii) the bank account(s) to which disbursements may be made under this Contract (specified by IBAN code if the country is included in the IBAN Registry published by SWIFT, or in the appropriate account format in line with the local banking practice), BIC/SWIFT code of the bank and the name of the bank account(s) beneficiary.

"Loan" means the aggregate of the amounts disbursed from time to time by the Bank under this Contract.

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"Loan Outstanding" means the aggregate of the amounts disbursed from time to time by the Bank under this Contract that remains outstanding.

"Material Adverse Change" means, any event or change of condition, which, in the reasonable opinion of the Bank, has a material adverse effect on:

(a) the ability of any Obligor to perform its respective obligations under the Finance Documents;

(b) the business, operations, property, condition (financial or otherwise) or prospects of any Obligor or the Group as a whole; or

(c) the legality, validity or enforceability of, or the effectiveness or ranking of, or the value of any Security granted to the Bank, or the rights or remedies of the Bank under the Finance Documents.

"Material Subsidiary" means any Subsidiary from time to time, whose gross revenues, total assets or EBITDA represents not less than 5 % (five per cent) of (i) the Revenues of the Group or, (ii) the Total Assets, or, (iii) as the case may be, the consolidated EBITDA of the Group, as calculated based on the then latest consolidated audited accounts of the Group.

"Maturity Date" means:

(a) with reference to Tranche A and Tranche B, the relevant sole Repayment Date being 11 August 2026;

(b) with reference to Tranche C and Tranche D, the last Repayment Date of that Tranche as specified in the relevant Disbursement Offer, being 5 (five) years from the Disbursement Date of the relevant Tranche.

For the avoidance of doubt, each drawdown is treated separately for specifying the “Maturity Date”.

"Non-EIB Financing" includes any loan (save for the Loan and any other direct loans from the Bank to the Borrower (or any other Group Company) or a Guarantor), credit bond or other form of financial indebtedness or any obligation for the payment or repayment of money originally granted to the Borrower (or any other Group Company) or a Guarantor) for a term of more than 3 (three) years.

"Obligor" means the Borrower and any Guarantor.

"Parent" means:

(a) the Guarantor 2; or

(b) (x) any person or group of persons Controlling the Borrower, or (y) any entity directly or ultimately Controlling the Borrower, in each case subject to the prior consent of the Bank.

"Payment Date" means:

(a) with reference to Tranche A and Tranche B, the Maturity Date;

(b) with reference to Tranche C and D, the annual dates specified in the Disbursement Offer until and including the Maturity Date,

save that, in case any such date is not a Relevant Business Day, it means the following Relevant Business Day, without adjustment to the interest due under Article 4.1 (Fixed Rate Tranches), except for those cases where a payment is made as a single instalment in accordance with Article 5.1 (Normal repayment), and to the final interest payment only, when it shall mean the preceding Relevant Business Day, with adjustment to the interest due under Article 4.1 (Fixed Rate Tranches).

"Permitted Guarantees" means each and every guarantee permitted in accordance with Paragraph 18 (Guarantees) of Schedule H (General Undertakings).

"Permitted Hedging" has the meaning given to such term in Paragraph 19 (Hedging) of Schedule H (General Undertakings).

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"Permitted Indebtedness" means Indebtedness of the Borrower and/or any Group Company which is permitted in accordance with Paragraph 17 (Indebtedness) of Schedule H (General Undertakings).

"Permitted Security" means Security of the Borrower and/or any Group Company which is permitted in accordance with sub-paragraph (c) of Paragraph 25 (Negative pledge) of Schedule H (General Undertakings).

"Prepayment Amount" means the amount of a Tranche to be prepaid by the Borrower in accordance with Articles 5.2 (Voluntary prepayment), 5.3 (Compulsory prepayment) or 9.1 (Right to demand repayment).

"Prepayment Date" means the date on which the Borrower proposes or is requested by the Bank, as applicable, to effect prepayment of a Prepayment Amount.

"Prepayment Event" means any of the events described in Article 5.3 (Compulsory Prepayment).

"Prepayment Fee" means, in relation to a Prepayment Amount in respect of a Tranche, a fee as follows:

(a) a fee of [***] of the Prepayment Amount if the Prepayment Date is after the relevant Disbursement Date but before or on the first anniversary of such Disbursement Date;

(b) a fee of [***] of the Prepayment Amount if the Prepayment Date is after the first anniversary of such Disbursement Date but before or on the second anniversary of such Disbursement Date;

(c) a fee of [***] of the Prepayment Amount if the Prepayment Date is after the second anniversary of such Disbursement Date but before the Maturity Date;

with such fee being payable on the applicable Prepayment Date.

"Prepayment Notice" means a written notice from the Bank to the Borrower in accordance with Article 5.2.3 (Prepayment mechanics).

"Prepayment Request" means a written request from the Borrower to the Bank to prepay all or part of the Loan Outstanding, in accordance with Article 5.2.1 (Prepayment option).

"Relevant Business Day" means a day on which the Trans-European Automated Real-time Gross Settlement Express Transfer payment system which utilises a single shared platform and which was launched on 19 November 2007 (TARGET2) is open for the settlement of payments in EUR.

"Relevant Period" means each period of 12 (twelve) months ending on or about the last day of the financial year.

"Repayment Date" shall mean:

(a) with reference to Tranche A and Tranche B, 11 August 2026; and

(b) with reference to Tranche C and Tranche D, each Payment Date as specified in the Disbursement Offer for the repayment of Tranche C and Tranche D in accordance with Article 5.1 (Normal repayment).

"Repeating Representations" means each of the representations set out in Schedule G (Representations and Warranties) other than those Paragraphs thereof which are identified with the words "(Non-repeating)" at the end of the Paragraphs.

"Security" means any mortgage, pledge, lien, charge, assignment, hypothecation, or other security interest securing any obligation of any person or any other agreement or arrangement having a similar effect.

"Senior Management Change" means that Mr. Dirk Thye has ceased to be the Chief Executive Officer of the Guarantor 1, the Guarantor 2, the Guarantor 3 and the Guarantor 4, and / or Mr Charles Ryan has ceased to be the Chief Executive Officer of the Borrower without the Bank having given its prior written consent to such a change.

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"Subsidiary" means any entity of which the Borrower, the Guarantor 2 or any Parent, as applicable, has direct or indirect control or owns directly or indirectly more than 50% (fifty per cent) of the voting capital or similar right of ownership and 'control' for this purpose means the power to direct the management and the policies of the entity, whether through the ownership of voting capital, by contract or otherwise.

"Tax" means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same).

"Technical Description" has the meaning given to it in Recital (A).

"Total Assets" means the total consolidated assets of the Group, as shown in the Guarantor’s 2 latest consolidated financial statements, as at the end of any Relevant Period.

"Tranche" means each disbursement made or to be made under this Contract consisting of Tranche A, Tranche B, Tranche C and Tranche D. In the event that no Disbursement Acceptance has been received, Tranche shall mean a Tranche as offered under Article 2.2.2 (Disbursement Offer).

"Tranche A" means the first Tranche in the amount set out in paragraph (a) of Article 2.2.1 (Tranches), in relation to which the Additional Remuneration is granted to the Bank and a Deferred Interest Rate shall be paid in accordance with Article 4.2 (Deferred Interest Tranches).

"Tranche B" means the second Tranche in the amount set out in paragraph (a) of Article 2.2.1 (Tranches), in relation to which the Additional Remuneration is granted to the Bank and a Deferred Interest Rate shall be paid in accordance with Article 4.2 (Deferred Interest Tranches).

"Tranche C" means the third Tranche in the amount set out in paragraph (a) of Article 2.2.1 (Tranches), in relation to which the Additional Remuneration is granted to the Bank and a Fixed Rate shall be paid in accordance with Article 4.1 (Fixed Rate Tranches).

"Tranche D" means the fourth Tranche in the amount set out in paragraph (a) of Article 2.2.1 (Tranches), in relation to which an Additional Remuneration is granted to the Bank and a Fixed Rate shall be paid in accordance with Article 4.1 (Fixed Rate Tranches).

"US GAAP" means generally accepted accounting principles in the United States of America.

"Voluntary Non EIB Prepayment" means a voluntary prepayment by any Group Company or any Guarantor (for the avoidance of doubt, prepayment shall include a repurchase, redemption or cancellation where applicable) of a part or the whole of any Non-EIB Financing where:

(a) such prepayment is not made within a revolving credit facility (save for the cancellation of the revolving credit facility); or

(b) such prepayment is not made out of the proceeds of a loan or other indebtedness having a term at least equal to the unexpired term of the Non-EIB Financing prepaid.

Credit and Disbursements

Amount of Credit

By this Contract, the Bank establishes in favour of the Borrower, and the Borrower accepts, a credit in an amount of EUR 30,000,000 (thirty million euro) for the financing of the Investment (the "Credit").

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Disbursement procedure

Tranches

The Bank shall disburse the Credit in Euros in 4 (four) Tranches, as set out below:

(a) Tranche A, in an amount of EUR [***];

(b) Tranche B, in an amount of EUR [***];

(c) Tranche C, in an amount of EUR [***]; and

(d) Tranche D, in an amount of EUR [***].

Disbursement Offer

Upon request by the Borrower and subject to Article 2.5 (Conditions of Disbursement), provided that no event mentioned in sub-paragraph (b) of Article 2.6 (Cancellation) has occurred and is continuing, the Bank shall send to the Borrower a Disbursement Offer for the disbursement of a Tranche. The latest time for receipt by the Borrower of a Disbursement Offer is 10 (ten) days before the Final Availability Date. The Disbursement Offer shall specify:

(a) the amount of the Tranche;

(b) the Disbursement Date, which shall be a Relevant Business Day, falling at least 10 (ten) days after the date of the Disbursement Offer and on or before the Final Availability Date;

(c) the interest rate basis of the Tranche, namely:

(i) that it is a Fixed Rate Tranche (in the case of Tranche C and D only);

(ii) the Fixed Rate (if applicable to such Tranche);

(iii) that it is a Deferred Interest Rate Tranche (in the case of Tranche A and Tranche B only);

(iv) the Deferred Interest Rate applicable to such Tranche (in the case of Tranche A and Tranche B only); and

(v) the Payment Dates and interest periods;

(d) the terms and frequency for repayment of principal;

(e) first Repayment Date and Maturity Date;

(f) the Disbursement Acceptance Deadline; and

(g) the Additional Remuneration payable in relation to the Tranche.

Disbursement Acceptance

(a) The Borrower may accept a Disbursement Offer by delivering a Disbursement Acceptance to the Bank no later than the Disbursement Acceptance Deadline. The Disbursement Acceptance shall be signed by an Authorised Signatory with individual representation rights or 2 (two) or more Authorised Signatories with joint representation right and shall specify the Disbursement Account to which disbursement of the Tranche should be made in accordance with Article 2.3 (Disbursement Account).

(b) If a Disbursement Offer is duly accepted by the Borrower in accordance with its terms on or before the Disbursement Acceptance Deadline, and provided the conditions in Article 2.5.3 (All Tranches – Other Conditions) are met, the Bank shall make the Accepted Tranche available to the Borrower in accordance with the relevant Disbursement Offer and subject to the terms and conditions of this Contract.

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(c) The Borrower shall be deemed to have refused any Disbursement Offer, which has not been duly accepted in accordance with its terms on or before the Disbursement Acceptance Deadline, in which case the Tranche shall not be made available to the Borrower by the Bank, and the residual Credit shall not be affected.

Disbursement Account

(a) Disbursement shall be made to the Disbursement Account specified in the relevant Disbursement Acceptance, provided that such Disbursement Account is acceptable to the Bank (acting reasonably).

(b) Only one Disbursement Account may be specified for each Tranche.

Currency of disbursement

The Bank shall disburse each Tranche in EUR.

Conditions of Disbursement

Initial Documentary Conditions Precedent

No Disbursement Offer will be provided by the Bank under this Contract unless the Bank has confirmed that it has received:

(a) all of the documents and other evidence listed in Schedule F (Initial Documentary Conditions Precedent) in form and substance satisfactory to it;

(b) a structure chart showing the Group certified as being complete and correct by an authorised signatory of the Borrower provided such certification is dated no earlier than the date falling 14 (fourteen) days before the Disbursement Date;

(c) a certificate of an authorised signatory of each Obligor certifying that each copy document relating to it specified in Schedule F (Initial Documentary Conditions Precedent) is correct, complete and in full force and effect as at a date no earlier than the date falling 14 (fourteen) days before the Disbursement Date; and

All Tranches - Documentary Conditions Precedent

No Disbursement Offer, including the first Disbursement Offer, will be provided by the Bank under this Contract unless the Bank has confirmed that it has received, in form and substance satisfactory to it:

(a) a certificate from the Borrower in the form of Schedule D (Form of Drawdown Certificate), signed by an authorised representative of the Borrower and dated no earlier than the date falling 14 (fourteen) days before the Disbursement Date; and

(b) a liquidity forecast for the next twelve months of the Borrower;

(c) evidence of the Borrower’s solvency position on the basis of:

(i) a certificate of registration (certificato di vigenza) of the Obligors with the relevant Companies' Register (Registro delle Imprese) dated not earlier than 10 (ten) days before the date of the Disbursement Offer, confirming that as at the date thereof no pending insolvency procedure (procedura concorsuale) against the relevant Obligor has been registered in the Companies' Register;

(ii) a certificate from the competent Tribunal dated not earlier than 10 (ten) days before the date of the Disbursement Offer, confirming that as at the date thereof no pending insolvency procedure (procedura concorsuale) against the relevant Obligor has been registered in the Companies' Register;

(iii) a certificate of an authorised signatory of each Obligor dated not earlier than 10 (ten) days before the date of the Disbursement Offer, certifying that, as at the date thereof:

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(1) the Borrower has a positive net capital;

(2) no circumstance or event in relation to the Borrower has occurred, which suggests that the same may likely become insolvent in the near future;

(3) the Borrower has not resolved its dissolution or liquidation, and has not filed any request to be admitted to any insolvency proceedings, nor any similar request of third parties has been notified; and

(4) all documents provided under this paragraph 2.5.2 are correct, complete, and in full force and effect at a date not earlier than the date of this Contract.

All Tranches – Other Conditions

The Bank will only be obliged to make any Accepted Tranche available to the Borrower if on the Disbursement Date for the proposed Tranche:

(a) the Repeating Representations are correct in all respects; and

(b) no event or circumstance has occurred and is continuing which constitutes or would with the expiry of a grace period and/or the giving of notice under this Contract constitute:

(i) an Event of Default; or

(ii) a Prepayment Event other than pursuant to Article 5.3.1 (Cost Reduction),

or would, in each case, result from the disbursement of the proposed Tranche.

Tranche A – Additional Conditions Precedent

Without prejudice to the generality of Articles 2.5.1 (Initial Documentary Conditions Precedent) to 2.5.3 (All Tranches – Other Conditions), no Disbursement Offer will be provided by the Bank under this Contract in respect of Tranche A unless the Bank has confirmed that it has received in form and substance satisfactory to it evidence either:

(a) that the Type C clearance has been obtained from the U.S. Food and Drug Administration, confirming the ICARS components to be included in the primary efficacy endpoint measure and validating the Phase 3 statistical analysis plan; or

(b) of successful completion of the Phase 3 study in AT with top line data demonstrating primary end points has been statistically met.

Tranche B – Additional Conditions Precedent

Without prejudice to the generality of Articles 2.5.1 (Initial Documentary Conditions Precedent) to 2.5.3 (All Tranches – Other Conditions), no Disbursement Offer will be provided by the Bank under this Contract in respect of Tranche B unless the Bank has confirmed that it has received in form and substance satisfactory to it evidence:

(a) of successful completion of the Phase 3 study in AT with top line data demonstrating primary end points has been statistically met;

(b) that the Borrower’s share capital has been increased by at least EUR [***] since the date of the Finance Contract; and

(c) of a successful equity-injection of at least EUR [***] to the Borrower, which, for the avoidance of any doubt, shall be additional to and on top of any equity injected to the Borrower until 1 June 2021.

Tranche C – Additional Conditions Precedent

Without prejudice to the generality of Articles 2.5.1 (Initial Documentary Conditions Precedent) to 2.5.3 (All Tranches – Other Conditions), no Disbursement Offer will be provided by the Bank under this Contract in respect of Tranche C unless the Bank has confirmed that it has received in form and substance satisfactory to it:

32

(a) evidence that a New Drug Application or Biologics License Application of EryDex in AT has been successfully submitted by the Borrower before the U.S. Food and Drug Administration; and

(b) evidence that in addition to the share capital increase required for the disbursement of Tranche B, the Borrower’s share capital has been increased by at least EUR [***] since the date of the Finance Contract.

Tranche D – Additional Conditions Precedent

Without prejudice to the generality of Articles 2.5.1 (Initial Documentary Conditions Precedent) to 2.5.3 (All Tranches – Other Conditions), no Disbursement Offer will be provided by the Bank under this Contract in respect of Tranche D unless the Bank has confirmed that it has received in form and substance satisfactory to it evidence of a New Drug Application or Biologics License Application approval by the U.S. Food and Drug Administration for EryDex in AT.

Cancellation

(a) The Borrower may send a written notice to the Bank requesting the cancellation of the undisbursed portion of the Credit. The written notice:

(i) must specify whether the Borrower would like to cancel the undisbursed portion of the Credit in whole or in part and, if in part, the amount of the Credit the Borrower would like to cancel; and

(ii) must not relate to an Accepted Tranche which has a Disbursement Date falling within 5 (five) Business Days of the date of the written notice.

Upon receipt of such written notice, the Bank shall cancel the requested undisbursed portion of the Credit with immediate effect.

(b) At any time upon the occurrence of the following events, the Bank may notify the Borrower in writing that the undisbursed portion of the Credit shall be cancelled in whole or in part:

(i) a Prepayment Event, which for the avoidance of doubt and only in case of event pursuant to Article 5.3.1 (Cost reduction), by an amount equal to the amount by which it is entitled to cancel the Credit;

(ii) an Event of Default; or

(iii) an event or circumstance which would with the passage of time or giving of notice under this Contract constitute a Prepayment Event other than pursuant to Article 5.3.1 (Cost reduction) or an Event of Default.

On the date of such written notification the relevant undisbursed portion of the Credit shall be cancelled with immediate effect.

Fee for cancellation of an Accepted Tranche

(a) If pursuant to sub-paragraph (a) of Article 2.6 (Cancellation) the Borrower cancels an Accepted Tranche, the Borrower shall pay to the Bank the Cancellation Fee.

(b) If pursuant to sub-paragraph (b) of Article 2.6 (Cancellation) the Bank cancels all or part of an Accepted Tranche, the Borrower shall pay to the Bank the Cancellation Fee.

(c) If an Accepted Tranche is not disbursed on the Disbursement Date because the conditions precedent set out in Article 2.5.3 (All Tranches – Other Conditions) are not satisfied on such date, such Tranche shall be cancelled and the Borrower shall pay to the Bank the relevant Cancellation Fee.

Cancellation after expiry of the Credit

On the day following the Final Availability Date, and unless otherwise specifically agreed to in writing by the Bank, any part of the Credit in respect of which no Disbursement Acceptance has been received in accordance with Article 2.2.3 (Disbursement

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Acceptance) shall be automatically cancelled, without any notice being served by the Bank to the Borrower and no Cancellation Fee will apply.

Drop Dead Fee

(a) If no disbursement is made within [***] from the date of this Contract or in case the Credit is cancelled in full under Article 2.6 (Cancellation) prior to the expiry of this term, the Borrower shall pay to the Bank a one-off contractual fee equal to EUR [***] (the "Drop Dead Fee").

(b) The Drop Dead Fee shall be payable by the Borrower to the Bank within 15 (fifteen) days of the Borrower’s receipt of the Bank’s demand or within any longer period specified in the Bank’s demand.

(c) For the avoidance of doubt, the Drop Dead Fee payable under this Article 2.9 (Drop Dead Fee) is independent of any other fees stipulated in this Contract.

Sums due under Article 2

Sums due under Article 2.6 (Cancellation) shall be payable in EUR. Sums due under Article 2.6 (Cancellation) shall be payable within 15 (fifteen) days of the Borrower's receipt of the Bank's demand or within any longer period specified in the Bank's demand.

The Loan

Amount of Loan

The Loan shall comprise the aggregate amount of Tranches disbursed by the Bank under the Credit.

Currency of repayment, interest and other charges

(a) Interest, Additional Remuneration, repayments and other charges payable in respect of each Tranche shall be made by the Borrower in EUR.

(b) Any other payment shall be made in the currency specified by the Bank having regard to the currency of the expenditure to be reimbursed by means of that payment.

Interest

Fixed Rate Tranches

The Borrower shall pay interest on the outstanding balance of each Fixed Rate Tranche at the Fixed Rate annually in arrears on the relevant Payment Dates specified in the Disbursement Offer, and calculated on the basis of Article 6.1 (Day count convention). If the period from the Disbursement Date to the first Payment Date is 15 (fifteen) days or less then the payment of interest accrued during such period shall be postponed to the following Payment Date.

Deferred Interest Tranches

If a Deferred Interest Rate is specified in the Disbursement Offer in relation to a Deferred Interest Rate Tranche, interest shall accrue on the outstanding balance of such Tranche at the Deferred Interest Rate, and calculated on the basis of Article 6.1 (Day count convention), and such interest shall be due and payable on the Maturity Date of such

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Tranche or, where a Tranche is prepaid, on the Prepayment Date. For the avoidance of doubt, any such interest shall not be capitalised and shall not bear interest.

Additional Remuneration

In addition to the interest payable pursuant to Article 4.1 (Fixed Rate Tranches) and Article 4.2 (Deferred Interest Tranches) above, the Bank shall be entitled to receive any amounts due in connection with the Additional Remuneration with reference to each Tranche.

Interest on overdue sums

Without prejudice to Article 9 (Events of default) and by way of exception to Article 4.1 (Fixed Rate Tranches), if the Borrower fails to pay any amount payable by it under the Contract on its due date, interest shall accrue on any such overdue amount from the due date to the date of actual payment at an annual rate equal to:

(a) for overdue sums related to Fixed Rate and Deferred Interest Rate Tranches, the higher of (a) the applicable Fixed Rate or Deferred Interest Rate plus [***] or (b) EURIBOR plus [***];

(b) for overdue sums other than under sub-paragraph (a) of Article 4.4 (Interest on overdue sums) above, EURIBOR plus [***],

and shall be payable in accordance with the demand of the Bank. For the purpose of determining EURIBOR in relation to this Article 4.4 (Interest on overdue sums), the relevant periods within the meaning of Schedule B (Definition of EURIBOR) shall be successive periods of one month commencing on the due date.

If the overdue sum is in a currency other than the currency of the Loan, the relevant interbank rate that is generally retained by the Bank for transactions in that currency plus 2% (200 basis points) shall apply, calculated in accordance with the market practice for such rate.

Italian Usury Legislation

The Parties mutually acknowledge that the total remuneration applicable in respect of the Loan to the Borrower under this Contract (including the relevant component of any applicable fee and expense) determined as of the date of execution of this Contract is believed in good faith to be in compliance with Article 644 of the Italian criminal code and Italian Law No. 108 of 7 March 1996 as amended, implemented, supplemented or construed from time to time (the "Italian Usury Legislation"). In any event, notwithstanding any other provisions of this Contract, if, at any time, the rate of interest (together with any other remuneration – including any Additional Remuneration and any Additional Remuneration Buyout Fee, as applicable - and default rate of interest) in respect of the Loan to the Borrower is deemed to exceed the maximum rate permitted by the Italian Usury Legislation, then the interest rate applicable to the Loan shall be automatically reduced to the maximum admissible interest rate pursuant to the Italian Usury Legislation, for the period during which it is not possible to apply the interest rate as originally agreed in this Contract.

Repayment

Normal repayment

Repayment of Tranche A and Tranche B

The Borrower shall repay Tranche A and Tranche B, together with all other amounts outstanding under this Contract in relation to that Tranche, in a single instalment on the Maturity Date of that Tranche.

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Repayment of Tranche C and Tranche D

The Borrower shall repay Tranche C and Tranche D by equal annual instalments of principal together with all other amounts outstanding under this Contract in relation to that Tranches on the Repayment Dates specified in the relevant Disbursement Offer.

The first Repayment Date of Tranche C shall fall not earlier than 12 (twelve) months from the Disbursement Date of such Tranche.

The last Repayment Date of Tranche C and Tranche D shall fall not later than 5 (five) years from the Disbursement Date of Tranche C and Tranche D, respectively.

Voluntary prepayment

Prepayment option

(a) Subject to Articles 5.2.2 (Prepayment Fee) and 5.4 (General), the Borrower may prepay all or part of any Tranche, together with accrued interest (including any interest under Article 4.2 (Deferred Interest Tranches) and/or any Additional Remuneration, as specified under Article 4.3 (Additional Remuneration) and Schedule J (Additional Remuneration)), any Prepayment Fee and indemnities if any, upon giving a Prepayment Request with at least 60 (sixty) calendar days’ prior notice specifying:

(i) the Prepayment Amount;

(ii) if applicable, the choice of application method of the Prepayment Amount in line with sub-paragraph (a)(i) of Article 6.5.3 (Allocation of sums related to Tranches);

(iii) the Prepayment Date; and

(iv) each Contract Number.

(b) The Prepayment Request shall be irrevocable.

Prepayment Fee

If the Borrower prepays a Tranche, the Borrower shall pay the relevant Prepayment Fee on the Prepayment Date.

Prepayment mechanics

Upon presentation by the Borrower to the Bank of a Prepayment Request, the Bank shall issue a Prepayment Notice to the Borrower, not later than 15 (fifteen) days prior to the Prepayment Date. The Prepayment Notice shall specify the Prepayment Amount, the accrued interest due thereon, any Additional Remuneration, the Prepayment Fee and the method of application of the Prepayment Amount. If the Prepayment Notice specifies Prepayment Fee, it shall also specify the deadline by which the Borrower may accept the Prepayment Notice, and the Borrower must accept the Prepayment Notice no later than such deadline as a condition to prepayment.

The Borrower shall make a prepayment in accordance with the Prepayment Notice and shall accompany the prepayment by the payment of accrued interest (including any interest under Article 4.2 (Deferred Interest Tranches), any Additional Remuneration, as specified under Article 4.3 (Additional Remuneration) and Schedule J (Additional Remuneration) and Prepayment Fee or indemnity, if any, due on the Prepayment Amount, as specified in the Prepayment Notice, and shall identify each Contract Number in the prepayment transfer.

Compulsory prepayment

Cost Reduction

If the total cost of the Investment at completion by the final date specified in the Technical Description falls below the figure stated in Recital (A) so that the amount of the Credit exceeds 50% (fifty per cent) of such total cost, the Bank may forthwith, by notice to the Borrower, cancel the undisbursed portion of the Credit and/or demand

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prepayment of the Loan Outstanding up to the amount by which the Credit exceeds 50% (fifty per cent) of the total cost of the Investment.

Change Events

The Borrower and the Guarantor 2, as the case may be, shall promptly inform the Bank if:

(a) a Change-of-Control Event has occurred or is likely to occur in respect of itself or a Guarantor; or

(b) there is or is likely to be an enactment, promulgation, execution or ratification of or any change in or amendment to any law, rule or regulation (or in the application or official interpretation of any law, rule or regulation) that occurs or is likely to occur after the date of this Contract and which, in the opinion of the Borrower, would impair an Obligor's ability to perform its obligations under the Finance Documents; or

(c) a Senior Management Change has occurred or is likely to occur.

In such case, or if the Bank has reasonable cause to believe that a Change-of-Control Event, a Change-of-Law Event, a Senior Management Change has occurred or is likely to occur, the Borrower and the Guarantor 2, as the case may be, shall, on request of the Bank, consult with the Bank as to the impact of such event. If 30 (thirty) days have passed since the date of such request and the Bank is of the reasonable opinion that the effects of such event cannot be mitigated to its satisfaction, or in any event if a Change-of-Control Event, Change-of-Law Event, Senior Management Change the Bank may by notice to the Borrower, cancel the undisbursed portion of the Credit and/or demand prepayment of the Loan Outstanding, together with accrued interest and all other amounts accrued or outstanding under this Contract.

Illegality

If it becomes unlawful in any applicable jurisdiction for the Bank to perform any of its obligations as contemplated in this Contract or to fund or maintain the Loan, the Bank shall promptly notify the Borrower and may immediately cancel the undisbursed portion of the Credit and/or demand prepayment of the Loan Outstanding, together with accrued interest and all other amounts accrued or outstanding under this Contract.

Change in business

If the Borrower and the Guarantor 2 procures that a change is made to the general nature business of the Borrower or the Group as a whole from that described in the integrated business plan of the Group that the Guarantor 2 communicated to the Bank on 4 May 2023 - consisting of the development of Borrower’s technology, direct commercialization in the United States and via partner outside the United States - without the prior written consent of the Bank, the Bank shall promptly notify the Borrower and may immediately cancel the undisbursed portion of the Credit and/or demand prepayment of the Loan Outstanding, together with accrued interest and all other amounts accrued or outstanding under this Contract.

Disposals

If the Borrower, the Guarantors, and/or any Parent and/or any Group Company disposes of assets forming part of the Investment or shares in subsidiaries holding assets forming part of the Investment, without the approval of the Bank, the Borrower shall apply all proceeds of such disposal to prepay the Loan Outstanding (in part or in whole), together with accrued interest, promptly following receipt of such proceeds in accordance with sub-paragraph (b) of Paragraph 8 (Disposal of assets) of Schedule H (General Undertakings).

Breach of pari passu

If the payment obligations under this Contract rank less than pari passu in right of payment with any other present or future unsecured and unsubordinated obligations under any of the Non-EIB Financings except for obligations mandatorily preferred by law applying to companies generally, the Borrower shall promptly notify the Bank and

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the Bank may immediately cancel the undisbursed portion of the Credit and/or demand prepayment of the Loan Outstanding, together with accrued interest and all other amounts accrued or outstanding under this Contract.

Voluntary Additional Remuneration Event

If a Voluntary Additional Remuneration Event (as defined in Schedule J (Additional Remuneration)) occurs, the Borrower shall prepay a proportionate amount of the Loan Outstanding, together with accrued interest and all other amounts accrued or outstanding under this Contract.

Prepayment Fee

In the case of a Prepayment Event in relation to a Tranche, the Borrower shall pay the relevant Prepayment Fee.

Prepayment mechanics

Any sum demanded by the Bank pursuant to Articles 5.3.1 (Cost Reduction) to 5.3.4 (Change in business) shall be paid on the date indicated by the Bank in its notice of demand, such date being a date falling not less than 30 (thirty) days from the date of the demand (or, if earlier, the last day of any applicable grace period permitted by law in respect of the event in Article 5.3.3 (Illegality)).

General

(a) A repaid or prepaid amount may not be reborrowed.

(b) If the Borrower prepays a Tranche on a date other than a relevant Payment Date, or if the Bank exceptionally accepts, solely upon the Bank’s discretion, a Prepayment Request with prior notice of less than 30 (thirty) calendar days, the Borrower shall pay to the Bank an administrative fee in such an amount as the Bank shall notify to the Borrower.

Payments

Day count convention

Any amount due under this Contract and calculated in respect of a fraction of a year shall be determined based on a year of 360 (three hundred and sixty) days and a month of 30 (thirty) days.

Time and place of payment

(a) If neither this Contract nor the Bank's demand specifies a due date, all sums other than sums of interest, indemnity and principal are payable within 15 (fifteen) days of the Borrower's receipt of the Bank's demand.

(b) Each sum payable by the Borrower under this Contract shall be paid to the following account:

Bank:	[***]
City:	[***]
Account number:	[***]
SWIFT Code/BIC:	[***]
Remark:	[***]

or such other account notified by the Bank to the Borrower.

(c) The Borrower shall provide each Contract Number as a reference for each payment made under this Contract.

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(d) Any disbursements by and payments to the Bank under this Contract shall be made using account(s) acceptable to the Bank. Any account in the name of the Borrower held with a duly authorised financial institution in the jurisdiction where the Borrower is incorporated or where the Investment is undertaken is deemed acceptable to the Bank.

No set-off by the Borrower

All payments to be made by the Borrower under this Contract shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim.

Disruption to Payment Systems

If either the Bank determines (in its discretion) that a Disruption Event has occurred or the Bank is notified by the Borrower that a Disruption Event has occurred:

(a) the Bank may, and shall if requested to do so by the Borrower, consult with the Borrower with a view to agreeing with the Borrower such changes to the operation or administration of the Contract as the Bank may deem necessary in the circumstances;

(b) the Bank shall not be obliged to consult with the Borrower in relation to any changes mentioned in sub-paragraph (a) of Article 6.4 (Disruption to Payment Systems) above if, in its opinion, it is not practicable to do so in the circumstances and, in any event, shall have no obligation to agree to such changes; and

(c) the Bank shall not be liable for any damages, costs or losses whatsoever arising as a result of a Disruption Event or for taking or not taking any action pursuant to or in connection with this Article 6.4 (Disruption to Payment Systems).

Application of sums received

General

Sums received from the Borrower shall only discharge its payment obligations if and when received in accordance with the terms of this Contract.

Partial payments

If the Bank receives a payment that is insufficient to discharge all the amounts then due and payable by the Borrower under this Contract, the Bank shall apply that payment in or towards payment of:

(a) first, any unpaid fees, costs, indemnities and expenses due under this Contract;

(b) secondly, any accrued interest due but unpaid under this Contract;

(c) thirdly, any principal due but unpaid under this Contract; and

(d) fourthly, any other sum due but unpaid under this Contract.

Allocation of sums related to Tranches

(a) In case of:

(i) a partial voluntary prepayment of a Tranche that is subject to a repayment in several instalments, the Prepayment Amount shall be applied pro rata to each outstanding instalment, or, at the request of the Borrower, in inverse order of maturity,

(ii) a partial compulsory prepayment of a Tranche that is subject to a repayment in several instalments, the amount prepaid shall be applied in reduction of the outstanding instalments in inverse order of maturity.

(b) Sums received by the Bank following a demand under Article 9.1 (Right to demand repayment) and applied to a Tranche, shall reduce the outstanding instalments in inverse order of maturity. The Bank may apply sums received between Tranches at its discretion.

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(c) In case of receipt of sums which cannot be identified as applicable to a specific Tranche, and on which there is no agreement between the Bank and the Borrower on their application, the Bank may apply these between Tranches at its discretion.

Undertakings and representations

(a) Each of the Borrower, the Guarantor 1, the Guarantor 2, the Guarantor 3 and the Guarantor 4 hereby makes the relevant representations and warranties set out in Schedule G (Representations and Warranties) to the Bank on the date of this Contract in respect of itself and, in case of the Borrower, where applicable, the other Obligors.

(b) The Repeating Representations are deemed to be made by the Borrower and each of the Guarantor 1, the Guarantor 2, the Guarantor 3 and the Guarantor 4 (in respect of itself and in case of the Borrower, where applicable, the other Obligors) on the date of each Disbursement Acceptance, each Disbursement Date and each Payment Date by reference to the facts and circumstances then existing.

(c) The undertakings in Schedule H (General Undertakings) and Schedule I (Information and Visits) remain in force from the date of this Contract for so long as any amount is outstanding under this Contract or the Credit is available.

Charges and expenses

Taxes, duties and fees

The Borrower shall pay all Taxes, duties, fees and other impositions of whatsoever nature, including stamp duty and registration fees, arising out of the execution or implementation of each Finance Document or any related document and in the creation, perfection, registration or enforcement of any security for the Loan to the extent applicable.

The Borrower shall pay all principal, interest, indemnities and other amounts due under this Contract gross without any withholding or deduction of any national or local impositions whatsoever, provided that if the Borrower is required by law or an agreement with a governmental authority or otherwise to make any such withholding or deduction, it will gross up the payment to the Bank so that after withholding or deduction, the net amount received by the Bank is equivalent to the sum due.

Other charges

The Borrower shall bear all charges and expenses, including professional, banking or exchange charges incurred in connection with the preparation, execution, implementation, enforcement and termination of the Finance Documents (including, but not limited to, any Guarantee Agreement entered into pursuant to Paragraph 18 (Guarantees) of Schedule H (General Undertakings)) or any related document, any amendment, supplement or waiver in respect of the Finance Documents or any related document, and in the amendment, creation, management, enforcement and realisation of any security for the Loan.

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Increased costs, indemnity and set-off

(a) The Borrower shall pay to the Bank any costs or expenses incurred or suffered by the Bank as a consequence of the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation or compliance with any law or regulation which occurs after the date of this Contract, in accordance with or as a result of which (i) the Bank is obliged to incur additional costs in order to fund or perform its obligations under this Contract, or (ii) any amount owed to the Bank under this Contract or the financial income resulting from the granting of the Credit or the Loan by the Bank to the Borrower is reduced or eliminated.

(b) Without prejudice to any other rights of the Bank under this Contract or under any applicable law, the Borrower shall indemnify and hold the Bank harmless from and against any loss incurred as a result of any full or partial discharge that takes place in a manner other than as expressly set out in this Contract.

(c) The Bank may set off any matured obligation due from the Borrower under each Finance Document (to the extent beneficially owned by the Bank) against any obligation (whether or not matured) owed by the Bank to the Borrower regardless of the place of payment, booking branch or currency of either obligation. If the obligations are in different currencies, the Bank may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off. If either obligation is unliquidated or unascertained, the Bank may set off in an amount estimated by it in good faith to be the amount of that obligation.

Events of default

Right to demand repayment

The Bank may demand (in writing) without prior notice or any judicial or extra judicial step immediate repayment by the Borrower of all or part of the Loan Outstanding (as requested by the Bank), together with accrued interest, any Prepayment Fee and all other accrued or outstanding amounts under this Contract, if:

(a) any amount payable pursuant to any Finance Document is not paid on the due date at the place and in the currency in which it is expressed to be payable, unless (i) its failure to pay is caused by an administrative or technical error or a Disruption Event and (ii) payment is made within 3 (three) Business Days of its due date;

(b) any information or document given to the Bank by or on behalf of any Obligor or any representation, warranty or statement made or deemed to be made by the Borrower in any Finance Document, pursuant to any Finance Document or for the purposes of entering into any Finance Document is or proves to have been incorrect, incomplete or misleading in any material respect;

(c) following any default of any Obligor in relation to any loan, or any obligation arising out of any financial transaction, other than the Loan,

(i) such Obligor is required or is capable of being required or will, following expiry of any applicable contractual grace period, be required or be capable of being required to prepay, discharge, close out or terminate ahead of maturity such other loan or obligation; or

(ii) any financial commitment for such other loan or obligation is cancelled or suspended; and

(d) any Obligor is unable to pay its debts as they fall due, or suspends its debts, or makes or seeks to make a composition with its creditors including a moratorium, or commences negotiations with one or more of its creditors with a view to rescheduling any of its financial indebtedness;

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(e) any corporate action, legal proceedings or other procedure or step is taken in relation to the suspension of payments, a moratorium of any indebtedness, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) or an order is made or an effective resolution is passed for the winding up of any Obligor, a reduction of the corporate capital has occurred in respect to any Obligor pursuant to article 2447 of the Italian Civil Code(or, with respect to any Obligor incorporated in the form of società a responsabilità limitata, pursuant to article 2482-ter of the Italian Civil Code) or if any Obligor takes steps towards a substantial reduction in its capital, is declared insolvent or ceases or resolves to cease to carry on the whole or any substantial part of its business or activities or any situation similar to any of the above occurs under any applicable law;

(f) an encumbrancer takes possession of, or a receiver, liquidator, administrator, administrative receiver or similar officer is appointed, whether by a court of competent jurisdiction or by any competent administrative authority or by any person, of or over, any part of the business or assets of any Obligor or any property forming part of the Investment;

(g) any Obligor defaults in the performance of any obligation in respect of any other loan granted by the Bank or financial instrument entered into with the Bank;

(h) any Obligor defaults in the performance of any obligation in respect of any other loan made to it from the resources of the Bank or the European Union;

(i) any distress, execution, sequestration or other process is levied or enforced upon the property of any Obligor or any property forming part of the Investment and is not discharged or stayed within 14 (fourteen) days;

(j) a Material Adverse Change occurs, as compared with the position at the date of this Contract;

(k) it is or becomes unlawful for any Obligor to perform any of its obligations under the Finance Documents, or the Finance Documents are not effective in accordance with its terms or is alleged by any Obligor to be ineffective in accordance with its terms; or

(l) any Obligor fails to comply with any other provision under the Finance Documents (including, without limitation, each of the undertakings in Schedule H (General Undertakings) and Schedule I (Information and Visits)), unless the non-compliance or circumstance giving rise to the non-compliance is capable of remedy and is remedied within 20 (twenty) Business Days from the earlier of the Borrower becoming aware of the non-compliance and a notice served by the Bank on the Borrower.

Other rights at law

Article 9.1 (Right to demand repayment) shall not restrict any other right of the Bank at law to require prepayment of the Loan Outstanding.

Prepayment Fee

In case of demand under Article 9.1 (Right to demand repayment), the Borrower shall pay the Bank the amount demanded together with the relevant Prepayment Fee.

Non-Waiver

No failure or delay or single or partial exercise by the Bank in exercising any of its rights or remedies under this Contract shall be construed as a waiver of such right or remedy. The rights and remedies provided in this Contract are cumulative and not exclusive of any rights or remedies provided by law.

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Law and jurisdiction, miscellaneous

Governing Law

This Contract and any non-contractual obligations arising out of or in connection with it shall be governed by Italian law.

Jurisdiction

(a) The courts of Milan have exclusive jurisdiction to settle any dispute (a "Dispute") arising out of or in connection with this Contract (including a dispute regarding the existence, validity or termination of this Contract or the consequences of its nullity) or any non-contractual obligation arising out of or in connection with this Contract.

(b) The parties agree that the courts of Milan are the most appropriate and convenient courts to settle Disputes between them and, accordingly, that they will not argue to the contrary.

Place of performance

Unless otherwise specifically agreed by the Bank in writing, the place of performance under this Contract, shall be the seat of the Bank.

Evidence of sums due

In any legal action arising out of this Contract the certificate of the Bank as to any amount or rate due to the Bank under this Contract shall, in the absence of manifest error, be prima facie evidence of such amount or rate.

Entire Agreement

This Contract constitutes the entire agreement between the Bank, the Borrower, the Guarantor 1, the Guarantor 2, the Guarantor 3 and the Guarantor 4 in relation to the provision of the Credit hereunder, and supersedes any previous agreement, whether express or implied, on the same matter.

Invalidity

If at any time any term of this Contract is or becomes illegal, invalid or unenforceable in any respect, or this Contract is or becomes ineffective in any respect, under the laws of any jurisdiction, such illegality, invalidity, unenforceability or ineffectiveness shall not affect:

(a) the legality, validity or enforceability in that jurisdiction of any other term of this Contract or the effectiveness in any other respect of this Contract in that jurisdiction; or

(b) the legality, validity or enforceability in other jurisdictions of that or any other term of this Contract or the effectiveness of this Contract under the laws of such other jurisdictions.

Amendments

Any amendment to this Contract shall be made in writing and shall be signed by the parties hereto.

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Assignment and transfer by the Bank

(a) Subject to sub-paragraph (b) of this Article 10.8 (Assignment and transfer by the Bank), the consent of the Borrower, the Guarantor 1, the Guarantor 2, the Guarantor 3 and the Guarantor 4 is required for an assignment or transfer (by way of novation, sub-participation or otherwise) by the Bank of all or part of its rights, benefits or obligations under the Finance Documents, unless the assignment or transfer:

(i) is to a Bank Affiliate; or

(ii) is made at a time when an Event of Default has occurred and is continuing; or

(iii) is made in respect of a sub-participation or securitisation (or similar transaction of broadly equivalent economic effect) where the Bank remains the lender of record of the Loan.

(b) The consent of the Borrower, the Guarantor 1, the Guarantor 2, the Guarantor 3 and/or the Guarantor 4 to an assignment or transfer must not be unreasonably withheld or delayed. The Borrower will be deemed to have given its consent 10 (ten) Business Days after the Bank has requested it unless consent is expressly refused by the Borrower, the Guarantor 1, the Guarantor 2, the Guarantor 3 and/or the Guarantor 4 within that time.

(c) The Bank shall have the right to disclose all information relating to or concerning the Borrower, the Guarantor 1, the Guarantor 2, the Guarantor 3, the Guarantor 4, the Group, the Finance Documents and the Loan in connection with or in contemplation of any such assignment or transfer.

For the purpose of this Article 10.8 (Assignment and transfer by the Bank):

“Affiliate” means any entity directly or indirectly Controlling, Controlled by or under common Control with the Bank.

“Bank Affiliate” means an Affiliate of the Bank and any other entity or platform initiated, managed or advised by the Bank.

“Control” means with respect to a given entity, the power to:

(a) cast, or control the casting of, votes corresponding to more than 50% of the issued voting share capital of that entity; or

(b) appoint or remove all, or the majority, of the directors or other equivalent officers of that entity; or

(c) give directions with respect to the operating and financial policies of that entity with which the directors or other equivalent officers of such entity are obliged to comply;

and “Controlling” and “Controlled” have corresponding meanings.

Negotiations

Each Party hereby acknowledges and confirms that:

(a) it has appointed and has been assisted by its respective legal counsel in connection with the negotiation, preparation and execution of the Finance Documents; and

(b) this Contract and any Finance Document, and all of its terms and conditions, including the Recitals and the Schedules thereto, have been specifically negotiated (“oggetto di trattativa individuale”) between the Parties.

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Final Articles

Notices

Form of notice

(a) Any notice or other communication given under this Contract must be in writing and, unless otherwise stated, may be made by letter and electronic mail.

(b) Notices and other communications for which fixed periods are laid down in this Contract or which themselves fix periods binding on the addressee, may be made by hand delivery, registered letter or by electronic mail. Such notices and communications shall be deemed to have been received by the other party:

(i) on the date of delivery in relation to a hand-delivered or registered letter;

(ii) in the case of any electronic mail sent by the Borrower, the Guarantor 1, the Guarantor 2, the Guarantor 3 and/or the Guarantor 4 to the Bank, only when actually received in readable form and only if it is addressed in such a manner as the Bank shall specify for this purpose, or

(iii) in the case of any electronic mail sent by the Bank to the Borrower, the Guarantor 1, the Guarantor 2, the Guarantor 3 and/or the Guarantor 4 when the electronic mail is sent.

(c) Any notice provided by the Borrower, the Guarantor 1, the Guarantor 2, the Guarantor 3 and/or the Guarantor 4 to the Bank by electronic mail shall:

(i) mention each Contract Number in the subject line; and

(ii) be in the form of a non-editable electronic image (pdf, tif or other common non-editable file format agreed between the parties) of the notice signed by one or more Authorised Signatories of the Borrower, the Guarantor 1, the Guarantor 2, the Guarantor 3 and/or the Guarantor 4 as appropriate, attached to the electronic mail.

(d) Notices issued by the Borrower, the Guarantor 1, the Guarantor 2, the Guarantor 3 and/or the Guarantor 4 pursuant to any provision of this Contract shall, where required by the Bank, be delivered to the Bank together with satisfactory evidence of the authority of the person or persons authorised to sign such notice on behalf of the Borrower the Guarantor 1, the Guarantor 2, the Guarantor 3 and/or the Guarantor 4 and the authenticated specimen signature of such person or persons.

(e) Without affecting the validity of electronic mail or communication made in accordance with this Article 11.1 (Notices), the following notices, communications and documents shall also be sent by registered letter to the relevant party at the latest on the immediately following Business Day:

(i) Disbursement Acceptance;

(ii) any notices and communication in respect of the cancellation of a disbursement of any Tranche, Prepayment Request, Prepayment Notice, Event of Default, any demand for prepayment, and

(iii) any other notice, communication or document required by the Bank.

(f) The parties agree that any above communication (including via electronic mail) is an accepted form of communication, shall constitute admissible evidence in court and shall have the same evidential value as an agreement under hand.

Addresses

The address and electronic mail address (and the department or officer, if any, for whose attention the communication is to be made) of each party for any communication to be made or document to be delivered under or in connection with this Contract is:

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For the Bank	Attention: OPS/ENPST/3-GC&IF 100 boulevard Konrad Adenauer L-2950 Luxembourg Email address [***]
For the Borrower	Attention: Chief Executive Officer 3, Via Meucci, Bresso (MI), 20091, Italy E-mail address: [***]
For the Guarantor 1	Attention: Chief Business Officer 601 Gateway Blvd. Suite 1250 South San Francisco, CA 94080 Delaware, USA incorporation E-mail address: [***]
For the Guarantor 2	Attention: Chief Business Officer 601 Gateway Blvd. Suite 1250 South San Francisco, CA 94080 Delaware, USA incorporation E-mail address: [***]
For the Guarantor 3	Attention: Chief Business Officer 601 Gateway Blvd. Suite 1250 South San Francisco, CA 94080 Delaware, USA incorporation E-mail address: [***]
For the Guarantor 4	Attention: Chief Business Officer 601 Gateway Blvd. Suite 1250 South San Francisco, CA 94080 Delaware, USA incorporation E-mail address: [***]

Demand after notice to remedy

The Bank, the Borrower, the Guarantor 1, the Guarantor 2, the Guarantor 3 and the Guarantor 4 shall promptly notify the other party in writing of any change in their respective communication details.

English language

(a) Any notice or communication given under or in connection with this Contract must be in English.

(b) All other documents provided under or in connection with this Contract must be:

(i) in English; or

(ii) if not in English, and if so required by the Bank, accompanied by a certified English translation and, in this case, the English translation will prevail.

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Schedule A

Investment Specification and Reporting

A.1 Technical Description

The project supports the Borrower's research and development ("R&D") investments to develop innovative treatments for rare diseases. The 4 year-investment plan relates to the late stage clinical development of EryDex (completion of the Phase III and regulatory approval) in AT as well as label extensions and expended access programs and a paediatric investigational plan for Erydex. The project will be coordinated from the headquarters of Guarantor 2 located in San Francisco, USA and the Borrower’s headquarters located in Bresso, Italy. The project costs during the four-year period from 2020 to December 2023 are estimated at EUR 64,000,000 (sixty four million euro).

A.2 Information Duties

Despatch of information: designation of the person responsible

The information below has to be sent to the Bank under the responsibility of:

	Financial & Technical Contact
Company	EryDel S.p.A.
Contact person	Brendan Hannah
Title	Quince Therapeutics Chief Business Officer; EryDel S.p.A. Board Director
Address	Via Meucci 3 – Bresso (Milan) – Italy
Phone	[***]
Email	[***]

The above-mentioned contact person is the responsible contact for the time being. The Borrower shall inform the Bank immediately in case of any change.

Information on the project’s implementation

The Borrower shall deliver to the Bank the following information on project progress during implementation of the project.

Document / information	Deadline	Frequency of reporting
Project Progress Report, including: - A brief update on the company's strategy and development, explaining the reasons for significant changes vs. initial scope; - A general update on targeted-markets situation, trends and Borrower's	30/09/2021 30/09/2022 30/09/2023	Annually

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positioning, with a focus on competitive landscape and changes impacting the market potential of Erydel’s products;

- Update on the cost of the project, explaining reasons for any possible and major cost variations vs. initial budgeted cost (see table above);

- Update on the progress made with the Investment plan and reasons for significant changes vs. initial scope (if any);

- Update on other R&D activities not included in the Investment plan;

- Update on any major changes in the Borrower and R&D and manufacturing organisations, with potential impact on the completion of the project;

- Update on the headcount evolution of the Borrower;

- Brief update on the IP portfolio, in-licensing agreements, commercial agreements or collaborations with public research institutions;

- Brief update on funding made available from public sources (e.g., grants, etc.);

- Any significant issue that has occurred and any significant (market, technical, financial, etc.) risk that may affect the project's operation;

- A description of any major issue with impact on the environment;

- Any legal action concerning the project that may be ongoing.

Information on the end of works and first year of operation

The Borrower shall deliver to the Bank the following information on project completion and initial operation at the latest by the deadline indicated below:

Document / information Date of delivery to the Bank

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Project Completion Report, including: - A final Technical Description of the project as completed, explaining the reasons for any significant change compared to the Technical Description in Schedule A; - Non-confidential Borrower and project-related information, if available (press-releases, analyst reports, etc.); - The final cost of the project, explaining reasons for any possible major cost variations vs. initial budgeted cost; - Update on other R&D developments not included in the project; - Employment effects of the project: overview of the FTEs; - Overview of new positions created; - Overview of the R&D as well as the manufacturing organizations; - A description of any major issues with environmental or social impacts; - Number of national/international patent applications; - Total revenues generated by the projects; - Overview of all current partnerships / collaboration and commercialisation agreements; - Overview on funding used in the context of the project made available from public sources (e.g., grants, etc.); - Any significant issue that has occurred and any significant risk that may affect the project's operation; - Any legal action concerning the project that may be ongoing. 30/09/2024

Language of reports English

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Schedule B

Definition of EURIBOR

"EURIBOR" means:

(a) in respect of a relevant period of less than one month, the Screen Rate (as defined below) for a term of one month;

(b) in respect of a relevant period of one or more months for which a Screen Rate is available, the applicable Screen Rate for a term for the corresponding number of months; and

(c) in respect of a relevant period of more than one month for which a Screen Rate is not available, the rate resulting from a linear interpolation by reference to two Screen Rates, one of which is applicable for a period next shorter and the other for a period next longer than the length of the relevant period,

(the period for which the rate is taken or from which the rates are interpolated being the "Representative Period").

For the purposes of paragraphs (b) and (c) above:

(i) "available" means the rates, for given maturities, that are calculated and published by Global Rate Set Systems Ltd (GRSS), or such other service provider selected by the European Money Markets Institute (EMMI), or any successor to that function of EMMI, as determined by the Bank; and

(ii) "Screen Rate" means the rate of interest for deposits in EUR for the relevant period as published at 11h00, Brussels time, or at a later time acceptable to the Bank on the day (the "Reset Date") which falls 2 (two) Relevant Business Days prior to the first day of the relevant period, on Reuters page EURIBOR 01 or its successor page or, failing which, by any other means of publication chosen for this purpose by the Bank.

If such Screen Rate is not so published, the Bank shall request the principal offices of four major banks in the euro-zone, selected by the Bank, to quote the rate at which EUR deposits in a comparable amount are offered by each of them, as at approximately 11h00, Brussels time on the Reset Date to prime banks in the euro-zone interbank market for a period equal to the Representative Period. If at least 2 (two) quotations are provided, the rate for that Reset Date will be the arithmetic mean of the quotations. If no sufficient quotations are provided as requested, the rate for that Reset Date will be the arithmetic mean of the rates quoted by major banks in the euro-zone, selected by the Bank, at approximately 11h00, Brussels time, on the day which falls 2 (two) Relevant Business Days after the Reset Date, for loans in EUR in a comparable amount to leading European banks for a period equal to the Representative Period. The Bank shall inform the Borrower without delay of the quotations received by the Bank.

All percentages resulting from any calculations referred to in this Schedule will be rounded, if necessary, to the nearest one thousandth of a percentage point, with halves being rounded up.

If any of the foregoing provisions becomes inconsistent with provisions adopted under the aegis of EMMI (or any successor to that function of EMMI as determined by the Bank) in respect of EURIBOR, the Bank may by notice to the Borrower amend the provision to bring it into line with such other provisions.

If the Screen rate becomes permanently unavailable, the Euribor replacement rate will be the rate (inclusive of any spreads or adjustments) formally recommended by (i) the working group on euro risk-free rates established by the European Central Bank (ECB), the Financial Services and Markets Authority (FSMA), the European Securities and Markets Authority (ESMA) and the European Commission, or (ii) the European Money Market Institute, as the administrator of EURIBOR, or (iii) the competent authority responsible under Regulation (EU) 2016/1011 for supervising the European Money

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Market Institute, as the administrator of the EURIBOR, or (iv) the national competent authorities designated under Regulation (EU) 2016/1011, or (v) the European Central Bank.

If no Screen Rate and/or the Euribor replacement rate is available as provided above, EURIBOR shall be the rate (expressed as a percentage rate per annum) which is determined by the Bank to be the all-inclusive cost to the Bank for the funding of the relevant Tranche based upon the then applicable internally generated Bank reference rate or an alternative rate determination method reasonably determined by the Bank.

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Schedule C

Form of Disbursement Offer/Acceptance

To: Erydel S.p.A.

From: European Investment Bank

Date:

Subject: Disbursement Offer/Acceptance for the Finance Contract between European Investment Bank and Erydel S.p.A. dated [*** insert date of signature (date of the proposal and date of acceptance) ***] (the "Finance Contract")

Contract Number 91932 and 92599

Serapis Number 2020-0006

Dear Sirs,

We refer to the Finance Contract. Terms defined in the Finance Contract have the same meaning when used in this letter.

Following your request for a Disbursement Offer from the Bank, in accordance with Article 2.2.2 (Disbursement Offer) of the Finance Contract, we hereby offer to make available to you the following Tranche:

(a) Tranche [A/B/C/D]

(b) Amount to be disbursed:

(c) Disbursement Date:

(d) Interest rate basis:

(e) [For Tranches A and B] Deferred Interest Rate:

(f) [For Tranches C and D] Fixed Rate:

(g) Payment Dates and interest periods:

(h) Terms and frequency for repayment of principal:

(i) First Repayment Date and Maturity Date:

(j) Additional Remuneration:

To make the Tranche available subject to the terms and conditions of the Finance Contract, the Bank must receive a Disbursement Acceptance in the form of a copy of this Disbursement Offer duly signed on your behalf, to the following electronic mail [] no later than the Disbursement Acceptance Deadline of [time], Luxembourg time, on [date].

The Disbursement Acceptance below must be signed by an Authorised Signatory and must be fully completed as indicated, to include the details of the Disbursement Account.

If not duly accepted by the above stated time, the offer contained in this document shall be deemed to have been refused and shall automatically lapse.

If you do accept the Tranche as described in this Disbursement Offer, all the related terms and conditions of the Finance Contract shall apply, in particular, the provisions of Article 2.5 (Conditions of Disbursement).

Yours faithfully,

EUROPEAN INVESTMENT BANK

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We hereby accept the above Disbursement Offer for and on behalf of the Borrower:

__________________________________________

Date:

Account to be credited:

Account N°:

Account Holder/Beneficiary:

(please, provide IBAN format if the country is included in IBAN Registry published by SWIFT, otherwise an appropriate format in line with the local banking practice should be provided)

Bank name, identification code (BIC) and address:

Payment details to be provided:

Please transmit information relevant to:

Name(s) of the Borrower's Authorised Signatory(ies):

………………………………………………………..………………………………………………..

Signature(s) of the Borrower’s Authorised Signatory(ies):

IMPORTANT NOTICE TO THE BORROWER:

BY COUNTERSIGNING ABOVE YOU CONFIRM THAT THE LIST OF AUTHORISED SIGNATORIES AND ACCOUNTS PROVIDED TO THE BANK WAS DULY UPDATED PRIOR TO THE PRESENTATION OF THE ABOVE DISBURSEMENT OFFER BY THE BANK.

IN THE EVENT THAT ANY SIGNATORIES OR ACCOUNTS APPEARING IN THIS DISBURSEMENT ACCEPTANCE ARE NOT INCLUDED IN THE LATEST LIST OF AUTHORISED SIGNATORIES AND ACCOUNTS RECEIVED BY THE BANK, THE ABOVE DISBURSEMENT OFFER SHALL BE DEEMED AS NOT HAVING BEEN MADE.

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Schedule D

Form of Drawdown Certificate

To: European Investment Bank

From: Erydel S.p.A.

Date:

Subject: Finance Contract between European Investment Bank and Erydel S.p.A. dated [*** insert date of signature (date of the proposal and date of acceptance) ***] (the "Finance Contract")

Contract Number 91932 and 92599 Serapis Number 2020-0006

Dear Sirs,

Terms defined in the Finance Contract have the same meaning when used in this letter.

For the purposes of Article 2.5 (Conditions of Disbursement) of the Finance Contract we hereby certify to you as follows:

(a) no Prepayment Event has occurred and is continuing unremedied;

(b) no security of the type prohibited under Paragraph 25 (Negative pledge) of Schedule H (General Undertakings) has been created or is in existence;

(c) there has been no material change to any aspect of the Investment or in respect of which we are obliged to report under the Finance Contract, save as previously communicated by us;

(d) no Default, Event of Default or a Prepayment Event other than pursuant to Article 5.3.1 (Cost Reduction) of the Finance Contract has occurred or is continuing, or would, in each case, result from the disbursement of the proposed Tranche;

(e) no litigation, arbitration administrative proceedings or investigation is current or to our knowledge is threatened or pending before any court, arbitral body or agency which has resulted or if adversely determined is reasonably likely to result in a Material Adverse Change, nor is there subsisting against us or any of our subsidiaries any unsatisfied judgement or award;

(f) the Repeating Representations are correct in all respects;

(g) no Material Adverse Change has occurred, as compared with the situation at the date of the Finance Contract; and

(h) the borrowing of the Credit, or any part thereof, by the Borrower is within the corporate powers of the Borrower.

Yours faithfully,

For and on behalf of Erydel S.p.A.

Date:

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Schedule E

Form of Compliance Certificate

To: European Investment Bank

From: Erydel S.p.A.

Date:

Subject: Finance Contract between European Investment Bank and Erydel S.p.A. dated [*** insert date of signature ***] (the "Finance Contract")

Contract Number 91932 and 92599 Serapis Number 2020-0006

Dear Sirs,

We refer to the Finance Contract. This is a Compliance Certificate. Terms defined in the Finance Contract have the same meaning when used in this Compliance Certificate.

We hereby confirm:

(a) [insert information regarding asset disposal];

(b) [insert other information and calculation details of the Additional Remuneration to be paid on the next Additional Remuneration Payment Date (as defined in Schedule J – Additional Remuneration – below)];

(c) [no security of the type prohibited under Paragraph 25 (Negative pledge) of Schedule H (General Undertakings) has been created or is in existence;]

(d) [no Default, Event of Default or a Prepayment Event other than pursuant to Article 5.3.1 (Cost Reduction) of the Finance Contract has occurred or is continuing.] [If this statement cannot be made, this certificate should identify any potential event of default that is continuing and the steps, if any, being taken to remedy it].

Yours faithfully,

For and on behalf of Erydel S.p.A.

[director] [director]

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Schedule F

Initial Documentary Conditions Precedent

(a) The duly executed Finance Documents.

(b) The constitutional documents of each Obligor.

(c) A copy of the resolution of the competent body (board of directors or general meeting of shareholders) of each Obligor duly authorising the execution of the Finance Documents to which it is a party and duly authorising the relevant signatories.

(d) The List of Authorised Signatories and Accounts.

(e) A legal opinion of Gianni, Origoni, Grippo, Cappelli & Partners Law Firm, addressed to the Bank on the legality, validity and enforceability of the Finance Documents.

(f) A legal opinion of Avv. Luca Garibaldi (Lexage), legal adviser to the Borrower, addressed to the Bank, and dated no earlier than the date falling 14 (fourteen) days before the Disbursement Date:

(i) which includes an insolvency search on the relevant Obligor conducted on the date of such legal opinion; and

(ii) on the due incorporation, valid existence and good standing of each Obligor, the authority and capacity of each Obligor to enter into the Finance Documents and perform its obligations thereunder, non-conflict with constitutional documents and on laws applicable to companies generally in the Republic of Italy, no consents, registrations or filings are required and no stamp duty is to be paid in respect of the Finance Documents, all corporate and other action required to be taken has indeed been taken, the due execution of the Finance Documents, choice of law and enforceability of judgments and that the Obligor is not entitled to claim immunity.

(g) The latest audited financial statements of the Obligors.

(h) Evidence of payment of all the fees and expenses as required under the Finance Documents.

(i) A copy of any other document, authorisation, opinion or assurance which the Bank has notified the Borrower is necessary or desirable in connection with the entry into and performance of, and the transactions contemplated by, the Finance Documents or the validity and enforceability of the same.

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Schedule G

Representations and Warranties

1. Authorisations and Binding Obligations

(a) Each Obligor is duly incorporated and validly existing under the laws of its jurisdiction of incorporation. No Obligor’s shares are publicly traded save for Quince Therapeutics, Inc..

(b) Each Obligor has the power to carry on its business as it is now being conducted and to own its property and other assets, and to execute, deliver and perform its obligations under the Finance Documents.

(c) Each Obligor has obtained all necessary Authorisations in connection with the execution, delivery and performance of the Finance Documents and in order to lawfully comply with its obligations thereunder, and in respect of the Investment, and all such Authorisations are in full force and effect and admissible in evidence.

(d) The execution and delivery of, the performance of each Obligor’s obligations under and compliance with the provisions of the Finance Documents do not and will not contravene or conflict with:

(i) any applicable law, statute, rule or regulation, or any judgement, decree or permit to which it is subject;

(ii) any agreement or other instrument binding upon it which might reasonably be expected to have a material adverse effect on its ability to perform its obligations under the Finance Documents; or

(iii) any provision of its constitutional documents.

(e) The obligations expressed to be assumed by each Obligor in each Finance Document to which it is a party are legal, valid, binding and enforceable obligations.

2. No default or other adverse event

(a) There has been no Material Adverse Change since 9 July 2020.

(b) The Borrower and the Guarantors represent that there has been no Material Adverse Change since 4 May 2023.

(c) No event or circumstance which constitutes an Event of Default has occurred and is continuing unremedied or unwaived.

3. No proceedings

(a) No litigation, arbitration, administrative proceedings or investigation is current or to its knowledge is threatened or pending before any court, arbitral body or agency which has resulted or if adversely determined is reasonably likely to result in a Material Adverse Change, nor is there subsisting against it or any of its Subsidiaries any unsatisfied judgement or award.

(b) To the best of its knowledge and belief (having made due and careful enquiry) no material Environmental Claim has been commenced or is threatened against any Obligor.

(c) As at the date of this Contract, no Obligor has taken any action to commence proceedings for, nor have any other steps been taken or legal proceedings commenced or, so far as the Borrower, the Guarantor 1, the Guarantor 2, the Guarantor 3 and the Guarantor 4, as applicable, is aware, threatened against any Obligor for its insolvency, winding up or dissolution, or for any Obligor to enter into any arrangement or compositions for the benefit of creditors, or for the appointment of an administrator, receiver, administrative receiver, examiner, trustee or similar officer.

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4. Security

At the date of this Contract, no Security exists over the assets of any Group Company.

5. Ranking

(a) Its payment obligations under this Contract rank not less than pari passu in right of payment with all other present and future unsecured and unsubordinated obligations under any of its debt instruments except for obligations mandatorily preferred by law applying to companies generally.

(b) No financial covenants have been concluded with any other creditor of any Obligor.

(c) No Voluntary Non EIB Prepayment has occurred.

6. Anti-Corruption

(a) Each Obligor is in compliance with all applicable European Union and national legislation, including any applicable anti-corruption legislation.

(b) To the best of its knowledge, no funds invested in the Investment by any Obligor or any other Group Company are of illicit origin, including products of money laundering or linked to the financing of terrorism.

(c) No Obligor is engaged in any Illegal Activities and to the best of the Borrower’s, the Guarantor’s 1, the Guarantor’s 2, the Guarantor’s 3 or the Guarantor’s 4, as applicable, knowledge no Illegal Activities have occurred in connection with the Investment. (Non-repeating)

7. Accounting and Tax

(a) The latest available consolidated and unconsolidated audited accounts of the Borrower and the other Obligors have been prepared on a basis consistent with previous years and have been approved by their auditors as representing a true and fair view of the results of their operations for that year and accurately disclose or reserve against all the liabilities (actual or contingent) of the Borrower and the other Obligors, as applicable.

(b) The accounting reference date of the Borrower is 31 December.

(c) No Obligor required to make any deduction for or on account of any Tax from any payment it may make under the Finance Documents. (Non-repeating)

(d) All Tax returns required to have been filed by each Obligor or on its behalf under any applicable law have been filed when due and contain the information required by applicable law to be contained in them.

(e) Each Obligor has paid when due all Taxes payable by it under applicable law except to the extent that it is contesting payment in good faith and by appropriate means.

(f) With respect to Taxes which have not fallen due or which it is contesting, each Obligor is maintaining reserves adequate for their payment and in accordance, where applicable, with US GAAP.

(g) Under the laws of the jurisdiction of incorporation of each Obligor, it is not necessary that the Finance Documents be filed, recorded or enrolled with any court or other authority or that any stamp, registration or similar tax be paid on or in relation to the Finance Documents, or the transactions contemplated by the Finance Documents. (Non-repeating).

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8. Information provided

(a) Any factual information provided by any Group Company for the purposes of entering into this Contract and any related documentation was true and accurate in all material respects as at the date it was provided or as at the date (if any) at which it is stated and continues to be true and accurate in all material respect as at the date of this Contract.

(b) The Group structure chart is true, complete and accurate in all material respects and represents the complete corporate structure of the Group as at the date of this Contract, and other than as set out therein the Borrower owns no other equity and/or shares in any other business entity. (Non-repeating)

(c) As at the date of this Contract, (i) information provided by the Borrower under the EFSI Application Form is complete, accurate and true in all respects; and (ii) the Borrower (and the Group as a whole where relevant) complies with the eligibility and exclusion criteria set out in the Horizon 2020 Framework EU Programme to be the beneficiary of the Credit as such criteria are listed in the EFSI Application Form. (Non-repeating)

9. No indebtedness

No Obligor has Indebtedness outstanding other than Permitted Indebtedness. (Non-repeating).

10. No Immunity

No Obligor, nor any of its assets, is entitled to immunity from suit, execution, attachment or other legal process.

11. Pensions

The pension schemes for the time being operated by the Obligors (if any) are funded in accordance with their rules and to the extent required by law or otherwise comply with the requirements of any law applicable in the jurisdiction in which the relevant pension scheme is maintained.

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Schedule H

General Undertakings

1. Use of Loan

The Borrower shall use all amounts borrowed by it under the Loan to carry out the Investment.

2. Completion of Investment

The Borrower shall or shall procure that the Investment is carried out in accordance with the Technical Description as may be modified from time to time with the approval of the Bank, and complete it by the final date specified therein.

3. Procurement procedure

The Borrower shall secure goods and services for the Investment (a) in so far as they apply to it or to the Investment, in accordance with EU Law in general and in particular with the relevant EU Directives, and (b) in so far as EU Directives do not apply, by procurement procedures which, to the satisfaction of the Bank, respect the criteria of economy and efficiency and, in case of public contracts, the principles of transparency, equal treatment and non-discrimination on the basis of nationality.

4. Compliance with laws

Each Obligor shall comply in all respects with all laws and regulations to which it or the Investment is subject.

5. Environment

The Borrower shall:

(i) implement and operate the Investment in compliance with Environmental Law;

(ii) obtain, maintain and comply with requisite Environmental Approvals for the Investment,

and upon becoming aware of any breach of this Paragraph 5 (Environment):

(i) the Borrower shall promptly notify the Bank;

(ii) the Borrower and the Bank will consult for up to 15 (fifteen) Business Days from the date of notification with a view to agreeing the manner in which the breach should be rectified; and

(iii) the Borrower shall remedy the breach within 30 (thirty) Business Days of the end of the consultation period.

6. Integrity

The Borrower shall take, within a reasonable timeframe, appropriate measures in respect of any member of its management bodies who has been convicted by a final and irrevocable court ruling of a Illegal Activity perpetrated in the course of the exercise of his/her professional duties, in order to ensure that such member is excluded from any Borrower's activity in relation to the Loan or the Investment.

7. Integrity Audit Rights

The Borrower shall ensure that all contracts under the Investment to be procured after the date of this Contract in accordance with EU Directives on procurement provide for:

(a) the requirement that the relevant contractor promptly informs the Bank of a genuine allegation, complaint or information with regard to Illegal Activities related to the Investment;

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(b) the requirement that the relevant contractor keeps books and records of all financial transactions and expenditures in connection with the Investment; and

(c) the Bank’s right, in relation to an alleged Illegal Activity, to review the books and records of the relevant contractor in relation to the Investment and to take copies of documents to the extent permitted by law.

8. Disposal of assets

(a) Except as provided below, the Borrower, the Guarantor 2 and/or any Parent, as applicable shall not, and shall procure that no Group Company shall, either in a single transaction or in a series of transactions whether related or not and whether voluntarily or involuntarily dispose of all or any part of any Group Company's business, undertaking or assets (including any shares or security of any entity or a business or undertaking, or any interest in any of them).

(b) Sub-paragraph (a) above does not apply to any such disposal:

(i) made with the prior written consent of the Bank;

(ii) made on arm's length terms in the ordinary course of business of a Group Company;

(iii) made on arm's length terms and at fair market value for cash, which is reinvested in assets of comparable or superior type, value and quality;

(iv) made on arm's length terms in exchange for other assets comparable or superior as to type, value and quality;

(v) by one Obligor to another Obligor;

(vi) constituted by a licence of Intellectual Property Rights;

(vii) made in relation to non-material assets which have depreciated to less than 25% (twenty five per cent) of their initial value or which are obsolete;

(viii) excluding any disposal otherwise permitted under (ii) to (vii) above, disposals where the higher of the market value or consideration receivable for such disposals does not exceed (x) 10% (ten per cent) of Total Assets during any financial year, and (y) 25% (twenty five per cent) of Total Assets during the term of the Credit; or

(ix) arising as a result of Permitted Security,

provided that the disposal is not of assets forming part of (A) the Investment or (B) shares in subsidiaries holding assets forming part of the Investment or (C) Intellectual Property Rights in connection with the Investment, which may not be disposed of unless either (a) the Borrower consults the Bank in relation to such disposal, and the Bank approves the disposal, or (b) the proceeds of the disposal are applied to prepay the Bank in accordance with Article 5.3.5 (Disposals).

For the purposes of this Paragraph 8 (Disposal of assets), "dispose" and "disposal" includes any act effecting sale, transfer, lease or other disposal.

9. Maintenance of assets

The Borrower and any Guarantor, as applicable, shall maintain, repair, overhaul and renew all assets required in relation to the Investment as required to keep such assets in good working order.

10. Ranking

The Borrower shall procure that:

(a) its payment obligations under this Contract rank at least pari passu in right of payment with any other present or future unsecured obligations under any

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of its debt instruments except for obligations mandatorily preferred by law applying to companies generally;

(b) any existing and future loans granted by any of the shareholders of the Borrower are subordinated to its payment obligations under this Contract.

11. Insurances

The Borrower, the Guarantor 2 and/or any Parent, as applicable, shall, and shall procure that each Group Company shall, maintain insurances on and in relation to its business and assets with reputable underwriters or insurance companies against those risks and to the extent as is usual for companies carrying on the same or substantially similar business.

12. Change in business

(a) The Borrower and the Guarantor 2 shall procure that no change is made to the general nature business of the Borrower or the Group as a whole from that described in the integrated business plan of the Group that the Guarantor 2 communicated to the Bank on 4May 2023.

(b) Sub-paragraph (a) above does not apply to any such disposal made with the prior written consent of the Bank.

13. Merger

The Borrower, the Guarantor 2 and/or any Parent, as applicable, shall not, and shall procure that no Group Company shall, enter into any amalgamation, demerger, merger or corporate reconstruction unless:

(a) with the prior written consent of the Bank; or

(b) such amalgamation, demerger, merger or corporate reconstruction does not result in a Material Adverse Change and is on a solvent basis, and provided that:

(i) only Group Companies are involved;

(ii) the resulting entity will not be incorporated or located in a country which is in a jurisdiction that is blacklisted by any Lead Organisation in connection with activities such as money laundering, financing of terrorism, tax fraud and tax evasion or harmful tax practices as such blacklist may be amended from time to time; and

(iii) if the Borrower is involved, (i) the rights and obligations of the Borrower under this Contract will remain with the Borrower, (ii) the surviving entity will be the Borrower and the statutory seat of the Borrower would not as a result of such merger be transferred to a different jurisdiction, (iii) the merger will not have an effect on the validity, legality or enforceability of the Borrower's obligations under this Contract; and (iv) all of the business and assets of the Borrower are retained by it; (v) the financial situation of the surviving entity shall be the same as or better than that of the Borrower.

14. Books and records

Each Obligor shall ensure that it has kept and will continue to keep proper books and records of account, in which full and correct entries shall be made of all financial transactions and its assets and business, including expenditures in connection with the Investment, in accordance with US GAAP, as applicable, as in effect from time to time.

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15. Ownership

(a) The Borrower shall maintain not less than 51% (fifty one per cent) of the share capital, directly or indirectly, of each of its Material Subsidiaries, unless a prior written consent of the Bank is received by the Borrower.

(b) The Borrower shall in aggregate maintain not less than 51% (fifty one per cent) of the share capital, directly or indirectly, of its Material Subsidiaries being a Guarantor, unless prior written consent of the Bank is received by the Borrower.

(c) The Borrower shall immediately notify the Bank in the event of a new entity becoming a Subsidiary of the Borrower through any means, including but not limited to acquisition, creation and spin-off.

(d) The undertakings in sub-paragraphs (a), (b) and (c) above shall be calculated in accordance with US GAAP as applied by the Borrower on the date of this Contract and as US GAAP is amended from time to time and tested annually.

(e) The Guarantor 2 shall maintain not less than 51% (fifty one per cent) of the share capital, directly or indirectly, of each of its Material Subsidiaries, unless a prior written consent of the Bank is received by the Guarantor 2.

(f) The Guarantor 2 shall in aggregate maintain not less than 51% (fifty one per cent) of the share capital, directly or indirectly, of each of the Borrower, the Guarantor 1, the Guarantor 3 and the Guarantor 4, or any other material subsidiary being a Guarantor prior written consent of the Bank is received by the Guarantor 2.

(g) The Guarantor 2 shall immediately notify the Bank in the event of a new entity becoming a Subsidiary of the Guarantor 2 through any means, including but not limited to acquisition, creation and spin-off.

(h) The undertakings in sub-paragraphs (e), (f) and (g) above shall be calculated in accordance with US GAAP as applied by the Guarantor 2 on the date of this Contract and as US GAAP is amended from time to time and tested annually.

16. Acquisitions

The Borrower shall not, and shall procure that no Group Company shall, invest in or acquire any entity or a business going concern or an undertaking (whether whole or substantially the whole of the assets or business), or any division or operating unit thereof, or any shares or securities of any entity or a business or undertaking (or in each case, any interest in any of them) (or agree to any of the foregoing), save for an acquisition or investment:

(a) with the prior written consent of the Bank;

(b) by one Obligor of an asset sold, leased, transferred or otherwise disposed of by another Obligor;

(c) by a Group Company of all the shares or other ownership interests in any limited liability company or corporation, limited liability partnership or any equivalent company, provided that:

(i) such entity has not yet commenced commercial operations;

(ii) such entity is incorporated in a country that is a member of either or both of the European Union or the Organisation of Economic Co-Operation and Development; and

(iii) no Event of Default is continuing on the date the relevant acquisition agreement is entered into or would occur as a result of the acquisition; or

(d) of shares or other ownership interests in any limited liability company or corporation, limited liability partnership or any equivalent company, provided that:

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(i) no Event of Default is continuing on the date the relevant acquisition agreement is entered into or would occur as a result of the acquisition;

(ii) the acquired entity is engaged in biotechnology

(iii) the acquired entity is not incorporated or located in a jurisdiction that is blacklisted by any Lead Organisation in connection with activities such as money laundering, financing of terrorism, tax fraud and tax evasion or harmful tax practices as such blacklist may be amended from time to time; and

(iv) in respect of any acquisition where the consideration exceeds EUR 750,000 (seven hundred fifty thousand euro), legal and financial due diligence reports (including customary reliance letters in favour of the Bank) and a business plan (in the form of the most recent budget adjusted for the expected effects of the acquisition) in respect of the 3 (three) next following financial years and any other due diligence reports received in connection with the acquisition (if any) are provided to the Bank;

(v) the Guarantor 2 provides a Compliance Certificate for the 2 (two) 12 (twelve) month financial periods immediately following the acquisition, updated on a pro forma basis as if the acquisition has occurred.

17. Indebtedness

The Borrower, the Guarantor 2 and/or any Parent, as applicable, shall not, and shall procure that no other Group Company shall, incur any Indebtedness, save for Indebtedness incurred:

(a) with the prior written consent of the Bank;

(b) under this Contract;

(c) under any Finance Lease if the aggregate liability in respect of the equipment leased does not at any time exceed EUR 1,000,000 (one million euro) (or its equivalent in another currency or currencies);

(d) under Permitted Hedging;

(e) under any letters of credit provided that such Indebtedness does not, singularly or in aggregate, exceed EUR 1,000,000 (one million euro) (or its equivalent in another currency or currencies);

(f) in respect of a Permitted Guarantee; or

(g) not permitted by the preceding sub-paragraphs and the outstanding amount of which does not exceed EUR 1,000,000 (one million euro) (or its equivalent) in aggregate for the Group at any time.

18. Guarantees

(a) The Borrower, the Guarantor 2 and/or any Parent, as applicable, shall not, and shall procure that no other Group Company shall, issue or allow to remain outstanding any guarantees in respect of any liability or obligation of any person save for:

(i) with the prior written consent of the Bank; or

(ii) guarantees issued in the ordinary course of trade by any Group Company under or in connection with:

(1) under any Guarantee Agreement;

(2) under any negotiable instruments;

(3) in connection with any performance bond;

(4) in connection with any Permitted Indebtedness; or

(5) issued by one Obligor to another Obligor.

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(b) The Borrower, the Guarantor 2 and/or any Parent, as applicable shall procure that:

(i) as soon as any Group Company becomes a Material Subsidiary (as identified in any accounts delivered to the Bank from time to time pursuant to Paragraph 2 (Information concerning the Borrower) of Schedule I (Information and Visits)) the Borrower and/the Guarantor 2 and/or any Parent, as applicable shall promptly notify the Bank; and

(ii) on the Bank’s request any Parent shall promptly enter into a Guarantee Agreement and provide the Bank with:

(1) a certified copy of the resolution of the competent body (management board, supervisory board, board of directors and/or general meeting of shareholders) of such Material Subsidiary or a Parent, as applicable, duly authorising the execution of such Guarantee Agreement and duly authorising the person or persons signing such Guarantee Agreement on behalf of such Material Subsidiary or Parent, as applicable, together with the specimen signature of each such person or persons;

(2) evidence that such Material Subsidiary or a Parent, as applicable, has obtained all necessary Authorisations required in connection with such Guarantee Agreement and, where applicable, any accession deed in respect of such Guarantee Agreement; and

(3) a legal opinion of a reputable law firm in the jurisdiction of incorporation of such Material Subsidiary or a Parent, as applicable, addressed to the Bank on the valid existence of such Material Subsidiary or a Parent, as applicable, the authority and capacity of such Material Subsidiary or a Parent, as applicable, to enter into the Guarantee Agreement and on the due execution and choice of law of the Guarantee Agreement,

each in form and substance satisfactory to the Bank.

19. Hedging

The Borrower, the Guarantor 2 and/or any Parent, as applicable, shall not, and shall procure that no other Group Company shall, enter into any derivative transaction other than Permitted Hedging, where "Permitted Hedging" means:

(a) any derivative transaction by a Group Company to hedge actual or projected exposure arising in the ordinary course of trading and not for speculative purposes; and

(b) any derivative instrument of a Group Company which is accounted for on a hedge accounting basis but is not entered into for speculative purposes.

20. Restrictions on distributions

The Borrower, the Guarantor 2 and/or any Parent, as applicable, shall not, and shall procure that no other Group Company shall, declare or distribute dividends, or return or purchase shares, save for:

(a) with the prior written consent of the Bank;

(b) payments to a Group Company as a result of a solvent liquidation or reorganisation of a Group Company which is not an Obligor;

(c) any dividend payments made by any subsidiary of the Borrower.

21. Restrictions on loans

The Borrower and the Guarantor 2 shall not, and shall ensure that no other member of the Group will, be a creditor in respect of any Indebtedness, save for:

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(a) any trade credit extended by any member of the Group to its customers on normal commercial terms and in the ordinary course of its trading activities;

(b) any loan made by one member of the Group (other than an Obligor) to another member of the Group;

(c) a loan made by one Obligor to another Obligor; or

(d) any other Indebtedness or loan advanced to or made available by any member of the Group with the prior written consent of the Bank.

22. Restrictions on intercompany loans

The Borrower, the Guarantor 2 and/or any Parent, as applicable, shall not, and shall procure that no other Group Company shall, make any payment in respect of any intercompany loan, save for:

(a) with the prior written consent of the Bank;

(b) where the lender of the intercompany loan is the Borrower or an Obligor; or

(c) the payments to a Group Company as a result of a solvent liquidation or reorganisation of a Group Company which is not an Obligor.

23. Intellectual Property Rights

The Borrower, the Guarantor 2 and/or any Parent, as applicable, shall, and shall procure that each other Group Company shall, (i) obtain, safeguard and maintain its rights with respect to the Intellectual Property Rights required for the implementation of the Investment in accordance with this Contract, including complying with all material contractual provisions and that the implementation of the Investment in accordance with this Contract will not result in the infringement of the rights of any person with regard to the Intellectual Property Rights and (ii) ensure that any Intellectual Property Rights required for the implementation of the Investment will be owned by or licensed to the Borrower, and where such Intellectual Property Rights which are owned by a Group Company are capable of registration, are registered to such party.

24. Maintenance of Status

The Borrower, the Guarantor 2 and/or any Parent, as applicable, shall, and shall procure that each other Group Company shall, remain duly incorporated and validly existing as a corporate entity with limited liability under the jurisdiction in which it is incorporated and that it will have no centre of main interests, permanent establishment or place of business outside the jurisdiction in which it is incorporated, and that it will continue to have the power to carry on its business as it is now being conducted and continue to own its property and other assets.

25. Negative pledge

(a) The Borrower, the Guarantor 2 and/or any Parent, as applicable, shall not (and shall procure that no other Group Company shall) create or permit to subsist any Security over any of its assets.

(b) For the purposes of this Paragraph 25 (Negative pledge), the term Security shall also include any arrangement or transaction on assets or receivables or money (such as the sale, transfer or other disposal of assets on terms whereby they are or may be leased to or re-acquired by any Group Company, the sale, transfer or other disposal of any receivables on recourse terms or any arrangement under which money or the benefit of a bank account or other account may be applied or set off or any preferential arrangement having a similar effect) in circumstances where the arrangement or transaction is entered into primarily as a method of raising credit or of financing the acquisition of an asset.

(c) Sub-paragraph (a) above does not apply to any Security, listed below:

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(i) any netting or set-off arrangement entered into by any Group Company in the ordinary course of its banking arrangements for the purpose of netting debit and credit balances;

(ii) any payment or close out netting or set-off arrangement pursuant to any Permitted Hedging, but excluding any Security under a credit support arrangement in relation to a hedging transaction;

(iii) any lien arising by operation of law and in the ordinary course of trading;

(iv) any Security over or affecting any asset acquired by Group Company after the date of this Contract if:

(1) the Security was not created in contemplation of the acquisition of that asset by a Group Company;

(2) the principal amount secured has not been increased in contemplation of or since the acquisition of that asset by a Group Company; and

(3) the Security is removed or discharged within 3 (three) months of the date of acquisition of such asset;

(v) any Security over or affecting any asset of any company which becomes a Group Company after the date of this Contract, where the Security is created prior to the date on which that company becomes a Group Company, if:

(1) the Security was not created in contemplation of the acquisition of that company;

(2) the principal amount secured has not increased in contemplation of or since the acquisition of that company; and

(3) the Security is removed or discharged within 3 (three) months of that company becoming a Group Company;

(vi) any Security entered into pursuant to this Contract;

(vii) any Security arising under any retention of title, hire purchase or conditional sale arrangement or arrangements having similar effect in respect of goods supplied to a Group Company in the ordinary course of trading and on the supplier's standard or usual terms and not arising as a result of any default or omission by any Group Company; or

(viii) any Security securing indebtedness the principal amount of which (when aggregated with the principal amount of any other indebtedness which has the benefit of Security given by a Group Company other than any permitted under sub-paragraphs (i) to (vii) above) does not exceed EUR 500,000 (or its equivalent in another currency or currencies) per cent) of the Borrowers consolidated own funds.

26. Data Protection

(a) When disclosing information (other than mere contact information relating to the Borrower’s personnel involved in the management of this Contract ("Contact Data")) to the Bank in connection with this Contract, the Borrower shall redact or otherwise amend that information (as necessary) so that it does not contain any personal data, except where this Contract specifically requires, or the Bank specifically in writing requests, the disclosure of that information in the form of personal data.

(b) Before disclosing any personal data (other than Contact Data) to the Bank in connection with this Contract, the Borrower shall ensure that each data subject of those personal data:

(i) has been informed of the disclosure (including the categories of personal data to be disclosed); and

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(ii) has the information in the Bank’s privacy statement in relation to its lending and investment activities set out at the relevant time at https://www.eib.org/en/privacy/lending (or such other address as the Bank may notify to the Borrower in writing from time to time).

27. Other Undertakings

(a) The Borrower shall take note of the Bank’s group statement on tax fraud, tax evasion, tax avoidance, aggressive tax planning, money laundering and financing of terrorism (as published on the Bank’s website and as may be amended from time to time).

(b) If the Borrower, the Guarantor 2 and/or any Parent, as applicable, or any other Group Company concludes with any other secured and unsubordinated creditor a financing agreement that includes a loss-of-rating clause or a covenant or other provision regarding its financial ratios, if applicable, that is not provided for in this Contract or is more favourable to the relevant creditor than any equivalent provision of this Contract is to the Bank, the Borrower shall promptly inform the Bank and shall provide a copy of the more favourable provision to the Bank. The Bank may request that the Borrower promptly executes an agreement to amend this Contract so as to provide for an equivalent provision in favour of the Bank.

(c) The Borrower and any Guarantor shall not proceed to any Senior Management Change save for with the prior written consent of the Bank.

28. Minimum Cash Balance

(a) the Borrower shall ensure that, from 30th April prior to each Additional Remuneration Payment Date (as defined in Schedule J – Additional Remuneration – below) until the relevant payment has been made, it will have Cash in an amount at least equal to the Additional Remuneration to be paid on the next Additional Remuneration Payment Date; and

(b) the Guarantor 2 shall ensure that, until the amount of the Loan Outstanding, together with accrued interest and all other amounts accrued or outstanding under this Contract is repaid in full, it will have Cash in an amount at least equal in USD to the amount of EUR 14,650,000 (fourteen million six hundred fifty thousand euro).

(c) For the purposes of this Article 28:

“Cash” means, at any time, cash in hand or at bank and (in the latter case) credited to an account in the name of the Borrower and to which the Borrower is alone beneficially entitled and for so long as:

(a) that cash is repayable within 30 days of demand;

(b) repayment of that cash is not contingent on the prior discharge of any other indebtedness of the Borrower or of any other person whatsoever or on the satisfaction of any other condition;

(c) there is no security over that cash except for any Permitted Security constituted by a netting or set-off arrangement entered into by the Borrower in the ordinary course of its banking arrangements; and

(d) the cash is freely and (except as mentioned in paragraph (a) above) immediately available to be applied in repayment or prepayment of any outstanding Loan.

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Schedule I

Information and Visits

1. Information concerning the Investment

(a) The Borrower shall deliver to the Bank:

(i) the information in content and in form, and at the times, specified in Part A.2 (Information Duties) of Schedule A (Investment Specification and Reporting) or otherwise as agreed from time to time by the parties to this Contract;

(ii) any such information or further document concerning the Investment as the Bank may reasonably require to comply with its obligations under the EFSI Regulation; and

(iii) any such information or further document concerning the financing, procurement, implementation, operation and environmental matters of or for the Investment as the Bank may reasonably require within a reasonable time;

provided always that if such information or document is not delivered to the Bank on time, and the Borrower does not rectify the omission within a reasonable time set by the Bank in writing, the Bank may remedy the deficiency, to the extent feasible, by employing its own staff or a consultant or any other third party, at the Borrower's expense and the Borrower shall provide such persons with all assistance necessary for the purpose.

(b) The Borrower shall submit for the approval of the Bank without delay any material changes to the Investment, also taking into account the disclosures made to the Bank in connection with the Investment prior to the signing of this Contract, in respect of, inter alia, the total cost, plans, timetable or to the expenditure programme or financing plan for the Investment.

(c) The Borrower shall promptly inform the Bank of:

(i) any action initiated or any objection raised by any third party or any genuine complaint received by the Borrower or any material Environmental Claim that is to its knowledge commenced, pending or threatened against it with regard to environmental or other matters affecting the Investment; and

(ii) any fact or event known to the Borrower, which may substantially prejudice or affect the Borrower's ability to execute the Investment;

(iii) a genuine allegation, complaint or information with regard to Illegal Activities related to the Loan and/or the Investment; and

(iv) any non-compliance by it with any applicable Environmental Law;

and set out the action to be taken with respect to such matters;

(d) If the total cost of the Investment exceeds the estimated figure set out in Recital (A), the Borrower shall notify the Bank without delay and shall inform the Bank of its plans to fund the increased costs.

(e) The Borrower shall, and shall procure that each other Group Company shall, promptly inform the Bank if at any time it becomes aware of the illicit origin (including products of money laundering or linked to the financing of terrorism) of any funds invested in the Investment by the Borrower or by its controlling entities or another Group Company.

(f) The Borrower shall provide to the Bank, if so requested:

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(i) a certificate of its insurers showing that all assets required in order to carry out the Investment are insured with reputable underwriters or insurance companies against those risks and to the extent as is usual for companies carrying on the same or substantially similar business; and

(ii) annually, a list of policies in force covering any aspect of the Investment, together with confirmation of payment of the current premiums.

2. Information concerning the Borrower

(a) The Borrower shall deliver to the Bank:

(i) as soon as they become available but in any event within 120 (one hundred and twenty) days after the end of each of its financial years its audited consolidated and unconsolidated annual report, balance sheet, cash flow statement, profit and loss account and auditors report for that financial year together with a Compliance Certificate signed by 2 (two) directors;

(ii) as soon as they become available but in any event within 90 (ninety) days after the end of each of the relevant accounting periods its interim consolidated and unconsolidated semi-annual report, balance sheet, profit and loss account and cash flow statement for the first half-year of each of its financial years together with a Compliance Certificate signed by 2 (two) directors;

(iii) as soon as they become available but in any event within 30 (thirty days) days after the end of each relevant period its liquidity forecasts for the next twelve months on a rolling basis, satisfactory to the Bank;

(iv) from time to time, such further information, evidence or document concerning its general financial situation or such certificates of compliance with the undertakings of Article 7 (Borrower undertakings and representations) as the Bank may deem necessary or may reasonably require to be provided within a reasonable time; and

(v) any such information or further document concerning customer or any other type of due diligence matters of, or for, the Borrower, including without limitation to comply with “Know your customer” (KYC) or similar identification procedures as the Bank may deem necessary or may reasonably require to be provided within a reasonable time;

(vi) from time to time, such further information, evidence or document concerning the factual information or documents provided to the Bank for the purposes of entering into this Contract, as the Bank may deem necessary or may require to be provided within a reasonable time;

(b) The Borrower shall inform the Bank immediately of:

(i) any Default or Event of Default having occurred or being threatened or anticipated;

(ii) to the extent permitted by law, any material litigation, arbitration, administrative proceedings or investigation carried out by a court, administration or similar public authority, which, to the best of its knowledge and belief is current, threatened or pending:

(1) against the Borrower or its controlling entities or members of the Borrower's management bodies in connection with Illegal Activities related to the Loan or the Investment; or

(2) which might if adversely determined result in a Material Adverse Change;

(iii) any measure taken by the Borrower pursuant to Paragraph 6 (Integrity) of Schedule H (General Undertakings);

(iv) any Change in the Beneficial Ownership of the Borrower; and

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(v) any Voluntary Non EIB Prepayment that has occurred or is likely to occur.

3. Visits by the Bank

(a) Each Obligor shall allow the Bank and, when either required by the relevant mandatory provisions of EU law or pursuant to the EFSI Regulation, the competent EU institutions including the European Court of Auditors, the Commission, the European Anti-Fraud Office, the European Public Prosecutor’s Office as well as persons designated by the foregoing;

(i) to visit the sites, installations and works comprising the Investment;

(ii) to interview representatives of each Obligor, and not obstruct contacts with any other person involved in or affected by the Investment; and

(iii) to conduct such investigations, inspections, on the spot audits and checks as they may wish and review the Obligors’ books and records in relation to the execution of the Investment and to be able to take copies of related documents to the extent not prohibited by the law.

(b) Each Obligor shall provide the Bank, or ensure that the Bank is provided, with all necessary assistance for the purposes described in this Paragraph 3 (Visits by the Bank).

(c) In the case of a genuine allegation, complaint or information with regard to Illegal Activities related to the Loan and/or the Investment, the Borrower shall consult with the Bank in good faith regarding appropriate actions. In particular, if it is proven that a third party committed Illegal Activities in connection with the Loan and/or the Investment with the result that the Loan or the EFSI financing were misapplied, the Bank may, without prejudice to the other provisions of this Contract, inform the Borrower if, in its view, the Borrower should take appropriate recovery measures against such third party. In any such case, the Borrower shall in good faith consider the Bank's views and keep the Bank informed.

4. Disclosure and publication

(a) The Borrower acknowledges and agrees that:

(i) the Bank may be obliged to communicate information relating to the Borrower and the Investment to any competent institution or body of the European Union in accordance with the relevant mandatory provisions of European Union law or pursuant to the EFSI Regulation; and

(ii) the Bank may publish in its website or produce press releases containing information related to the financing provided pursuant to this Contract with support of the EFSI, including the name, address and country of establishment of the Borrower the purpose of the financing, and the type and amount of financial support received under this Contract.

(b) The Borrower agrees to cooperate with the Bank to ensure that any press releases or publications made by the Borrower regarding the financing include an appropriate acknowledgement of the financial support provided by the Bank with the backing of the European Union through EFSI.

(c) If requested by the Bank, the Borrower undertakes to refer to this financing and other Bank financings in its public communications, if appropriate, during the availability period, and in connection with any drawdowns, and communications on major corporate events.

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5. Information concerning payments made to the Bank

(a) The Borrower shall deliver to the Bank, on the date falling thirty (30) days prior to the date of each payment due to the Bank under this Contract, a payment notice in the form of Schedule K (the “Payment Notice”) containing, among other things, the calculation of the EIB IRR (as defined in Schedule J (Additional Remuneration) below) at such payment date and specifying each amount due to be paid and labelling such amount under “Interest”, “Principal” and “Additional Remuneration” or any other amount paid at such payment or due to the Bank in accordance with the EIB IRR definition (as well as evidence of the composition of the minimum cash balance as indicated in paragraph 28 (Minimum cash balance) of Schedule H (General Undertakings) for pyments relating to Additional Remuneration only).

(b) The Bank will review the Payment Notice provided by the Borrower under paragraph (a) above and may request a change to be made to such Payment Notice within fifteen (15) days of receipt thereof. If the Borrower agrees to such changes, the Borrower shall prepare a revised Payment Notice reflecting such requested changes, which shall then become the Payment Notice to be made at the relevant payment date.

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Schedule J

Additional Remuneration

1. Definitions

In this Schedule J (Additional Remuneration):

“Additional Remuneration” has the meaning given to that term in paragraph 2 below.

“Additional Remuneration Buyout Fee” means a fee calculated in accordance with paragraph 5 (c) below.

“Additional Remuneration Buyout Notice” means a written notice from the Bank to the Borrower in the event a Voluntary Additional Remuneration Event or a Mandatory Additional Remuneration Event has occurred.

“Additional Remuneration Payment Date” means the 30th June following the end of each Financial Year during the Duration Period. For example the Additional Remuneration Payment Date for the Additional Remuneration accrued in year 2026 is 30th June 2027.

“Duration Period” has the meaning given to that term in paragraph 4 below.

“EIB IRR” means the Bank’s internal rate of return taking into account all outflows and inflows for the Bank, it being specified that disbursed Tranches will be considered as a negative value (outflows) and the amounts in principal in accordance with Article 5.1 (Normal repayment) together with the Fixed Rate and Deferred Interest Rate applicable under the Credit, are considered as a positive values (inflows). Any other amount paid to the Bank from time to time under the Credit, including any applicable Prepayment Fee together with any Drop Dead Fee, Cancellation Fee and Additional Remuneration are considered as additional positive values (inflows).

“Financial Year” means the Borrower’s financial year running from 1 January to 31 December in each year.

“Independent Expert” means an accounting firm of international repute with offices in at least Milan and Luxembourg, jointly appointed by the Borrower and the Bank in accordance with paragraph 6 below.

“Mandatory Additional Remuneration Event” means either:

(a) The Borrower has served a notice to prepay a Tranche in accordance with article 5.2.1 (Prepayment option) of the Finance Contract;

(b) a Prepayment Event (other than pursuant to article 5.3.1 (Cost reduction) of the Finance Contract) has occurred and the Bank has demanded prepayment of the Loan in full in accordance with article 5.3 (Compulsory prepayment) of the Finance Contract; or

(c) an Event of Default has occurred pursuant to article 9.1 (Right to demand repayment) of the Finance Contract and the Bank has requested the immediate repayment of all sums due under the Finance Contract.

“Revenues” means, for each relevant Financial Year and without double-counting, the consolidated revenues of the Group recorded as such in the audited consolidated financial statements of the Guarantor 2 or any Parent, as applicable, for such Financial Year as delivered by the Borrower to the Bank in accordance with Article 7 (Borrower undertakings and representations) and Schedule I (Information and

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Visits). For the calculation of the additional remuneration, all consolidated revenues of the Group shall be considered except the ones for which adequate justification is provided by the Borrower and the Guarantor 2 that they are not related in any way to the assets, (nor the intellectual property rights, the further development, future commercialization, skills, competencies and other assets) acquired through the stock purchase agreement signed on 21 July 2023 between Guarantor 2, Guarantor 1, the Borrower, the shareholders and managers set forth in the said agreement and the shareholder representative services LLC.

“Voluntary Additional Remuneration Event” means that the Borrower serves written notice on the Bank that it elects to pay the whole or a part (of at least 50%) of the Additional Remuneration Buyout Fee instead of the total (or a part proportional to the amount of the Additional Remuneration Buyout Fee, if the election is in respect of less than 100% of the Additional Remuneration Buyout Fee) of future Additional Remuneration payable pursuant to this Schedule.

2. Additional Remuneration

In the event a Tranche has been disbursed to the Borrower, the Borrower shall pay to the Bank for the Duration Period an Additional Remuneration equal to an amount determined in accordance with paragraph 3 (the “Additional Remuneration”).

3. Calculation of the Additional Remuneration

For each Financial Year during the Duration Period, the Additional Remuneration will be equal to A multiplied by the sum of:

(a) [***] of the portion of the Revenues for the relevant Financial Year up to EUR [***]; and

(b) [***]cent of the portion of the Revenues for the relevant Financial Year between EUR [***] and EUR 250[***];

(c) [***] of the portion of the Revenues for the relevant Financial Year exceeding EUR [***];

where A is equal to:

(i) in case only Tranche A has been disbursed: [***]%

(ii) in case Tranches A and B have been disbursed: [***]%;

(iii) in case Tranches A, B and C have been disbursed: [***]%; and

(iv) in case Tranches A, B, C and D have been disbursed: [***]%.

4. Duration and Payment Dates

(a) Subject to paragraph 5 below, the Additional Remuneration will be payable in respect of a period of 7 (seven) Financial Years, from the 1st of January 2026 until the 31st of December 2032 (the “Duration Period”).

(b) The Additional Remuneration shall be paid by the Borrower on each Additional Remuneration Payment Date.

5. Remuneration stream buy back option

(a) In the event of a Mandatory Additional Remuneration Event the Bank may request that the Borrower pays to the Bank the Additional Remuneration Buyout Fee by serving on the Borrower an Additional Remuneration Buyout Notice.

(b) In the event of a Voluntary Additional Remuneration Event, the Bank shall serve on the Borrower an Additional Remuneration Buyout Notice, pursuant to which the Borrower shall pay to the Bank the Additional Remuneration Buyout Fee.

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(c) The Additional Remuneration Buyout Notice shall include the amount of the Additional Remuneration Buyout Fee, which shall be equal to the higher of:

(i) the net present value (NPV) of the future Additional Remuneration payable in respect of the Duration Period as determined by an Independent Expert, where:

(1) direct sales are made in the United States of America; and

(2) if there is any delay in relation to the Group’s business plan provided to the Bank by the Guarantor 2 on 4 May 2023 and created due to the fact that a change is made to the general nature business of the Borrower or the Group as a whole, such delay shall not be taken into consideration while calculating the net present value (NPV) of the future Additional Remuneration payable in respect of the Duration Period by an Independent Expert;

(ii) an amount which, together with the Loan prepayment (including interests and Prepayment Fee) at the date of the Additional Remuneration Buyout Notice, will provide to EIB a total EIB IRR of [***]%; and

(iii) an amount which, together with the Loan prepayment (including interests and Prepayment Fee), at the date of the Additional Remuneration Buyout Notice, will provide to EIB a total amount equal to [***]x the Loan;

(d) If a change is made to the general nature business of the Borrower or the Group as a whole from that described in the Group’s business plan provided to the Bank by Guarantor 2 on 4 May 2023 after the repayment of the Loan Outstanding, together with accrued interest and all other amounts accrued or outstanding under this Contract, the Bank may request, until the expiration of the Duration Period (31st of December 2032), the Borrower to provide the net present value (NPV) of the future Additional Remuneration payable, in respect of the Duration Period as determined by an Independent Expert, where:

(i) direct sales are made in the United States of America; and

(ii) any delay on the Group’s business plan provided to Bank by the Guarantor 2 on 4 May 2023 that has been created due to a change to the Borrower’s or the Group’s business shall not be taken into consideration while calculating the net present value (NPV) of the future Additional Remuneration payable in respect of the Duration Period by an Independent Expert;

If the payment cannot be executed without jeopardising the financial viability of the Group, the Bank, acting reasonably, will make its best efforts to offer an alternative payment arrangement, where the discounting factor associated with said alternative payment arrangement is also taken into account.

(e) The Borrower shall pay the amount specified in the Additional Remuneration Buyout Notice within 15 Business Days following receipt of such notice.

(f) Following the payment of the Additional Remuneration Buyout Fee, no further disbursements can be requested by the Borrower under this Finance Contract.

(g) If the Borrower pays an Additional Remuneration Buyout Fee in respect of the whole Additional Remuneration, then no further Additional Remuneration shall be payable pursuant to this Contract.

(h) If the Additional Remuneration Buyout Fee is in respect of only a proportion (which must not be equal to less than 50%) of the Additional Remuneration, then the Additional Remuneration payable under this Schedule shall be reduced by a proportionate amount.

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6. Appointment of the Independent Expert

(a) The Independent Expert will be jointly appointed by the Borrower and the Bank no later than 15 (fifteen) Business Days from the date either (i) on which the Borrower has delivered an Additional Remuneration stream buyback request to the Bank in case of a Voluntary Additional Remuneration Event; or (ii) on which the Bank has notified the Borrower that it will be serving an Additional Remuneration Buyout Notice following a Mandatory Additional Remuneration Event.

(b) In case no agreement has been found, the Independent Expert will be appointed by the President of the Tribunal of Milan, upon request of any of the Parties.

(c) The Independent Expert will decide on the procedure and timetable to be followed in the determination, being understood that the requested evaluation will be delivered to both Parties not later than 20 (twenty) Business Days from the date of the appointment.

(d) The Independent Expert will act as an expert (arbitratore) for the purposes of article 1349 and 1473 of the Italian Civil Code and shall not be to give reasons for its determination. Its determinations will be final and binding on the Parties, save in case of fraud or manifest error.

(e) The costs, fees and expenses of the Independent Expert shall be borne by the Borrower.

7. Miscellaneous

(a) The Additional Remuneration has been agreed among the Parties only in order to provide a further return to the Bank in connection with the Loan and cannot be construed as, or deemed as an “associazione in partecipazione” for the purposes of article 2549 of the Italian Civil Code.

(b) As a consequence of the above, in any case:

(i) the Bank will have no administrative rights and will not be involved, in any case, in the management and operations of the Borrower and/or any other Group Company (and the Borrower and each Group Company will take full responsibility for any action taken in the course of their own business activities);

(ii) the Borrower agrees to indemnify and hold the Bank harmless for any loss suffered or incurred as a consequence of claims and/or any other action brought by employees, clients and creditors of any Group Company in respect hereof; and

(iii) the Additional Remuneration will automatically accrue (based on the calculation formula indicated above) and will be payable to the Bank without any prior approval and/or resolution from any competent bodies of the Borrower and/or any other Group Company.

(c) It is understood that, in any case, the Bank will not be liable for any losses incurred by the Borrower and/or any other Group Companies in their operations.

(d) Payment of the Additional Remuneration will be independent from any other payments to be made under the Contract (including payments for principal and interest in relation to the Loan).

(e) Provisions of Article 8 (Charges and expenses) shall apply also in relation to any amount due in connection with Additional Remuneration.

77

Schedule K

Form of Payment Notice

To: European Investment Bank

From: Erydel S.p.A.

Date:

Subject: Finance Contract between European Investment Bank and Erydel S.p.A. [] [date of the proposal and date of acceptance] (the "Finance Contract")

Contract Number 91932/92599 Serapis Number 2020-0006

Dear Sirs,

We refer to the Finance Contract. This is a Payment Notice. Terms defined in the Finance Contract have the same meaning when used in this Payment Notice.

In accordance with sub-paragraph (a) of paragraph 3 (Information concerning payments made to the Bank) of Schedule I (Information and Visits) of the Finance Contract, we hereby confirm that on the relevant Payment Date the amount due and to be paid by us as Borrower to the Bank under the Credit is split follows:

(a) Interest equals to [●];

(b) Principal equals to [●];

(c) Additional Remuneration equals to [●]; and

(d) EIB IRR equals to [●] and is not higher than the Italian Usury Rate.

(e) Composition of the Minimum cash balance as indicated in paragraph 28 (Minumum cash balance) of Schedule H (General Undertakings) [for payments relating to Additional Remuneration only]

In accordance with sub-paragraph (a) of paragraph 5 (Information concerning payments made to the Bank) of Schedule I (Information and Visits) of the Finance Contract, please confirm that no change should be made to the Payment Notice.

Yours faithfully,

For and on behalf of Erydel S.p.A.

Date:

78

Schedule 2

Conditions Precedent to be satisfied on or before the Effective Date

(a) The duly executed New Finance Documents.

(b) The constitutional documents of each of the Borrower and each Guarantor.

(c) A copy of the resolution of the competent body (management board, supervisory board, board of directors and/or general meeting of shareholders) of the Borrower and each Guarantor, certified by an authorized signatory, duly authorising the execution of the respective New Finance Documents and duly authorising the person or persons signing the respective New Finance Documents on behalf of the Borrower and/or a Guarantor, as the case may be, together with the specimen signature of each such person or persons.

(d) Evidence that the Borrower and each Guarantor has obtained all necessary Authorisations required in connection with the respective New Finance Documents.

(e) Evidence of the payment of an amendment fee in the amount of EUR [***] ([***] euros) by the Borrower to the Bank to the bank account indicated in the invoice issued by the Bank.

(f) The List of Authorised Signatories and Accounts for the Borrower and the list of authorised signatories for each Guarantor.

(g) A legal opinion of the legal adviser to the Borrower addressed to the Bank:

(i) which includes an insolvency search on the Borrower conducted on the date of such legal opinion

(ii) on the due incorporation, valid existence and good standing of the Borrower, the authority and capacity of the Borrower to enter into the respective New Finance Documents and perform its obligations thereunder, non-conflict with constitutional documents and on laws applicable to companies generally in the relevant jurisdiction, no consents, registrations or filings are required and no stamp duty is to be paid in respect of the respective New Finance Documents, all corporate and other action required to be taken has indeed been taken, the due execution of the respective New Finance Documents, choice of law and enforceability of judgments and that the Borrower is not entitled to claim immunity.

(h) A legal opinion of each legal adviser to each Guarantor, addressed to the Bank:

(i) which includes an insolvency search on each Guarantor conducted on the date of such legal opinion; and

(ii) on the due incorporation, valid existence and good standing of each Guarantor, the authority and capacity of each Guarantor to enter into the respective New Finance Documents and perform its obligations thereunder, non-conflict with constitutional documents and on laws applicable to companies generally in the relevant jurisdiction, no consents, registrations or filings are required and no stamp duty is to be paid in respect of the respective New Finance Documents, all corporate and other action required to be taken has indeed been taken, the due execution of the respective New Finance Documents, choice of law and enforceability of judgments and that each Guarantor is not entitled to claim immunity.

(i) A legal opinion of the legal adviser to each of Guarantor 1, Guarantor 2 and Guarantor 3 (each a “Quince Guarantor”), addressed to the Bank, on the valid existence and good standing of each Quince Guarantor, the authority of each Quince Guarantor to enter into each New Finance Document to which it is a party and perform its obligations thereunder, non-conflict with constitutional documents and on laws applicable to companies generally under the law of the State of California and of the United States, the due execution of the New Finance Documents to which it is a party to the extent that the General Corporation Law

79

of the State of Delaware is applicable thereto, and enforceability of judgments under the Uniform Foreign-Country Money Judgments Recognition Act, in each case subject to reservations and assumptions that are customary in third party opinions of United States lawyers.

(j) Evidence of payment of all the fees and expenses as required under the New Finance Documents.

(k) A copy of any other document, authorisation, opinion or assurance which the Bank has notified the Borrower is necessary or desirable in connection with the entry into and performance of, and the transactions contemplated by, the New Finance Documents or the validity and enforceability of the same.

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* * *

If you agree with terms and conditions of our proposal, please reproduce it in its entirety and deliver it to us duly signed, for your acknowledgment and acceptance.

Yours faithfully,

EUROPEAN INVESTMENT BANK

By: /s/ Donald Fitzpatrick

Name: Donald Fitzpatrick

Title: Head of Division

By: /s/ Geoffroy Van Der Straeten

Name: Geoffroy Van Der Straeten

Title: Head of Division

81

*** *** ***

For acknowledgment and acceptance.

Yours faithfully,

QUINCE THERAPEUTICS, INC.

By: /s/ Dirk Thye

Name: Dirk Thye

Title: Chief Executive Officer

82

EX-10.27

Exhibit 10.27

Certain information contained in this exhibit, marked by [***], has been excluded from this exhibit in accordance with Item 601(b)(10) of Regulation S-K because the registrant has determined that it is both not material and is the type that the registrant treats as private or confidential.

To:

Quince Therapeutics, Inc.

601 Gateway Blvd. Suite 1250

South San Francisco, CA 94080 USA

Email address: [***]

To the kind attention of: Brendan Hannah

VIA COURIER

ANTICIPATED VIA E-MAIL

Luxembourg, 20 October 2023

Dear Sirs,

RE: (2020-0006) ERYDEL (EGFF) - Autonomous First Demand Guarantee (Garanzia Autonoma a Prima Richiesta) provided by Quince Therapeutics, Inc. in favour of the European Investment Bank

We received your proposal dated on the date hereof, which we hereby reproduce below in its entirety and signed at the end for our acknowledgment and acceptance:

*** *** ***

To:

European Investment Bank

100, boulevard Konrad Adenauer

L-2950 Luxembourg

Luxembourg

Email address: [***]

To the kind attention of: OPS/ENPST/3-GC&IF

VIA COURIER

ANTICIPATED VIA E-MAIL

Luxembourg, 20 October 2023

Dear Sirs,

RE: (2020-0006) ERYDEL (EGFF) - Autonomous First Demand Guarantee (Garanzia Autonoma a Prima Richiesta) provided by Quince Therapeutics, Inc. in favour of the European Investment Bank

Following our recent conversations, please find below our proposal of an Autonomous First Demand Guarantee between our company and the European Investment Bank:

*** *** ***

(2020-0006) ERYDEL (EGFF)

Autonomous First Demand Guarantee
(Garanzia Autonoma a Prima Richiesta)

Provided by

Quince Therapeutics, Inc.

In favour of

European Investment Bank

ARTICLE 1	2
First demand guarantee	2
ARTICLE 2	2
Demands	2
ARTICLE 3	3
Representations and Warranties	3
ARTICLE 4	4
Term of guarantee	4
ARTICLE 5	5
Payments and Interest	5
ARTICLE 6	6
Reinstatement	6
ARTICLE 7	6
Currency conversion	6
ARTICLE 8	6
Expenses	6
ARTICLE 9	6
Notices	6
ARTICLE 10	7
No Subrogation	7
ARTICLE 11	7
Transfer	7
ARTICLE 12	8
Partial Invalidity	8
ARTICLE 13	8
Amendments	8
ARTICLE 14	8
Governing Law	8
ARTICLE 15	8
Jurisdiction	8

ARTICLE 16	9
Definitions and Interpretation	9

THIS AUTONOMOUS FIRST DEMAND GUARANTEE IS PROVIDED BY

Quince Therapeutics, Inc., with registered office at 601 Gateway Blvd. Suite 1250, South San Francisco CA 94080, Delaware, USA incorporation, and represented by the signatories whose names appear on the signatures’ pages	(the "Guarantor")
in favour of
The European Investment Bank, with its registered office at 100 boulevard Konrad Adenauer, L-2950 Luxembourg, and represented by the signatories whose names appear on the signatures’ pages	(the "Beneficiary")

The Guarantor and the Beneficiary together are referred to as the “Parties” and any of them is a “Party”.

WHEREAS:

(A) The Beneficiary and Erydel S.p.A., a joint stock company incorporated in Italy, having its registered office at 3, Via Meucci 20091, Bresso (MI), Italy (hereinafter the "Principal") have entered into a finance contract dated 24 July 2020 relating to the financing of a research and development project in Italy (as amended from time to time, the "Finance Contract").

(B) At the request of the Principal, the Guarantor has agreed to enter into this guarantee in favour of the Beneficiary on the terms set out below (the "Guarantee").

It is hereby agreed as follows:

ARTICLE 1

First demand guarantee

1.1 First Demand Guarantee

The Guarantor hereby irrevocably and unconditionally undertakes to pay upon first demand of the Beneficiary, by no later than five (5) Business Days upon receipt of a written demand by the Beneficiary in accordance with Article 2 (Demands) of this Guarantee, any amount specified in such demand up to an amount equal EUR [***] (the "Maximum Amount") without any further enquiry, exception and/or opposition of whatever nature.

1.2 Payment obligation

The Guarantor acknowledges and accepts that each Demand (as defined below) generates an independent payment obligation of the Guarantor towards the Beneficiary of any amount claimed up to the Maximum Amount.

It is specified, to the extent necessary, that the Guarantor shall not be able to raise any exception of any kind to the Beneficiary and shall pay the amount requested in the Demand. The Guarantor expressly waives any judicial or arbitral defence, exception, set-off right (eccezione di compensazione), objection, plea and/or counterclaim which could be raised by the Principal or the Guarantor itself including, without limitation, any defence concerning the execution, delivery, effectiveness and validity of the Finance Contract and/or this Guarantee, the occurrence of an enforcement event, the payment of costs under Article 8 (Expense), the insolvency and/or the admission of the Principal to any Insolvency Proceedings.

1.3 The Parties expressly agree that this Guarantee is an independent and autonomous first demand guarantee (garanzia autonoma a prima richiesta), and shall not to be intended, nor shall be construed, as a fideiussione since it gives rise to an independent, autonomous, irrevocable and unconditional obligation of the Guarantor to pay to the Beneficiary any and all amount required by the latter in accordance with the terms and conditions set forth herein.

It is hereby acknowledged and agreed that Articles 1247, 1413, 1939, 1944, 1945, 1948, 1949, 1950, 1953, 1955 and 1957 of the Italian Civil Code shall not apply to this Guarantee. As a result, the Guarantor may not, so as to defer or avoid the immediate and unconditional performance of its obligations pursuant to this Guarantee, invoke any exception or other means of defence arising out of the existing legal relationship between the Principal and the Beneficiary or any other third party, particularly any potential nullity, resolution, settlement or set-off.

ARTICLE 2

Demands

2.1 Number of demands

The Beneficiary may make one or more Demands. The Beneficiary shall be entitled to enforce this Guarantee in one or more instances (in più soluzioni) and for amounts which, in aggregate, shall not exceed the Maximum Amount.

2.2 Form of the Demands

Each demand shall be made in writing in the form set out in the Annex (Form of Payment Demand) of this Guarantee, signed by a duly authorised signatory of the Beneficiary (a "Demand").

ARTICLE 3

Representations and Warranties

3.1 The Guarantor represents that:

3.1.1 is duly incorporated and validly existing as a corporation under the laws of Delaware (USA);

3.1.2 has the power to carry on its business as it is now being conducted and to own its property and other assets, and to execute, deliver and perform its obligations under this Guarantee;

3.1.3 it is not insolvent (insolvente) nor subject to any Insolvency Proceeding;

3.1.4 has obtained all necessary authorisations in connection with the execution, delivery and performance of this Guarantee and in order to lawfully comply with its obligations thereunder, and all such authorisations are in full force and effect and admissible in evidence;

3.1.5 the execution and delivery of, the performance of the Guarantors’ obligations under and compliance with the provisions of this Guarantee do not and will not contravene or conflict with:

(a) any applicable law, statute, rule or regulation, or any judgement, decree or permit to which it is subject;

(b) any agreement or other instrument binding upon it which might reasonably be expected to have a material adverse effect on its ability to perform its obligations under the Guarantee; or

(c) any provision of its constitutional documents;

3.1.6 The obligations expressed to be assumed by the Guarantor under this Guarantee are legal, valid, binding and enforceable obligations;

3.1.7 it complies in all respect with all laws and regulations to which it is the subject;

3.1.8 its payment obligations under this Guarantee rank not less than pari passu in right of payment with all other present and future unsecured and unsubordinated obligations under any of their debt instruments except for obligations mandatorily preferred by law applying to companies generally;

3.1.9 no litigation, arbitration, administrative proceedings or investigation is current or to its knowledge is threatened or pending before any court, arbitral body or agency which has resulted or is likely to have a material adverse effect on the ability of the Guarantor to perform its obligations under this Guarantee or the legality, validity or enforceability of the rights and remedies of the Beneficiary under this Guarantee;

3.1.10 it has not taken any action to commence proceedings for, nor have any other steps been taken or legal proceedings commenced or threatened against it for its insolvency, winding up or dissolution, or for it to enter into any arrangement or compositions for the benefit of creditors, or for the appointment of an administrator, receiver, administrative receiver, examiner, trustee or similar officer;

3.1.11 is not subject to regulation under any statute or regulation which limits its ability to incur guarantee or secure indebtedness;

3.1.12 under the laws of its jurisdiction of incorporation and the jurisdiction where it maintains its principal place of business, it is not necessary that the Guarantee be filed, recorded or enrolled with any court or other authority in that jurisdiction or that any stamp,

registration, notarial or similar taxes or fees be paid on or in relation to the Guarantee or the transactions contemplated by the Guarantee;

3.1.13 the entry into and performance by the Guarantor of the obligations under this Guarantee is in its commercial interests and to its corporate benefit and the competent corporate bodies have assessed and satisfied themselves as to the existence of such corporate benefit; and

3.1.14 the Guarantor is not entering into this transaction and has not entered into any other transaction with the intent of hindering, delaying or defrauding any present or future creditor of the Guarantor.

3.2 The Guarantor will supply to the Beneficiary:

(a) as soon as they become available but in any event within 120 (one hundred and twenty) days after the end of each of its financial years its audited consolidated and unconsolidated annual report, balance sheet, cash flow statement, profit and loss account and auditors report for that financial year, each certified as being complete and correct by an authorised signatory of the Guarantor;

(b) as soon as they become available but in any event within 90 (ninety) days after the end of each of the relevant accounting periods its interim consolidated and unconsolidated semi-annual report, balance sheet, profit and loss account and cash flow statement for the first half-year of each of its financial years, each certified as being complete and correct by an authorised signatory of the Guarantor;

(c) any such information or further document concerning customer or any other type of due diligence matters of, or for, the Guarantor, including without limitation to comply with “Know your customer” (KYC) or similar identification procedures as the Bank may deem necessary or may reasonably require to be provided within a reasonable time;

(d) as soon as they become available but in any event within 120 (one hundred and twenty) days after the end of each of its financial years, a report showing the breakdown of the Revenues (as defined in the Finance Contract) booked in the consolidated annual report. The breakdown should show details about the source of the Revenues and the group companies under which the Revenues are booked. The reporting should be in the satisfaction of the Bank.

3.3 If the Guarantor enters into a financing agreement or any other form of credit transaction with another creditor or grants any security interest with a credit rating downgrade provision, an undertaking or any other provision relating to financial covenants which are not provided for in this Guarantee, the Guarantor shall inform the Beneficiary (and will provide such clause) and, at the request of the Beneficiary, enter into an amendment to this Guarantee in order to incorporate a provision equivalent to that mentioned above in favour of the Beneficiary.

ARTICLE 4

Term of guarantee

4.1 Guarantee Irrevocable

The Guarantee is irrevocable.

4.2 Term of Guarantee

This Guarantee will take effect on the date hereof and will expire on (and the Guarantor shall have no further obligations under this Guarantee thereafter) the earlier of the following dates:

4.2.1 31 December 2033 (the "Expiry Date");

4.2.2 the date on which all payments (irrevocably) made by the Guarantor under this Guarantee shall equal, in aggregate, the Maximum Amount,

irrespective of whether any originals of this Guarantee have been returned to the Guarantor.

4.2.3 For the avoidance of doubt:

(a) this Guarantee may be called until the Expiry Date; and

(b) the expiry of this Guarantee will have no impact on the enforceability of any Demands made before the Expiry Date.

ARTICLE 5

Payments and Interest

5.1 Account and currency for payment

The Guarantor shall pay any amount demanded by the Beneficiary in a Demand to the bank account specified in that Demand.

All payments due by the Guarantor under this Guarantee shall be made in cleared freely transferable funds, by wire transfer in Euro, by 10.00 a.m. (Italian time) of the fifth Business Day following the day on which the Guarantor has received the relevant Demand by crediting the bank account indicated in the relevant Demand.

5.2 Set-off by the Beneficiary

The Beneficiary may set off any obligation due by the Beneficiary to the Guarantor against any matured obligation owed by the Guarantor to the Beneficiary under the Guarantee, regardless of the place of payment, booking branch or currency of either obligation. If the obligations are in different currencies, the Beneficiary may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off.

5.3 No set-off by the Guarantor

Subject to Clause ‎5.4 (Tax) below, all payments to be made by the Guarantor under the Guarantee shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim.

5.4 Tax

Any payment under this Guarantee shall be made net of any deduction or withholding for or on account of any tax, duty or other charge (a "Tax Deduction"), unless the Guarantor is obliged to make such Tax Deduction, in which case the Guarantor shall increase the amount due to the extent necessary to ensure that, after the making of such Tax Deduction, the Beneficiary receives a net amount equal to the amount that the Beneficiary would have received had no such Tax Deduction been required to be made.

The Guarantor undertakes to pay and indemnify the Beneficiary, within five (5) Business Days from the demand of the Beneficiary, against any amount, cost and loss incurred by the Beneficiary in relation to any stamp duty, registration or any other similar tax or notarial fees payable in respect of this Guarantee.

5.5 Default Interest

If the Guarantor fails to perform its obligation to make a payment on its due date in accordance with the terms of this Guarantee, the Guarantor shall be liable to pay to the Beneficiary, on first demand, in addition to the sum demanded in the relevant Demand, default interest on this sum calculated on a daily basis at the rate of [***] per annum plus, from time to time, EURIBOR for one month for the relevant period as may be, from time to time, selected by the Beneficiary. Any default interest accruing under this Clause ‎5.5 (Default Interest) shall be immediately payable by the Guarantor.

ARTICLE 6

Reinstatement

If any payment by the Guarantor or the Principal or any discharge given by the Beneficiary is avoided or reduced as a result of an insolvency proceeding or any similar event:

6.1.1 the liability of the Guarantor shall continue as if the payment, discharge, avoidance or reduction had not occurred; and

6.1.2 the Beneficiary shall be entitled to recover the value or amount of that payment from the Guarantor, as if the payment, discharge, avoidance or reduction had not occurred.

ARTICLE 7

Currency conversion

If the Beneficiary has received a payment under this Guarantee in a currency other than in which it is to be made pursuant to the Guarantee and must convert this payment, the Guarantor shall indemnify the Beneficiary, at its first demand, for the potential loss resulting from the difference in exchange rates between the date of the conversion and the date on which the payment is received in the other currency, as well as for any fees connected with this conversion.

ARTICLE 8

Expenses

All the costs and expenses (including legal fees, stamp duties and any value added tax) in order to preserve, make the Guarantee effective, execute or enforce the Guarantee, shall be reimbursed by the Guarantor to the Beneficiary on its demand together with the applicable taxes and interest, including, without limitation, the costs, taxes, duties and expenses incurred in connection with the execution, delivery and enforcement of this Guarantee.

ARTICLE 9

Notices

9.1 Notices in writing

(a) Any notice or other communication given under this Guarantee must be in writing and, unless otherwise stated, may be made by letter or electronic mail.

(b) Notices and other communications for which fixed periods are laid down in this Guarantee or which themselves fix periods binding on the addressee, may be made by hand delivery, registered letter or by electronic mail. Such notices and communications shall be deemed to have been received by the other Party:

(i) on the date of delivery in relation to a hand-delivered or registered letter; or

(ii) in the case of any electronic mail, only when actually received in readable form and only if it is addressed in such a manner as the Beneficiary shall specify for this purpose.

Any such communication, or any document sent by any person to another pursuant to the Guarantee or in connection with the Guarantee will only be effective (i) if by way of fax or electronic form, when received in legible form by the recipient, or (ii) if by letter, when it is left at the relevant address or five (5) Business Days after being deposited in the post with postage prepaid in an envelope addressed to it at that address and (iii) if a particular department or officer is specified as part of its address details provided pursuant to this Article 9 (Notices), if addressed to that department or officer.

Any communication should be addressed, as appropriate, as indicated below:

For the Beneficiary Attention: Venture Debt and Impact Finance/ Life Science Unit 100 boulevard Konrad Adenauer L-2950 Luxembourg Email address: [***]

For the Guarantor Attention: Chief Business Officer 601 Gateway Blvd. Suite 1250 South San Francisco, CA 94080 USA Email address: [***].

Each Party shall promptly notify the other Party in writing of any change in their respective communication details.

9.2 English Language

9.2.1 Any notice given under or in connection with this Guarantee must be in English.

9.2.2 All other documents provided under or in connection with this Guarantee must be:

(a) in English; or

(b) if not in English, and if so required by the Beneficiary, accompanied by a certified English translation and, in this case, the English translation will prevail unless the document is a constitutional, statutory or other official document.

ARTICLE 10

No Subrogation

The Guarantor expressly and irrevocably undertakes to waive its rights of subrogation and recourse toward the Principal in accordance with Article 1949 and 1950 of the Italian Civil Code.

ARTICLE 11

Transfer

The Guarantor acknowledges (and agrees in advance) that the Beneficiary may assign or transfer all or any of its rights and benefits under this Guarantee, together with its rights under the Finance Contract, and its position under this Guarantee.

Any reference to the Beneficiary in this Guarantee shall be deemed to include its legal successors, permitted transferees and assigns who for the purposes of the exercise of any rights under this Guarantee shall be considered to have been an original party to the Guarantee.

The Guarantee shall remain in full force and effect notwithstanding any merger or spin off, or part of assets being transferred in consideration for shares in another company of the Beneficiary or its assignees, parties subrogated to its rights, pursuant to the Finance Contract.

ARTICLE 12

Partial Invalidity

If at any time any term of this Guarantee is or becomes illegal, invalid or unenforceable in any respect, or this Contract is or becomes ineffective in any respect, under the laws of any jurisdiction, such illegality, invalidity, unenforceability or ineffectiveness shall not affect:

(a) the legality, validity or enforceability in that jurisdiction of any other term of this Guarantee or the effectiveness in any other respect of this Guarantee in that jurisdiction; or

(b) the legality, validity or enforceability in other jurisdictions of that or any other term of this Guarantee or the effectiveness of this Guarantee under the laws of such other jurisdictions.

ARTICLE 13

Amendments

Any amendment to this Guarantee shall be made in writing and shall be signed by the Parties hereto.

ARTICLE 14

Governing Law

This Guarantee and any non-contractual obligations arising out of or in connection with it shall be governed by the laws of Italy.

ARTICLE 15

Jurisdiction

(a) The courts of Milan have exclusive jurisdiction to settle any dispute (a "Dispute") arising out of or in connection with this Guarantee (including a dispute regarding the existence, validity or termination of this Guarantee or the consequences of its nullity) or any non-contractual obligation arising out of or in connection with this Guarantee.

(b) The Parties agree that the courts of Milan are the most appropriate and convenient courts to settle Disputes between them and, accordingly, that they will not argue to the contrary.

ARTICLE 16

Definitions and Interpretation

16.1 Definitions

In this Guarantee, unless otherwise provided:

"Business Day" means a day (other than a Saturday or Sunday) on which banks are open for general business in Luxembourg and Milan and (in relation to any date for payment to be made in euros), a Target Day.

"EURIBOR" means:

(a) in respect of a relevant period of less than one month, the Screen Rate (as defined below) for a term of one month;

(b) in respect of a relevant period of one or more months for which a Screen Rate is available, the applicable Screen Rate for a term for the corresponding number of months; and

(c) in respect of a relevant period of more than one month for which a Screen Rate is not available, the rate resulting from a linear interpolation by reference to two Screen Rates, one of which is applicable for a period next shorter and the other for a period next longer than the length of the relevant period,

(the period for which the rate is taken or from which the rates are interpolated being the "Representative Period").

For the purposes of paragraphs (b) and (c) above, "available" means the rates, for given maturities, that are calculated and published by Global Rate Set Systems Ltd (GRSS), or such other service provider selected by the European Money Markets Institute (EMMI), under the sponsorship of EMMI and EURIBOR ACI, or any successor to that function of EMMI and EURIBOR ACI as determined by the Beneficiary.

"Financial Year" means the annual accounting period of the Principal ending on 31 December of each year.

“Insolvency Proceeding” means any liquidazione, procedura concorsuale (fallimento, concordato preventivo, concordato fallimentare, liquidazione coatta amministrativa, amministrazione straordinaria o ristrutturazione industriale delle grandi imprese in stato d'insolvenza), as well as, starting from the effective date of the relevant provisions under the Italian Crisis and Insolvency Code (D.Lgs. 12 January 2019, no.14), judicial liquidation (liquidazione giudiziale); restructuring plans (pianiattestati di risanamento), restructuring agreements (accordi di ristrutturazione del debito), arrangement with creditors (concordato preventivo), forced administrative liquidation (liquidazione coatta amministrativa), the entity

being brought before the organismo di composizione della crisi di impresa (OCRI) for the assisted composition procedure (procedimento di composizione assistita della crisi) any other procedure indicated in the Royal Decree 16 March 1942, No. 267 or in the Italian Crisis and Insolvency Code, any similar proceedings or act in any other jurisdiction with the same purposes or effects pursued by the procedures or acts mentioned above, to the extent legally applicable, and any other proceedings or legal concepts similar to the forgoing.

"Relevant Business Day" means a day on which the Trans-European Automated Real-time Gross Settlement Express Transfer payment system which utilises a single shared platform and which was launched on 19 November 2007 (TARGET2) is open for the settlement of payments in EUR.

"Screen Rate" means the rate of interest for deposits in EUR for the relevant period as published at 11h00, Brussels time, or at a later time acceptable to the Beneficiary on the day (the "Reset Date") which falls 2 (two) Relevant Business Days prior to the first day of the relevant period, on Reuters page EURIBOR 01 or its successor page or, failing which, by any other means of publication chosen for this purpose by the Beneficiary.

If such Screen Rate is not so published, the Beneficiary shall request the principal euro-zone offices of four major banks in the euro-zone, selected by the Beneficiary, to quote the rate at which EUR deposits in a comparable amount are offered by each of them as at approximately 11h00, Brussels time, on the Reset Date to prime banks in the euro-zone interbank market for a period equal to the Representative Period. If at least 2 (two) quotations are provided, the rate for that Reset Date will be the arithmetic mean of the quotations.

If fewer than 2 (two) quotations are provided as requested, the rate for that Reset Date will be the arithmetic mean of the rates quoted by major banks in the euro-zone, selected by the Beneficiary, at approximately 11h00, Brussels time, on the day which falls 2 (two) Relevant Business Days after the Reset Date, for loans in EUR in a comparable amount to leading European Banks for a period equal to the Representative Period.

If no rate is available as provided above, EURIBOR shall be the rate (expressed as a percentage rate per annum) which is determined by the Beneficiary to be the all-inclusive cost to the Beneficiary for the funding of the relevant Tranche based upon the then applicable internally generated Beneficiary reference rate or an alternative rate determination method reasonably determined by the Beneficiary.

For the purposes of the foregoing definitions:

(a) All percentages resulting from any calculations referred to in this Schedule will be rounded, if necessary, to the nearest one thousandth of a percentage point, with halves being rounded up.

(b) The Beneficiary shall inform the Principal without delay of the quotations received by the Beneficiary.

(c) If any of the foregoing provisions becomes inconsistent with provisions adopted under the aegis of EMMI and EURIBOR ACI (or any successor to that function of EMMI and EURIBOR ACI as determined by the Beneficiary), the Beneficiary may by notice to the Principal amend the provision to bring it into line with such other provisions.

"TARGET" means the Trans-European Automated Real-time Gross Settlement Express Transfer payment system which utilises a single shared platform and which was launched on 19 November 2007.

"TARGET Day" means any day on which TARGET is open for the settlement of payments in euros.

16.2 Interpretation

16.2.1 Unless a contrary indication appears any reference in this Guarantee to:

(a) the "Guarantor", the "Beneficiary" or any "Party" shall be construed so as to include its and any subsequent successors in title, permitted assigns and permitted transferees;

(b) this "Guarantee" or the "Agreement" or any other agreement or instrument is a reference to this Guarantee or the Agreement or other agreement or instrument as amended, restated, supplemented or novated from time to time;

(c) a "person" includes any person, firm, company, corporation, government, state or agency of a state or any association, trust or partnership (whether or not having separate legal personality) of two or more of the foregoing;

(d) a "regulation" includes any regulation, rule, official directive, request or guideline (whether or not having the force of law) of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation;

(e) a reference to a legal provision is a reference to that provision as amended from time to time; and

(f) save as otherwise provided, a time of day is a reference to Italian time.

16.2.2 Article, Clause and Schedule headings are for ease of reference only and shall not have any impact on the interpretation of this Guarantee.

16.2.3 In this Guarantee, unless the context otherwise requires, words importing the singular shall include the plural and viceversa.

16.2.4 Unless a contrary indication appears, a term used in any notice given under or in connection with this Guarantee has the same meaning in that notice as in this Guarantee.

16.3 Currency Symbols and Definitions

"EUR" and "euro" means the single currency unit of the member states of the European Communities that have adopted such currency unit in accordance with the legislation of the European Community relating to Economic and Monetary Union.

Annex
Form of Payment Demand

[on letterhead of Beneficiary]

Registered letter with acknowledgement of receipt

[location, date]

To: [∙]

Dear Sirs,

1. We refer to the first demand guarantee dated [●] provided by you, in your capacity as Guarantor, in our favour (the "Guarantee").

2. Unless indicated otherwise herein, capitalised terms used herein shall have the same meaning as in the Guarantee.

3. In accordance with Article 2 (Demands) of the Guarantee, we request you, in your capacity as Guarantor, to pay us the amount of EUR [●] (the "Claimed Amount").

4. In accordance with Article 2 (Demands) of the Guarantee, the Claimed Amount must be paid within five (5) Business Days following receipt of the present Demand.

5. The Claimed Amount must be paid to the credit of the account [Insert account number] opened with [●].

Yours faithfully,

European Investment Bank

As Beneficiary

-------------------------

By:

*** *** ***

If you agree with terms and conditions of our proposal, please reproduce it in its entirety and deliver it to us duly signed, for your acknowledgment and acceptance.

Quince Therapeutics, Inc.

/s/ Dirk Thye

Name: Dirk Thye

Title: Chief Executive Officer

*** *** ***

For acknowledgment and acceptance.

European Investment Bank

/s/ Donald Fitzpatrick____________ Name: Donald Fitzpatrick Title: Head of Division /s/ Geoffroy Van Der Straeten ______ Name: Geoffroy Van Der Straeten Title: Head of Division

EX-21.1

Exhibit 21.1

List of Subsidiaries of Quince Therapeutics, Inc.

Entity Name	Jurisdiction of Incorporation
Cortexyme Australia Pty Ltd	Australia
Novosteo, LLC	Delaware
Novosteo Pty Ltd	Australia
EryDel US, Inc.	Delaware
EryDel USA, Inc.	New Jersey
EryDel S.p.A	Italy
EryDel Italy, Inc.	Delaware

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (Nos. 333-231307, 333-237199, 333-253743, 333-263186, 333-265109, and 333-270577) of Quince Therapeutics, Inc. of our report dated April 1, 2024, relating to the consolidated financial statements, which appears in this Annual Report on Form 10-K for the year ended December 31, 2023.

/s/ BDO USA, P.C.

San Jose, California

April 1, 2024

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Dirk Thye, certify that:

1.I have reviewed this Annual Report on Form 10-K of Quince Therapeutics, Inc. for the fiscal year ended December 31, 2023;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s Board of Directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 1, 2024	/s/ Dirk Thye
	Dirk Thye
	President and Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Brendan Hannah, certify that:

1.I have reviewed this Annual Report on Form 10-K of Quince Therapeutics, Inc. for the fiscal year ended December 31, 2023;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s Board of Directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 1, 2024	/s/ Brendan Hannah
	Brendan Hannah
	Chief Business Officer and Chief Operating Officer (Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002 (18 U.S.C. SECTION 1350)

In connection with the Annual Report of Quince Therapeutics, Inc. (the “Company”) on Form 10-K for the fiscal year ended December 31, 2023 as filed with the Securities and Exchange Commission on the date hereof to which this Certification is attached as Exhibit 32.1 (the “Report”), I certify, pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Exchange Act; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: April 1, 2024	By:	/s/ Dirk Thye
		Dirk Thye
		President and Chief Executive Officer
		(Principal Executive Officer)

This certification accompanies the Form 10-K to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act (whether made before or after the date of the Form 10-K), irrespective of any general incorporation language contained in such filing.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002 (18 U.S.C. SECTION 1350)

In connection with the Annual Report of Quince Therapeutics, Inc. (the “Company”) on Form 10-K for the fiscal year ended December 31, 2023 as filed with the Securities and Exchange Commission on the date hereof to which this Certification is attached as Exhibit 32.2 (the “Report”), I certify, pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Exchange Act; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: April 1, 2024	By:	/s/ Brendan Hannah
		Brendan Hannah
		Chief Business Officer and Chief Operating Officer
		(Principal Financial Officer)

This certification accompanies the Form 10-K to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act (whether made before or after the date of the Form 10-K), irrespective of any general incorporation language contained in such filing.

EX-97.1

Exhibit 97.1

Quince Therapeutics, Inc.

Incentive Compensation Recoupment Policy

1.Introduction

The Compensation Committee (the “Compensation Committee”) of the Board of Directors (the “Board”) of Quince Therapeutics, Inc., a Delaware corporation (the “Company”), has determined that it is in the best interests of the Company and its stockholders to adopt this Incentive Compensation Recoupment Policy (this “Policy”) providing for the Company’s recoupment of Recoverable Incentive Compensation that is received by Covered Officers of the Company under certain circumstances. Certain capitalized terms used in this Policy have the meanings given to such terms in Section 3 below.

This Policy is designed to comply with, and shall be interpreted to be consistent with, Section 10D of the Exchange Act, Rule 10D-1 promulgated thereunder (“Rule 10D-1”) and Nasdaq Listing Rule 5608 (the “Listing Standards”).

2.Effective Date

This Policy shall apply to all Incentive Compensation that is received by a Covered Officer on or after October 2, 2023 (the “Effective Date”). Incentive Compensation is deemed “received” in the Company’s fiscal period in which the Financial Reporting Measure specified in the Incentive Compensation award is attained, even if the payment or grant of such Incentive Compensation occurs after the end of that period.

3.Definitions

“Accounting Restatement” means an accounting restatement that the Company is required to prepare due to the material noncompliance of the Company with any financial reporting requirement under the securities laws, including any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period.

“Accounting Restatement Date” means the earlier to occur of (a) the date that the Board, a committee of the Board authorized to take such action, or the officer or officers of the Company authorized to take such action if Board action is not required, concludes, or reasonably should have concluded, that the Company is required to prepare an Accounting Restatement, or (b) the date that a court, regulator or other legally authorized body directs the Company to prepare an Accounting Restatement.

“Administrator” means the Compensation Committee or, in the absence of such committee, the Board.

“Code” means the U.S. Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder.

“Covered Officer” means each current and former Executive Officer.

“Exchange” means the Nasdaq Stock Market.

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.

“Executive Officer” means the Company’s president, principal financial officer, principal accounting officer (or if there is no such accounting officer, the controller), any vice-president of the Company in charge of a principal business unit, division, or function (such as sales, administration, or finance), any other officer who performs a policy-making function, or any other person who performs similar policy-making functions for the Company. Executive officers of the Company’s parent(s) or subsidiaries are deemed executive officers of the Company if they perform such policy-making functions for the Company. Policy-making function is not intended to include policy-making functions that are not significant. Identification of an executive officer for purposes of this Policy would include at a minimum executive officers identified pursuant to Item 401(b) of Regulation S-K promulgated under the Exchange Act.

“Financial Reporting Measures” means measures that are determined and presented in accordance with the accounting principles used in preparing the Company’s financial statements, and any measures derived wholly or in part from such measures, including Company stock price and total stockholder return (“TSR”). A measure need not be presented in the Company’s financial statements or included in a filing with the SEC in order to be a Financial Reporting Measure.

“Incentive Compensation” means any compensation that is granted, earned or vested based wholly or in part upon the attainment of a Financial Reporting Measure.

“Lookback Period” means the three completed fiscal years immediately preceding the Accounting Restatement Date, as well as any transition period (resulting from a change in the Company’s fiscal year) within or immediately following those three completed fiscal years (except that a transition period of at least nine months shall count as a completed fiscal year). Notwithstanding the foregoing, the Lookback Period shall not include fiscal years completed prior to the Effective Date.

“Recoverable Incentive Compensation” means Incentive Compensation received by a Covered Officer during the Lookback Period that exceeds the amount of Incentive Compensation that would have been received had such amount been determined based on the Accounting Restatement, computed without regard to any taxes paid (i.e., on a gross basis without regard to tax withholdings and other deductions). For any compensation plans or programs that take into account Incentive Compensation, the amount of Recoverable Incentive Compensation for purposes of this Policy shall include, without limitation, the amount contributed to any notional account based on Recoverable Incentive Compensation and any earnings to date on that notional amount. For any Incentive Compensation that is based on stock price or TSR, where the Recoverable Incentive Compensation is not subject to mathematical recalculation directly from the information in an Accounting Restatement, the Administrator will determine the amount of Recoverable Incentive Compensation based on a reasonable estimate of the effect of the Accounting Restatement on the stock price or TSR upon which the Incentive Compensation was received. The Company shall maintain documentation of the determination of that reasonable estimate and provide such documentation to the Exchange in accordance with the Listing Standards.

“SEC” means the U.S. Securities and Exchange Commission.

4.Recoupment

(a)Applicability of Policy. This Policy applies to Incentive Compensation received by a Covered Officer (i) after beginning services as an Executive Officer, (ii) who served as an Executive Officer at any time during the performance period for such Incentive Compensation, (iii) while the Company had a class of securities listed on a national securities exchange or a national securities association, and (iv) during the Lookback Period.

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(b)Recoupment Generally. Pursuant to the provisions of this Policy, if there is an Accounting Restatement, the Company must reasonably promptly recoup the full amount of the Recoverable Incentive Compensation, unless the conditions of one or more subsections of Section 4(c) of this Policy are met and the Compensation Committee, or, if such committee does not consist solely of independent directors, a majority of the independent directors serving on the Board, has made a determination that recoupment would be impracticable. Recoupment is required regardless of whether the Covered Officer engaged in any misconduct and regardless of fault, and the Company’s obligation to recoup Recoverable Incentive Compensation is not dependent on whether or when any restated financial statements are filed.

(c)Impracticability of Recovery. Recoupment may be determined to be impracticable if, and only if:

(i)the direct expense paid to a third party to assist in enforcing this Policy would exceed the amount of the applicable Recoverable Incentive Compensation; provided that, before concluding that it would be impracticable to recover any amount of Recoverable Incentive Compensation based on expense of enforcement, the Company shall make a reasonable attempt to recover such Recoverable Incentive Compensation, document such reasonable attempt(s) to recover, and provide that documentation to the Exchange in accordance with the Listing Standards; or

(ii)recoupment of the applicable Recoverable Incentive Compensation would likely cause an otherwise tax-qualified retirement plan, under which benefits are broadly available to employees of the Company, to fail to meet the requirements of Code Section 401(a)(13) or Code Section 411(a) and regulations thereunder.

(d)Sources of Recoupment. To the extent permitted by applicable law, the Administrator shall, in its sole discretion, determine the timing and method for recouping Recoverable Incentive Compensation hereunder, provided that such recoupment is undertaken reasonably promptly. The Administrator may, in its discretion, seek recoupment from a Covered Officer from any of the following sources or a combination thereof, whether the applicable compensation was approved, awarded, granted, payable or paid to the Covered Officer prior to, on or after the Effective Date: (i) direct repayment of Recoverable Incentive Compensation previously paid to the Covered Officer; (ii) cancelling prior cash or equity-based awards (whether vested or unvested and whether paid or unpaid); (iii) cancelling or offsetting against any planned future cash or equity-based awards; (iv) forfeiture of deferred compensation, subject to compliance with Code Section 409A; and (v) any other method authorized by applicable law or contract. Subject to compliance with any applicable law, the Administrator may effectuate recoupment under this Policy from any amount otherwise payable to the Covered Officer, including amounts payable to such individual under any otherwise applicable Company plan or program, e.g., base salary, bonuses or commissions and compensation previously deferred by the Covered Officer. The Administrator need not utilize the same method of recovery for all Covered Officers or with respect to all types of Recoverable Incentive Compensation.

(e)No Indemnification of Covered Officers. Notwithstanding any indemnification agreement, applicable insurance policy or any other agreement or provision of the Company’s certificate of incorporation or bylaws to the contrary, no Covered Officer shall be entitled to indemnification or advancement of expenses in connection with any enforcement of this Policy by the Company, including paying or reimbursing such Covered Officer for insurance premiums to cover potential obligations to the Company under this Policy.

(f)Indemnification of Administrator. Any members of the Administrator, and any other

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members of the Board who assist in the administration of this Policy, shall not be personally liable for any action, determination or interpretation made with respect to this Policy and shall be indemnified by the Company to the fullest extent under applicable law and Company policy with respect to any such action, determination or interpretation. The foregoing sentence shall not limit any other rights to indemnification of the members of the Board under applicable law or Company policy.

(g)No “Good Reason” for Covered Officers. Any action by the Company to recoup or any recoupment of Recoverable Incentive Compensation under this Policy from a Covered Officer shall not be deemed (i) “good reason” for resignation or to serve as a basis for a claim of constructive termination under any benefits or compensation arrangement applicable to such Covered Officer, or (ii) to constitute a breach of a contract or other arrangement to which such Covered Officer is party.

5.Administration

Except as specifically set forth herein, this Policy shall be administered by the Administrator. The Administrator shall have full and final authority to make any and all determinations required under this Policy. Any determination by the Administrator with respect to this Policy shall be final, conclusive and binding on all interested parties and need not be uniform with respect to each individual covered by this Policy. In carrying out the administration of this Policy, the Administrator is authorized and directed to consult with the full Board or such other committees of the Board as may be necessary or appropriate as to matters within the scope of such other committee’s responsibility and authority. Subject to applicable law, the Administrator may authorize and empower any officer or employee of the Company to take any and all actions that the Administrator, in its sole discretion, deems necessary or appropriate to carry out the purpose and intent of this Policy (other than with respect to any recovery under this Policy involving such officer or employee).

6.Severability

If any provision of this Policy or the application of any such provision to a Covered Officer shall be adjudicated to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Policy, and the invalid, illegal or unenforceable provisions shall be deemed amended to the minimum extent necessary to render any such provision or application enforceable.

7.No Impairment of Other Remedies

Nothing contained in this Policy, and no recoupment or recovery as contemplated herein, shall limit any claims, damages or other legal remedies the Company or any of its affiliates may have against a Covered Officer arising out of or resulting from any actions or omissions by the Covered Officer. This Policy does not preclude the Company from taking any other action to enforce a Covered Officer’s obligations to the Company, including, without limitation, termination of employment and/or institution of civil proceedings. This Policy is in addition to the requirements of Section 304 of the Sarbanes-Oxley Act of 2002 (“SOX 304”) that are applicable to the Company’s Chief Executive Officer and Chief Financial Officer and to any other compensation recoupment policy and/or similar provisions in any employment, equity plan, equity award, or other individual agreement, to which the Company is a party or which the Company has adopted or may adopt and maintain from time to time; provided, however, that compensation recouped pursuant to this Policy shall not be duplicative of compensation recouped pursuant to SOX 304 or any such compensation recoupment policy and/or similar provisions in any such employment, equity plan, equity award, or other individual agreement except as may be required by law.

8.Amendment; Termination

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The Administrator may amend, terminate or replace this Policy or any portion of this Policy at any time and from time to time in its sole discretion. The Administrator shall amend this Policy as it deems necessary to comply with applicable law or any Listing Standard.

9.Successors

This Policy shall be binding and enforceable against all Covered Officers and, to the extent required by Rule 10D-1 and/or the applicable Listing Standards, their beneficiaries, heirs, executors, administrators or other legal representatives.

10. Required Filings

The Company shall make any disclosures and filings with respect to this Policy that are required by law, including as required by the SEC.

* * * * *

5

Quince Therapeutics, Inc.

Incentive Compensation Recoupment Policy

Form of Executive Acknowledgment

I, the undersigned, agree and acknowledge that I am bound by, and subject to, the Quince Therapeutics, Inc. Incentive Compensation Recoupment Policy, as may be amended, restated, supplemented or otherwise modified from time to time (the “Policy”). In the event of any inconsistency between the Policy and the terms of any employment agreement, offer letter or other individual agreement with Quince Therapeutics, Inc. (the “Company”) to which I am a party, or the terms of any compensation plan, program or agreement, whether or not written, under which any compensation has been granted, awarded, earned or paid to me, the terms of the Policy shall govern.

In the event that the Administrator (as defined in the Policy) determines that any compensation granted, awarded, earned or paid to me must be forfeited or reimbursed to the Company pursuant to the Policy, I will promptly take any action necessary to effectuate such forfeiture and/or reimbursement. I further agree and acknowledge that I am not entitled to indemnification, and hereby waive any right to advancement of expenses, in connection with any enforcement of the Policy by the Company.

Agreed and Acknowledged:

Name: _________________

Title: _________________

Date:

XML

Document and Entity Information - USD ($)
$ in Millions

12 Months Ended

Dec. 31, 2023

Mar. 25, 2024

Jun. 30, 2023

Document Type

10-K

Amendment Flag

false

Document Period End Date

Dec. 31, 2023

Document Fiscal Year Focus

2023

Document Fiscal Period Focus

FY

Entity Registrant Name

Quince Therapeutics, Inc.

Entity Central Index Key

0001662774

Current Fiscal Year End Date

--12-31

Entity Filer Category

Non-accelerated Filer

Entity Well-known Seasoned Issuer

No

Entity Voluntary Filers

No

Entity Current Reporting Status

Yes

Entity Common Stock, Shares Outstanding

43,215,233

Entity Public Float

$ 50

Entity File Number

001-38890

Entity Tax Identification Number

90-1024039

Entity Address, Address Line One

611 Gateway Boulevard, Suite 273

Entity Address, City or Town

South San Francisco

Entity Address, State or Province

CA

Entity Address, Postal Zip Code

94080

City Area Code

415

Local Phone Number

910-5717

Document Annual Report

true

Document Transition Report

false

Entity Incorporation, State or Country Code

DE

Entity Interactive Data Current

Yes

Entity Small Business

true

Entity Emerging Growth Company

false

Entity Shell Company

false

ICFR Auditor Attestation Flag

false

Document Financial Statement Error Correction [Flag]

false

Documents Incorporated by Reference

Part III incorporates by reference certain information from the registrant’s definitive proxy statement (the “Proxy Statement”) relating to its 2024 Annual Meeting of Stockholders. The Proxy Statement will be filed with the United States Securities and Exchange Commission within 120 days after the end of the fiscal year to which this report relates.

Auditor Firm ID

243

Audior name

BDO USA, P.C.

Auditor location

San Jose, California

Common Stock

Trading Symbol

QNCX

Security Exchange Name

NASDAQ

Title of 12(b) Security

Common Stock, par value $0.001 per share

Series A Junior Participating Preferred Purchase Rights

No Trading Symbol Flag

true

Security Exchange Name

NASDAQ

Title of 12(b) Security

Series A Junior Participating Preferred Purchase Rights

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Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 20,752	$ 44,579
Short term investments	54,307	45,602
Prepaid expenses and other current assets	2,381	3,567
Total current assets	77,440	93,748
Assets held for sale	10	0
Property and equipment, net	234	393
Operating lease right-of-use assets	385	291
Long term investments	0	3,578
Goodwill	17,625	0
Intangible asset	63,672	5,900
Other assets	8,456	0
Equity investments in Lighthouse Pharmaceuticals, Inc.	78	0
Total assets	167,900	103,910
Current liabilities:
Accounts payable	2,033	570
Short term contingent consideration	4,103	0
Accrued expenses and other current liabilities	3,436	2,499
Total current liabilities	9,572	3,069
Long - term debt	13,429	0
Long-term operating lease liabilities	321	0
Long term contingent consideration	53,603	0
Deferred tax liabilities	5,304	248
Other long-term liabilities	587	0
Total liabilities	82,816	3,317
Commitments and contingencies (See Note 8)
Stockholders’ equity:
Preferred stock, $0.001 par value, 10,000,000 authorized (100,000 shares of which are designated as Series A Junior Participating Preferred Stock), no shares issued and outstanding as of December 31, 2023 and 2022, respectively	0	0
Common stock, $0.001 par value, 100,000,000 shares authorized, 42,973,215 and 36,136,480 issued and outstanding as of December 31, 2023 and 2022, respectively	43	36
Additional paid in capital	401,638	389,105
Accumulated other comprehensive income (loss)	3,047	(289)
Accumulated deficit	(319,644)	(288,259)
Total stockholders’ equity	85,084	100,593
Total liabilities and stockholders’ equity	$ 167,900	$ 103,910

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Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2023	Dec. 31, 2022
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares	42,973,215	36,136,480
Common stock, shares outstanding	42,973,215	36,136,480
Series A Preferred Stock
Preferred stock, shares authorized	100,000	100,000

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Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Operating expenses:
Research and development	$ 9,447	$ 25,178
General and administrative	17,695	26,012
Goodwill impairment charge	0	825
Intangible asset impairment charge	5,900	0
Fair value adjustment for contingent consideration	1,578	0
Total operating expenses	34,620	52,015
Loss from operations	(34,620)	(52,015)
Fair value adjustment for long-term debt	(338)	0
Interest income	3,478	1,068
Other expense, net	(102)	(997)
Net loss before income tax benefit	(31,582)	(51,944)
Income tax benefit	197	284
Net loss	(31,385)	(51,660)
Other comprehensive income (loss):
Foreign currency translation adjustments	2,789	248
Unrealized gain (loss) on available-for-sale securities	547	(458)
Total comprehensive loss	$ (28,049)	$ (51,870)
Net loss per share - basic	$ (0.84)	$ (1.54)
Net loss per share - diluted	$ (0.84)	$ (1.54)
Weighted average shares of common stock outstanding - basic	37,237,149	33,496,534
Weighted average shares of common stock outstanding - diluted	37,237,149	33,496,534

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Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Total	Common Stock	Additional Paid in Capital	Accumulated Other Comprehensive Income / (Loss)	Accumulated Deficit
Beginning balance at Dec. 31, 2021	$ 118,586	$ 30	$ 355,234	$ (79)	$ (236,599)
Beginning balance, shares at Dec. 31, 2021		30,074,412
Issuance of common stock , net of issuance costs	608		608
Issuance of common stock , net of issuance costs, shares		51,769
Issuance of common stock on exercise of stock options and vesting of restricted stock units	148		148
Issuance of common stock on exercise of stock options and vesting of restricted stock units, shares		490,299
Stock based compensation	16,618		16,618
Value of share Issued in connection with acquisition	16,503	$ 6	16,497
Share issuance in connection with acquisition		5,520,000
Foreign currency translation adjustments	248			248
Unrealized gain (loss) on available for sale investments	(458)			(458)
Net loss	(51,660)				(51,660)
Ending balance at Dec. 31, 2022	100,593	$ 36	389,105	(289)	(288,259)
Ending balance, shares at Dec. 31, 2022		36,136,480
Issuance of common stock on exercise of stock options and vesting of restricted stock units	167		167
Issuance of common stock on exercise of stock options and vesting of restricted stock units, shares		374,713
Restricted stock award forfeiture	(18)		(18)
Restricted stock award forfeiture, Shares		(63,293)
Stock based compensation	5,220		5,220
Value of share Issued in connection with acquisition	7,171	$ 7	7,164
Share issuance in connection with acquisition		6,525,315
Foreign currency translation adjustments	2,789			2,789
Unrealized gain (loss) on available for sale investments	547			547
Net loss	(31,385)				(31,385)
Ending balance at Dec. 31, 2023	$ 85,084	$ 43	$ 401,638	$ 3,047	$ (319,644)
Ending balance, shares at Dec. 31, 2023		42,973,215

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Consolidated Statements of Stockholders' Equity (Parenthetical) $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($)
Private Placement
Stock issuance costs	$ 19

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Cash flows from operating activities
Net Loss	$ (31,385)	$ (51,660)
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash rent expense	0	(29)
Stock based compensation	5,220	16,618
Depreciation and amortization	322	204
Impairment loss on operating lease	66	136
Gain on sale of Legacy Assets	(78)	0
Loss on disposal of fixed assets	37	94
Change in the fair value of contingent consideration liabilities	1,578	0
Change in fair value of EIB loan	338	0
Non-cash goodwill impairment charge	0	825
Non-cash intangible impairment charge	5,900	0
Amortization of discount on available-for-sale investments	(2,019)	(113)
Change in deferred tax liabilities due to acquisition of Novosteo, Inc.	(248)	(284)
Changes in operating assets and liabilities, net of acquisitions:
Prepaid expenses and other current assets	4,246	2,580
Other assets	(9)	194
Accounts payable	(288)	(5,943)
Accrued expenses and other current liabilities	(1,972)	(6,660)
Net cash used in operating activities	(18,292)	(44,038)
Cash flow from investing activities:
Purchase of investments	(113,781)	(75,021)
Proceeds from maturities of investments	111,209	82,493
Cash acquired from Novosteo, Inc.	0	10,593
Advancement of notes receivable	(1,000)	0
Cash paid in acquisition of EryDel S.p.A. net of cash acquired	(2,116)	0
Proceeds from disposal of assets	90	70
Purchase of property and equipment	(160)	(133)
Net cash provided by (used in) investing activities	(5,758)	18,002
Cash flows from financing activities:
Payments of finance leases	(6)	(49)
Proceeds from issuance of common stock upon exercise of stock options	149	148
Proceeds from issuance of common stock in connection with open market sales agreement, net of issuance costs	0	608
Net cash provided by financing activities	143	707
Effect of exchange rate changes on cash	80	184
Net decrease in cash and cash equivalents	(23,827)	(25,145)
Cash and cash equivalents at beginning of period	44,579	69,724
Cash and cash equivalents at end of period	20,752	44,579
Supplemental disclosures of non-cash information:
Right-of-use assets obtained in exchange for new operating lease liabilities	0	411
Right-of-use asset and financing lease liability reduction as a result of lease modification	(70)	0
Right-of-use asset and operating lease liability reduction as a result of lease modification	0	(640)
EryDel
Supplemental disclosures of non-cash information:
Net assets acquired in exchange for common stock	63,732	0
Novosteo
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash goodwill impairment charge		800
Supplemental disclosures of non-cash information:
Net assets acquired in exchange for common stock	$ 0	$ 16,503

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Organization

12 Months Ended

Dec. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization

Note 1. Organization

Description of Business

Effective August 1, 2022, Cortexyme Inc. changed its name to Quince Therapeutics, Inc (the "Company"). The Company was incorporated in the State of Delaware in June 2012 and is headquartered in South San Francisco, California.

From its inception, the Company has been focused on novel therapeutic approaches to improve the lives of patients diagnosed with Alzheimer’s and other degenerative diseases. The predecessor company, Cortexyme, Inc. was initially founded on the seminal discovery of the presence of Porphyromonas gingivalis, and its secreted toxic virulence factor proteases, called gingipains, in the relevant brain areas of both Alzheimer's and Parkinson's disease patients. In May 2022, the Company completed the acquisition of Novosteo focused on targeted therapeutics to treat rare skeletal diseases, bone fractures and injury. In 2023, the Company decided to discontinue the internal development of NOV004, which was acquired in the acquisition of Novosteo, and terminated the related license.

On October 20, 2023, the Company completed the acquisition of EryDel, a privately held, late-stage biotechnology company with a Phase 3 lead asset, EryDex, that targets the potential treatment of a rare neurodegenerative disease, A-T.

Novosteo Acquisition

On May 9, 2022, the Company entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”) with Novosteo, Quince Merger Sub I, Inc., a Delaware corporation and a wholly owned subsidiary of the Company, Quince Merger Sub II, LLC, a Delaware limited liability company and a wholly owned subsidiary of Company, Novosteo, and Fortis Advisors LLC, a Delaware limited liability company, solely in its capacity as the securityholders’ representative. The transaction closed on May 19, 2022. Pursuant to the terms of the Merger Agreement, at the closing of the Novosteo Acquisition, each share of capital stock of Novosteo that was issued and outstanding immediately prior to the Effective Time was automatically cancelled and converted into the right to receive 0.0911 shares of common stock, par value $0.001 per share, of the Company. The Company issued 5,520,000 shares and assumed 507,108 outstanding Novosteo options after conversion with the awards, retaining the same vesting and other terms and conditions as in effect immediately prior to consummation of the Novosteo Acquisition.

Pursuant to the Merger Agreement, upon the terms and subject to the conditions set forth therein, Merger Sub I merged with and into Novosteo (the “First Merger”), with Novosteo as the surviving entity in the First Merger (the “First Step Surviving Corporation”). Immediately following the First Merger, the First Step Surviving Corporation merged with and into Merger Sub II, with Merger Sub II surviving the Acquisition. Merger Sub II was renamed Novosteo, LLC and is a wholly-owned single member limited liability corporation.

Sale of Legacy Portfolio

On January 27, 2023, we sold our legacy small molecule protease inhibitor portfolio, including COR588, COR388, COR852, and COR803, pursuant to an asset purchase agreement with Lighthouse Pharmaceuticals, Inc., (the "Purchaser" or "Lighthouse") an entity co-founded by Casey Lynch, former chief executive officer of Cortexyme. Lighthouse is a variable interest entity but the Company is not the primary beneficiary.

Upon the consummation of the transaction, we received shares of common stock of Purchaser (“Common Stock”) equal to seven and a half percent (7.5%) of the currently issued and outstanding Common Stock. The issuance is governed by a Stock Issuance Agreement entered into by us and the Purchaser on January 27, 2023 (the “Stock Agreement”).

Pursuant to the terms of the asset purchase agreement, we are eligible to receive milestone payments up to $150 million on a product by product basis for the achievement of certain regulatory approvals and global net sales thresholds. Additionally, we are eligible to receive certain sales-based royalty payments on a product by product basis, ranging from high single-digit to mid-teens of annual net sales related to the two existing clinical stage programs, and low single-digit royalties for the preclinical programs, and certain sublicense income on a product by product basis, either in addition to milestone payments and royalties prior to Phase 2 initiation for COR588 or COR388, or in lieu of milestones payments and royalties after initiation of Phase 2 for COR588 or COR388 or for the preclinical programs.

EryDel Acquisition

On October 20, 2023, we completed our acquisition of EryDel, a privately held, late-stage biotechnology company with a Phase 3 lead asset, EryDex, that targets the potential treatment of a rare neurodegenerative disease, A-T.

The EryDel Acquisition was completed pursuant to that certain Stock Purchase Agreement, dated as of July 21, 2023. Pursuant to the terms of the Purchase Agreement, the Company issued 6,525,315 shares of its common stock to the EryDel Shareholders. Up to an additional 725,037 shares of the Company's common stock may be issued to the EryDel Shareholders upon the first anniversary of the closing of the EryDel Acquisition. The EryDel Shareholders have a contingent right to receive up to an aggregate of $485.0 million in potential cash payments, comprised of up to $5.0 million upon the achievement of a specified development milestone, $25.0 million at NDA acceptance by the FDA, up to $60.0 million upon the achievement of specified approval milestones, and up to $395.0 million upon the achievement of specified on market and sales milestones, with no royalties paid to EryDel. EryDel is a variable interest entity and the Company is the primary beneficiary and sole shareholder. Refer to Note 15 Business Combination for additional details.

Liquidity and Capital Resources

The Company has incurred losses and negative cash flows from operations since inception and expects to continue to generate operating losses for the foreseeable future. As of December 31, 2023, the Company had an accumulated deficit of $319.6 million. Since inception through December 31, 2023, the Company has funded operations primarily with the net proceeds from the issuance of convertible promissory notes, from the issuance of redeemable convertible preferred stock, from the net proceeds from the IPO and from the net proceeds from the PIPE Financing. As of December 31, 2023, the Company had cash, cash equivalents, and short-term investments of $75.1 million, which it believes will be sufficient to fund its planned operations for a period of at least 12 months from the date of the issuance of the accompanying consolidated financial statements.

Management expects to incur additional losses in the future to fund the Company's operations and conduct product research and development and may need to raise additional capital to fully implement its business plan. The Company may raise additional capital through the issuance of equity securities, debt financings or other sources including out-licensing or partnerships, in order to further implement its business plan. However, if such financing is not available when needed and at adequate levels, the Company will need to reevaluate its operating plan and may be required to delay the development of its product candidates.

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Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2023

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note 2. Summary of Significant Accounting Policies

Basis of Consolidation

The accompanying consolidated financial statements include the accounts of Quince Therapeutics, Inc. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation.

Basis of Presentation

The accompanying consolidated financial statements and the notes thereto have been prepared in accordance with accounting principles GAAP pursuant to the instructions of the SEC on Form 10-K through the rules and interpretive releases of the SEC under federal securities law.

Use of Estimates

The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and expenses, as well as related disclosure of contingent assets and liabilities. The most significant estimates used in the Company’s consolidated financial statements relate to the determination of the fair value of stock-based awards and other issuances, determination of the fair value of identifiable assets and liabilities in connection with the acquisition of Novosteo, Inc. and EryDel S.p.A., including associated intangible assets and goodwill, contingent consideration, accruals for research and development costs, useful lives of long-lived assets, stock-based compensation and related assumptions, the incremental borrowing rate for leases and income tax uncertainties, including a valuation allowance for deferred tax assets, eligibility of expenses for the Australia research and development refundable tax credits, impairment of intangible assets or goodwill; and contingencies. The Company bases its estimates on historical experience and on various other market specific and other relevant assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ materially from the Company’s estimates.

Foreign Currency Translation and Transactions

The functional currency of the Company’s wholly-owned subsidiaries are the Australian Dollar and the Euro. The Company's financial results and financial position are translated into U.S. dollars using exchange rates at balance sheet dates for assets and liabilities and using average exchange rates for income and expenses. The resulting translation differences are presented as a separate component of accumulated other comprehensive loss, as a separate component of equity.

Foreign currency transactions are translated into the functional currencies using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses, resulting from the settlement of such transactions and from the re-measurement of monetary assets and liabilities denominated in foreign currencies using exchange rates at balance sheet date and non-monetary assets and liabilities using historical exchange rates, are recognized in the consolidated statements of operations and comprehensive income.

Risk and Uncertainties

The Company’s future results of operations involve a number of risks and uncertainties. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, uncertainty of results of clinical trials and reaching milestones, uncertainty of regulatory approval of the Company’s drug candidates, uncertainty of market acceptance of the Company’s drug candidates, competition from substitute products and larger companies, securing and protecting proprietary technology, strategic relationships and dependence on key individuals and sole source suppliers. The Company’s drug candidates will require approvals from the FDA and comparable foreign regulatory agencies prior to commercial sales in their respective jurisdictions. There can be no assurance that any drug candidate will receive the necessary approvals.

Segments

The Company operates and manages its business as one reportable and operating segment, which is the business of developing and commercializing therapeutics. The Company’s chief executive officer, who is the chief operating decision maker, reviews financial information on an aggregate basis for purposes of allocating and evaluating financial performance. All long-lived assets are maintained in Italy.

Business Combinations

The Company evaluates acquisitions of assets and other similar transactions to assess whether or not the transaction should be accounted for as a business combination or asset acquisition by first applying a screen to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If the screen is met, the transaction is accounted for as an asset acquisition. If the screen is not met, further determination is required as to whether or not the Company has acquired inputs and processes that have the ability to create outputs, which would meet the requirements of a business.

The Company accounts for business combinations using the acquisition method pursuant to the FASB ASC Topic 805. This method requires, among other things, that results of operations of acquired companies are included in the Company's financial results beginning on the respective acquisition dates, and that identifiable assets acquired and liabilities assumed are recognized at fair value as of the acquisition date. Intangible assets acquired in a business combination are recorded at fair value using one of three valuation approaches, the income approach, the market approach or the cost approach. The Company reviewed the three valuation approaches and determined the income approach was the most appropriate model to approximate fair value for both the Novosteo and EryDel Acquisitions. The income approach model requires assumptions about the timing and amount of future net cash flows, the cost of capital and terminal values from the perspective of a market participant. Any excess of the fair value of consideration transferred (the “Purchase Price”) over the fair values of the net assets acquired is recognized as goodwill. The fair value of identifiable assets acquired and liabilities assumed in certain cases may be subject to revision based on the final determination of fair value during a period of time not to exceed 12 months from the acquisition date. Legal costs, due diligence costs, business valuation costs and all other acquisition-related costs are expensed when incurred.

Intangible Assets

Intangible assets with a definite useful life are amortized on a straight-line basis over the estimated useful life of the related assets. Intangible assets with an indefinite useful life are not amortized. Intangible assets acquired in a business combination that are used in research and development activities (regardless of whether they have an alternative future use) shall be considered indefinite lived until the completion or abandonment of the associated research and development efforts. Intangible assets acquired in a business combination are initially recorded at fair value. During the period that those assets are considered indefinite lived, they shall not be amortized but shall be tested for impairment. Once the research and development efforts are completed or abandoned, the entity shall determine the useful life of the assets. An intangible asset shall be tested for impairment annually and more frequently if events or

changes in circumstances indicate that it is more likely than not that the asset is impaired. The Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of the intangible asset is less than its carrying amount, If that is the case, the Company performs a quantitative impairment test, and, if the carrying amount of the Company exceeds its fair value, then the Company will recognize an impairment charge for the amount by which its carrying amount exceeds its fair value, not to exceed the carrying amount of the intangible asset. Qualitative factors to be considered include but are not limited to:

•Cost factors such as increases in raw materials, labor, or other costs that have a negative effect on future expected earnings and cash flows.

•Legal/regulatory factors or progress and results of clinical trials.

•Other relevant entity-specific events such as changes in management, key personnel, strategy, or customers; contemplation of bankruptcy; or litigation that could affect significant inputs used to determine the fair value of the indefinite-lived intangible asset.

•Industry and market considerations such as a deterioration in the environment in which an entity operates, an increased competitive environment.

•Macroeconomic conditions such as deterioration in general economic conditions, limitations on accessing capital, fluctuations in foreign exchange rates, or other developments in equity and credit markets that could affect significant inputs used to determine the fair value of the indefinite-lived intangible asset.

Goodwill

Goodwill represents the excess of the purchase price over the fair value of the net assets acquired as of the acquisition date. Goodwill has an indefinite useful life and is not amortized. The Company reviews its goodwill for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of the Company may exceed its fair value. The Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of the Company is less than its carrying amount, including goodwill. If that is the case, the Company performs a quantitative impairment test, and, if the carrying amount of the Company exceeds its fair value, then the Company will recognize an impairment charge for the amount by which its carrying amount exceeds its fair value, not to exceed the carrying amount of the goodwill.

Contingent Consideration

The Company determines the acquisition date fair value of contingent consideration using a discounted cash flow method, with significant inputs that are not observable in the market and thus represents a Level 3 fair value measurement as defined in ASC Topic 820, Fair Value Measurement. The significant inputs in the Level 3 measurement not supported by market activity included our probability assessments of expected future cash flows related to the Company's acquisition of EryDel in October 2023, during the contingent consideration period, appropriately discounted considering the uncertainties associated with the earnout obligation, and calculated in accordance with the terms of the definitive agreement. The liabilities for the contingent consideration are established at the time of the acquisition and will be evaluated on a quarterly basis based on additional information as it becomes available. Any change in the fair value adjustment is recorded in the earnings of that period. During the year ended December 31, 2023, the Company recorded a $1.6 million adjustment to increase the fair value of its contingent consideration related to the acquisition of EryDel. The adjustment is reflected within operating loss on the consolidated statement of operations and comprehensive loss. Changes in the fair value of the contingent consideration obligations may result from changes in probability assumptions with respect to the likelihood of achieving the various contingent payment obligations. Significant increases or decreases in the inputs noted above in isolation would result in a significantly lower or higher fair value measurement.

Cash, Cash Equivalents and Investments

The Company considers all highly liquid investments with maturities of three months or less when purchased to be cash equivalents. Cash equivalents include marketable securities. Management determines the appropriate classification of its investments in debt securities at the time of purchase and at the end of each reporting period. Investments with original maturities beyond three months at the date of purchase and which mature at, or less than twelve months from the balance sheet date are classified as short-term investments. Investments with a maturity beyond twelve months from the balance sheet date are classified as long-term investments. Collectively, cash equivalents, short-term investments and long-term investments are considered available-for-sale and are recorded at fair value. Unrealized gains and losses are recorded as a component of other comprehensive loss in the consolidated statements of operations and included as a separate component of consolidated statements of stockholders’ equity (deficit). Realized gains and losses are included in interest income in the consolidated statements of operations and comprehensive loss.

Premiums (discounts) are amortized (accreted) over the life of the related investment as an adjustment to yield using the straight-line interest method. Dividend and interest income are recognized when earned. These amounts are recorded in “interest income” in the consolidated statements of operations and comprehensive loss.

Property and Equipment, Net

Property and equipment are stated at cost and reduced by accumulated depreciation. Depreciation expense is recognized using the straight-line method over the estimated useful lives of the respective assets. Depreciation and amortization begin at the time the asset is placed in service. Maintenance and repairs are charged to expense as incurred, and improvements are capitalized. When assets are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the consolidated balance sheet and any resulting gain or loss is reflected in operations in the period realized.

The useful lives of property and equipment are as follows:

Computer equipment	3 years
Lab equipment	2.5 to 5 years
Finance lease right of use assets	Shorter of estimated useful life or lease term
Leasehold improvement	Shorter of estimated useful life or lease term
Office furniture	4 to 5 years

Concentration of Credit Risk

Cash equivalents, short-term and long-term investments are financial instruments that potentially subject the Company to concentrations of credit risk. The Company invests in money market funds, repurchase agreements, treasury bills and notes, government bonds, and corporate notes. The Company limits its credit risk associated with cash equivalents, short-term and long-term investments by placing them with banks and institutions it believes are highly credit worthy and in highly rated investments. However, cash balances in excess of Federal Deposit Insurance Corporation (FDIC) insured limit of $0.3 million are at risk.

Impairment of Long-Lived Assets

The Company reviews long-lived assets, including property and equipment, for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. An impairment charge would be recorded when estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying amount. Impairment, if any, is assessed using discounted cash flows or other appropriate measures of fair value.

The Company recognized impairment charges of $0.2 million related to the San Diego lease impairment loss and loss on disposal of fixed assets for the year ended December 31, 2022. The Company recognized an impairment charge $0.1 million for the Purdue lease the year ended December 31, 2023.

Leases

The Company determines if an arrangement includes a lease at inception. Right-of-use lease assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. The right-of-use lease asset includes any lease payments made and excludes lease incentives. Incremental borrowing rate is used in determining the present value of future payments. The Company applies a portfolio approach to the property leases to apply an incremental borrowing rate to leases with similar lease terms. The lease terms may include options to extend or terminate the lease. The Company recognizes the options to extend the lease as part of the right-of-use lease assets and lease liabilities only if it is reasonably certain that the option would be exercised. Lease expense for minimum lease payments is recognized on a straight-line basis over the non-cancelable lease term.

Research and Development Expenses

Research and development costs are expensed as incurred. Research and development expenses consist primarily of personnel costs for the Company’s research and product development employees. Also included are non-personnel costs such as professional fees payable to third parties for preclinical and clinical studies and research services, laboratory supplies and equipment maintenance, product licenses, and other consulting costs. The Company estimates preclinical and clinical study and research expenses based on the services performed, pursuant to contracts with CROs that conduct and manage preclinical and clinical studies and research services on its behalf. Expenses related to clinical studies are based on estimates of the services received and efforts

expended pursuant to contracts with many research institutions, clinical research organizations and other service providers that conduct and manage clinical studies on the Company's behalf. The financial terms of these agreements are subject to negotiation and vary from contract to contract and may result in uneven payment flows. Generally, these agreements set forth the scope of work to be performed at a fixed fee or unit price. Payments under the contracts are mainly driven by time and materials incurred by these service providers. Payments made to third parties under these arrangements in advance of the performance of the related services by the third parties are recorded as prepaid expenses until the services are rendered. Expenses related to clinical studies are generally recorded based on the timing of when services that have been performed on the Company’s behalf by the service providers, clinical trial budgets and in accordance with the contracts and related amendments. The determination of timing involves reviewing open contracts and purchase orders, communicating with applicable personnel to identify the timing of when services that have been performed on the Company’s behalf and estimating the level of service performed and the associated cost incurred for the service when the Company has not yet been invoiced or otherwise notified of actual cost. The Company periodically confirms the accuracy of estimates with the service providers and makes adjustments if necessary. Examples of estimated clinical expenses include:

•fees paid to CROs in connection with clinical studies;

•fees paid to investigative sites in connection with clinical studies;

•fees paid to contract manufacturers in connection with the production of clinical study materials; and

•fees paid to vendors in connection with preclinical development activities.

If the actual timing of the performance of services or the level of effort varies from the original estimates, the Company will adjust the prepaid or accrual accordingly. Payments associated with licensing agreements to acquire exclusive licenses to develop, use, manufacture and commercialize products that have not reached technological feasibility and do not have alternate commercial use are expensed as incurred.

Patent Costs

The Company has no historical data to support a probable future economic benefit for the arising patent applications, filing and prosecution costs. Therefore, patent costs are expensed as incurred.

Stock-Based Compensation

The Company accounts for stock-based compensation arrangements with employees in accordance with ASC 718, Compensation—Stock Compensation. Stock-based awards granted include stock options with service-based vesting. ASC 718 requires the recognition of compensation expense, using a fair value-based method, for costs related to all stock-based payments. The Company’s determination of the fair value of stock options with service-based vesting on the date of grant utilizes the Black-Scholes option-pricing model and is impacted by its common stock price as well as other variables including: but not limited to, expected term that options will remain outstanding, expected common stock price volatility over the term of the option awards, risk-free interest rates and expected dividends. The fair value of a stock-based award is recognized over the period during which an optionee is required to provide services in exchange for the option award, known as the requisite service period (usually the vesting period) on a straight-line basis. Stock-based compensation expense is recognized based on the fair value determined on the date of grant and is reduced for forfeitures as they occur. Stock options exercised are issued new shares of our common stock.

Income Taxes

The Company accounts for income taxes under the asset and liability method. Current income tax expense or benefit represents the amount of income taxes expected to be payable or refundable for the current year. Deferred income tax assets and liabilities are determined based on differences between the consolidated financial statement reporting and tax bases of assets and liabilities and net operating loss and credit carryforwards and are measured using the enacted tax rates and laws that will be in effect when such items are expected to reverse. Deferred income tax assets are reduced, as necessary, by a valuation allowance when management determines it is more likely than not that some or all of the tax benefits will not be realized.

The Company accounts for uncertain tax positions in accordance with ASC 740-10, Accounting for Uncertainty in Income Taxes. The Company assesses all material positions taken in any income tax return, including all significant uncertain positions, in all tax years that are still subject to assessment or challenge by relevant taxing authorities. Assessing an uncertain tax position begins with the initial determination of the position’s sustainability and is measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. As of each balance sheet date, unresolved uncertain tax positions must be reassessed, and the Company will determine whether (i) the factors underlying the sustainability assertion have changed and (ii) the amount of the recognized tax benefit is still appropriate. The recognition and measurement of tax benefits requires significant judgment. Judgments concerning the recognition and measurement of a tax benefit might change as new information becomes available.

The Company includes any penalties and interest expense related to income taxes as a component of other expense, net and interest expense, net, as necessary.

Comprehensive Loss

The Company is required to report all components of comprehensive loss, including net loss, in the consolidated financial statements in the period in which they are recognized. Comprehensive loss is defined as a change in equity of a business enterprise during a period, resulting from transactions and other events and circumstances from non-owner sources. The Company had an unrealized gain and loss from its available-for sale securities and cumulative translation adjustment during the years ended December 31, 2023 and December 31, 2022, respectively, which are considered other comprehensive loss.

Net Loss per Share

Basic net loss per share is calculated by dividing the net loss by the weighted-average number of common shares outstanding during the period, without consideration for potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares and common share equivalents of potentially dilutive securities outstanding for the period. For purposes of the diluted net loss per share calculation and common stock options are considered to be potentially dilutive securities. Because the Company reported a net loss for the years ended December 31, 2023 and December 31, 2022, and the inclusion of the potentially dilutive securities would be antidilutive, diluted net loss per share is the same as basic net loss per share for both periods.

Recent Accounting Pronouncements Adopted

Financial Instruments—Credit Losses: In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments which amends the principles around the recognition of credit losses by mandating entities incorporate an estimate of current expected credit losses when determining the value of certain assets. The guidance also amends reporting around allowances for credit losses on available-for-sale marketable securities. In November 2019, the FASB issued ASU 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815) and Leases (Topic 842): Effective Dates, which established that a one-time determination of the effective date for ASU 2016-13 would be based on the Company’s SEC reporting status as of November 15, 2019. The Company was a “smaller reporting company” as defined by Item 10 of Regulation S-K, and therefore, ASU 2016-13 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. This guidance helps to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in Topic 326 replace the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The Company has adopted the new guidance as of January 1, 2023, and it did not have a material impact on its consolidated financial statements and related disclosures.

For available-for-sale debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value and recognized in interest and other income, net in the statement of operations and comprehensive loss. If neither criteria is met, the Company evaluates whether the decline in fair value is related to credit-related factors or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. Credit-related impairment losses, limited by the amount that the fair value is less than the amortized cost basis, are recorded through an allowance for credit losses in interest and other income, net.

Any unrealized losses from declines in fair value below the amortized cost basis as a result of non-credit factors are recognized in accumulated other comprehensive loss, net of tax as a separate component of stockholders’ equity, along with unrealized gains. Realized gains and losses and declines in fair value, if any, on available-for-sale securities are included in interest and other income, net in the statement of operations and comprehensive loss.

For purposes of identifying and measuring credit-related impairments, the Company’s policy is to exclude applicable accrued interest from both the fair value and amortized cost basis of the related security. The Company has elected to write-off uncollectible accrued interest receivable balances in a timely manner, which is defined by the Company as when interest due becomes 90 days delinquent. The accrued interest write-off will be recorded by reversing interest income. Accrued interest receivable is recorded in other current assets on the balance sheets.

Recent Accounting Pronouncements Not Yet Adopted

The following are new accounting pronouncements that the Company is evaluating for future impacts on its consolidated financial statements:

Improvements to Income Tax Disclosures (ASC 740); In December 2023, the FASB issued ASU No. 2023-09, "Improvements to Income Tax Disclosures." This ASU establishes new income tax disclosure requirements in addition to modifying and eliminating certain existing requirements. Under this ASU, entities must consistently categorize and provide greater disaggregation of information in the rate reconciliation. They must also further disaggregate income taxes paid. The ASU is effective in December 2024 under a prospective approach. Early adoption is permitted. Adoption of this ASU is not expected to have a material impact on the Company's consolidated financial statements.

Accounting Standard Update 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”): In November 2023, the FASB issued ASU 2023-07, which is intended to improve reportable segment disclosure requirements, primarily through additional disclosures about significant segment expenses, including for single reportable segment entities. The standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments should be applied retrospectively to all prior periods presented in the financial statements. The Company is evaluating the disclosure requirements related to the new standard.

All other newly issued accounting pronouncements not yet effective have been deemed either immaterial or not applicable.

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Fair Value Measurements

12 Months Ended

Dec. 31, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note 3. Fair Value Measurements

The fair value of the Company's financial instruments reflects the amounts that the company estimates would receive in connection with the sale of an asset or pay in connection with the transfer of a liability in an orderly transaction between market participants at the measurement date (exit price). The Company discloses and recognizes the fair value of the assets and liabilities using a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). The guidance establishes three levels of the fair value hierarchy as follows:

Level 1 - Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2 - Inputs other than quoted prices that are observable for the assets or liability either directly or indirectly, including inputs in markets that are not considered to be active.

Level 3 - Inputs that are unobservable. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

The Company's financial instruments are carried in the accompanying consolidated balance sheets at amounts that approximate fair value.

The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability. The Company recognizes transfers between levels of the fair value hierarchy as of the end of the reporting period. There were no transfers within the hierarchy during the years ended December 31, 2023 and December 31, 2022.

The Company elected the fair value option for the EIB Loan assumed as part of the EryDel Acquisition. The Company adjusted the EIB Loan to fair value through the change in fair value of debt in the accompanying consolidated statements of operations and comprehensive loss. Subsequent unrealized gains and losses on items for which the fair value option is elected are reported in earnings. The Company will breakout any change in value due to credit loss in accumulated other comprehensive loss. For the year ended December 31, 2023 there was no change in value due to credit loss.

Financial assets and liabilities subject to fair value measurements on a recurring basis and the level of inputs used in such measurements by major security type as of December 31, 2023 and 2022 are presented in the following tables (in thousands):

	Fair Value Measurements at December 31, 2023
	Total		Level 1		Level 2		Level 3
Assets:
Money market funds	$	4,285	$	4,285	$	—	$	—
Certificates of Deposit		729		—		729		—
Government and agency notes		68,524		3,971		64,553		—
Total assets	$	73,538	$	8,256	$	65,282	$	—
Liabilities:
Accrued earnout		57,706		—		—		57,706
Long-term debt		13,429		—		—		13,429
Total liabilities	$	71,135	$	—	$	—	$	71,135

	Fair Value Measurements at December 31, 2022
	Total		Level 1		Level 2		Level 3
Money market funds	$	10,988	$	10,988	$	—	$	—
Certificates of Deposit		6,102		—		6,102		—
Repurchase Agreements		9,000		—		9,000		—
Corporate notes		12,411		—		12,411		—
Government and agency notes		50,766		—		50,766		—
Municipal notes		506		—		506		—
Total	$	89,773	$	10,988	$	78,785	$	—

The Company classifies corporate notes, certificates of deposit, repurchase agreements, municipal notes, and government and agency notes as Level 2 investments as the Company uses quoted prices for similar assets sourced from certain third-party pricing services. The third-party pricing services generally utilize industry standard valuation models for which all significant inputs are observable, either directly or indirectly, to estimate the price or fair value of the securities. The primary input generally includes reported trades of or quotes on the same or similar securities. The Company does not make additional judgments or assumptions made to the pricing data sourced from the third-party pricing services.

Contingent Consideration

The following table reflects the changes in present value of acquisition related accrued earnouts of contingent consideration liability using significant unobservable inputs (Level 3) for the year ended December 31, 2023 follows:

(in thousands)
Beginning Balance as of January 1, 2023	$	—
Acquisition date fair value of contingent consideration		56,128
Change in fair value of contingent consideration		1,578
Ending Balance as of December 31, 2023	$	57,706

The following table summarizes the quantitative information including the unobservable inputs related to the Company's acquisition related accrued earnout as of December 31, 2023:

Quantitative Information about Level 3 Fair Value Measurements
(in thousands)	Fair Value at		Valuation	Unobservable Input	Range (Input Used)
	December 31,		Technique
	2023
Accrued earnout	$	57,706	Expected present	Probability of achieving earnout	0% - 100%
			value	objectives per the purchase agreement

Long-term Debt

The following table presents the changes in the fair value of the Level 3 EIB Debt:

(in thousands)
Beginning Balance as of January 1, 2023	$	—
Acquisition of EIB Debt		12,564
Change in fair value		338
Due to foreign currency translation		527
Ending Balance as of December 31, 2023	$	13,429

The following table summarizes the quantitative information including the unobservable inputs related to the Company's acquisition related long term debt as of December 31, 2023:

Quantitative Information about Level 3 Fair Value Measurements
(in thousands)	Fair Value at		Valuation	Unobservable Input	Discount Rate (Input Used)
	December 31,		Technique
	2023
EIB loan	$	13,429	Expected present	Credit quality of company		13	%
			value	and credit spreads for comparable debt

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Cash, Cash Equivalents and Investments

12 Months Ended

Dec. 31, 2023

Fair Value Disclosures [Abstract]

Cash, Cash Equivalents and Investments

Note 4: Cash, Cash Equivalents and Investments

The following tables categorize the fair values of cash, cash equivalents, short-term investments and long-term investments measured at fair value on a recurring basis on our balance sheets (in thousands):

	December 31,
	2023		2022
Cash and cash equivalents:
Cash	$	1,521	$	3,986
Money market funds		4,285		10,988
Repurchase agreements		—		9,000
Government and agency notes		14,946		20,605
Total cash and cash equivalents	$	20,752	$	44,579
Short-term investments:
Certificates of deposit	$	729	$	5,390
Municipal notes		—		506
Corporate notes		—		12,411
Government and agency notes		53,578		27,295
Total short-term investments	$	54,307	$	45,602
Long-term investments
Certificates of deposit	$	—	$	712
Government and agency notes		—		2,866
Total long-term investments	$	—	$	3,578

The investments are classified as available-for-sale securities. As of December 31, 2023, the weighted average remaining contractual maturities of available-for-sale securities was approximately 2 months. At December 31, 2023 and 2022, the unrealized gain (loss) activity related to the Company’s available-for-sale securities is included in the Company’s accumulated other comprehensive loss. There were no significant realized gains or losses recognized on the sale or maturity of available-for-sale securities for the years ended December 31, 2023 and 2022 and as a result, the Company did not reclassify any amounts out of accumulated other comprehensive loss. Based on the Company’s review of its available-for-sale securities, the Company has a limited number of available-for-sale securities in insignificant loss positions as of December 31, 2023. No other-than-temporary impairments on these securities were recognized for the years ended as of December 31, 2023 and 2022.

For available-for-sale debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value and recognized in interest and other income, net in the statement of operations and comprehensive loss. If neither criteria is met, the Company evaluates whether the decline in fair value is related to credit-related factors or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. Credit-related impairment losses, limited by the amount that the fair value is less than the amortized cost basis, are recorded through an allowance for credit losses in interest and other income, net.

Any unrealized losses from declines in fair value below the amortized cost basis as a result of non-credit factors are recognized in accumulated other comprehensive loss, net of tax as a separate component of stockholders’ equity, along with unrealized gains. Realized gains and losses and declines in fair value, if any, on available-for-sale securities are included in interest and other income, net in the statement of operations and comprehensive loss.

For purposes of identifying and measuring credit-related impairments, the Company’s policy is to exclude applicable accrued interest from both the fair value and amortized cost basis of the related security. The Company has elected to write-off uncollectible accrued interest receivable balances in a timely manner, which is defined by the Company as when interest due becomes 90 days delinquent. The accrued interest write-off will be recorded by reversing interest income. Accrued interest receivable is recorded in other current assets on the balance sheets.

The following table summarizes the available-for-sale securities (in thousands):

	Fair Value Measurements at December 31, 2023
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Money market funds	$	4,285	$	—	$	—		$	4,285
Certificates of Deposit		735		—		(6	)		729
Government and agency notes		68,528		13		(17	)		68,524
Total cash equivalents and investments	$	73,548	$	13	$	(23	)	$	73,538
Classified as:
Cash equivalents (original maturities within 90 days)								$	19,231
Short-term investments (maturities within 1 year)									54,307
Total cash equivalents and investments								$	73,538

	Fair Value Measurements at December 31, 2022
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Money market funds	$	10,988	$	—	$	—		$	10,988
Certificates of Deposit		6,237		1		(136	)		6,102
Repurchase Agreements		9,000		—		—			9,000
Corporate notes		12,575		—		(164	)		12,411
Government and agency notes		51,020		4		(258	)		50,766
Municipal notes		510		—		(4	)		506
Total cash equivalents and investments	$	90,330	$	5	$	(562	)	$	89,773
Classified as:
Cash equivalents (original maturities within 90 days)								$	40,593
Short-term investments (maturities within 1 year)									45,602
Long-term investments (maturities beyond 1 year)									3,578
Total cash equivalents and investments								$	89,773

The table below summarizes the unrealized losses of the Company's investments in debt securities measured at fair value as of December 31, 2023 (in thousands):

	Less than twelve months				Twelve months or greater					Total
	Fair value		Gross unrealized loss		Fair value		Gross unrealized loss			Fair value		Gross unrealized loss
Certificates of deposit	$	—	$	—	$	729	$	(6	)	$	729	$	(6	)
Government and agency notes		3,966		—		2,975		(17	)		6,941		(17	)
Total cash equivalents and investments	$	3,966	$	—	$	3,704	$	(23	)	$	7,670	$	(23	)

There were no transfers between Levels 1, 2 or 3 for the period presented.

The table below summarizes the contractual maturities of the Company's investments in debt securities measured at fair value as of December 31, 2023 (in thousands):

	Maturities by Period
	Total		Less Than 1 Year		1-5 Years		6-10 Years		More Than 10 Years
Fair value of debt securities	$	54,307	$	54,307	$	—	$	—	$	—

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Balance Sheet Components

12 Months Ended

Dec. 31, 2023

Balance Sheet Components [Abstract]

Balance Sheet Components

Note 5: Balance Sheet Components

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following (in thousands):

	December 31,
	2023		2022
Prepaid expenses	$	365	$	223
Prepaid insurance		809		977
Prepaid research and development expenses		133		1,088
Australia research and development refundable tax credit		—		1,003
Short-term Italian research and development refundable tax credit		993		—
Other current assets		81		276
Total prepaid expenses and other current assets	$	2,381	$	3,567

EryDel is eligible to obtain an R&D tax credit as companies in Italy that invest in eligible research and development activities, regardless of the legal form and economic sector in which they operate, can benefit from a R&D tax credit. Such tax credits can only be used to offset payments of certain taxes and contributions (e.g., social contributions, VAT payables, registration fees, income and withholding taxes and all other tax-related items that companies usually pay monthly). The Company recognized reductions to R&D expense of $0.2 million and $0 for the years ended December 31, 2023 and 2022, respectively.

Cortexyme Australia, Pty, Ltd, a wholly-owned subsidiary of the company is eligible to obtain a cash refund from the Australian Taxation Office for eligible R&D expenditures under the Australian R&D Tax Incentive Program (the “Australian Tax Incentive”). The Australian Tax Incentive is recognized as a reduction to R&D expense when there is reasonable assurance that the relevant expenditure has been incurred, the amount can be reliably measured and that the Australian Tax Incentive will be received. The Company recognized reductions to R&D expense of $0 and $0.6 million for the years ended December 31, 2023 and 2022, respectively. The Company received a refundable tax credit of $0.5 million in the year ended December 31, 2023, which reduced prepaid expenses and other current assets by $0.5 million as of December 31, 2023.

Novosteo Pty, Ltd, a wholly-owned subsidiary of Novosteo, LLC, is eligible to obtain a cash refund from the Australian Taxation Office for eligible R&D expenditures under the Australian Tax Incentive as well. The Company received a refundable tax credit of $0.5 million in the first quarter of 2023, which reduced prepaid expenses and other current assets by $0.5 million as of March 31, 2023.

Other Assets

Other assets consisted of the following (in thousands):

	December 31,
	2023		2022
VAT receivable	$	3,463	$	—
Long-term Italian research and development refundable tax credit		4,993		—
Total other assets	$	8,456	$	—

Assets Held for Sale

Assets held for sale consist of the following (in thousands):

	December 31,
	2023		2022
Assets held for sale	$	10	$	—
Total assets held for sale	$	10	$	—

Property and equipment, net

Property and equipment, net consisted of the following (in thousands):

	December 31,
	2023			2022
Computer equipment	$	36		$	18
Computer software		30			—
Lab equipment		486			415
Finance lease right of use assets		—			124
Leasehold improvement		36			21
Office furniture		153			—
Less: accumulated amortization and depreciation		(507	)		(185	)
Property and equipment, net	$	234		$	393

Depreciation and amortization expense for property and equipment was $0.3 million and $0.2 million for the years ended December 31, 2023 and 2022, respectively.

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):

	December 31,
	2023		2022
Personnel expenses	$	2,340	$	1,130
Professional fees		211		234
Research and development expenses		564		497
Current portion of operating lease liabilities		64		377
Current portion of finance lease liability		—		76
Other		257		185
Total accrued expenses and other current liabilities	$	3,436	$	2,499

Below is the severance accrual activity included in the personnel expenses in the above table related to a cost reduction program during the years ended December 31, 2023 and December 31, 2022 (in thousands):

	For the year ended December 31,
	2023			2022
Beginning accrued severance	$	—		$	—
Incurred during the period		770			3,942
Severance paid during the period		(429	)		(3,942	)
Ending accrued severance	$	341		$	—

In response to the reprioritization of the Company's pipeline following the decision to discontinue internal development of NOV004 and to pursue out-licensing opportunities, the Board approved a cost reduction program to reorganize operations and allow continued support for the needs of the business. Under the cost reduction program, the Company lowered headcount through a reduction in workforce. The Company recognized the severance of $0.3 million and related expenses of $0.1 million over the requisite employment obligation period. The reduction in force was completed in April 2023.

On August 4, 2023, the Company entered into a transition and separation agreement with Karen Smith, M.D., Ph.D., (the “Separation Agreement”) in connection with Dr. Smith’s transition and departure from the Company as the Company's Chief Medical Officer, effective as of September 1, 2023. Pursuant to the Separation Agreement, the Company is required to pay cash severance, equal to her annual salary, in the aggregate amount of $0.5 million, of which $0.1 million was recognized during the year ended December 31, 2023. The severance is paid on regular payroll schedule through the third quarter of 2024. Additionally, pursuant to the Separation Agreement, the Company paid an additional cash bonus severance payment equal to 100% of Dr. Smith’s target annual bonus opportunity for 2023 on a prorated basis, an additional cash severance payment equal to 12 months’ of the monthly premiums for health care continuation benefits, and provided for 50% accelerated vesting with respect to Dr. Smith’s equity award. The acceleration of 612,141 options and 54,757 RSAs resulted in a stock-based compensation expense of approximately $0.1 million.

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Leases

12 Months Ended

Dec. 31, 2023

Leases [Abstract]

Leases

Note 6. Leases

Real Estate Operating Leases

In June 2022, the Company entered into a Sublease Agreement to rent office space in South San Francisco, California. The Sublease Agreement commenced on June 18, 2022 and ended on November 30, 2023. The total payments under the term of the lease were approximately $0.3 million. The Company paid a security deposit of $17,000 which is included in Prepaid Expenses and Other Current Assets on the December 31, 2023 consolidated balance sheets and the deposit was refunded in January 2024. At the commencement of the lease, the Company recorded an operating lease right of use asset and liability of $0.3 million. On October 31, 2023, the Company signed a lease agreement for a smaller office space in South San Francisco, California. The total payments under the new lease are expected to be approximately $22,000 for the year. The lease commenced on November 30, 2023 and will end on November 30, 2024.

In October 2022, the Company entered into a lease agreement to rent space in West Lafayette, Indiana. The lease agreement amended the original lease to transfer liability to the Company due to the Novosteo Acquisition. The lease agreement is for 15 months, which commenced on October 1, 2022 and ended on December 31, 2023. The total payments under the term of the lease were approximately $0.2 million. At the commencement of the lease, the Company recorded an operating lease right of use asset and liability of $0.1 million.

In December 2022, the Company entered into an amendment to the lease agreement of the rental space in West Lafayette to rent additional space in the same facility under the same terms as its existing facility lease except the terms of payment. Under the terms of the amendment, the Company will pay rent monthly for the additional space. The Company recorded an operating lease right of use asset and liability of $10,000.

In February 2023, as a result of the decision to discontinue internal development of NOV004 and to pursue out-licensing opportunities, the Company entered into a sublease agreement as the lessor for the majority of the West Lafayette facility. The lease commenced on March 17, 2023 and ended on December 31, 2023. The sublessee paid the Company a security deposit of $6,000 which is included in Accrued expenses and other current liabilities on the December 31, 2023 consolidated balance sheet. Under the terms of the sublease, the Company is entitled to receive a total rental income that is expected to offset rent expense of $57,000. As a result of this decision and the sublease agreement, the Company recorded an impairment loss of approximately $66,000 which is included in other expense, net per the consolidated statement of operations and comprehensive loss for the year ended December 31, 2023.

In October 2023, as part of the EryDel Acquisition the Company acquired operating leases in which the Company recorded an operating lease right of use asset and liability in total of $0.4 million. This includes a lease agreement renting office space in Bresso, in the Province of Milan, Italy. The Lease Agreement commenced on September 1, 2016, and will end on August 31, 2028. At acquisition date, the Company recorded an operating lease right of use asset and liability of $0.1 million. This also includes a lease agreement renting office space in Medolla, in the Province of Modena, Italy. The Lease Agreement commenced on June 18, 2018, with a duration of 12 years, until January 31, 2030. At acquisition date, the Company recorded an operating lease right of use asset and liability of $0.2 million. The acquired lease agreements also included other operating leases two of which are car leases and the other a printing press which in total the Company recorded an operating lease right of use asset and liability of $31,000.

In January 2024, the above-mentioned Lease Agreement for the office space in Medolla (Italy) was renegotiated. The new Lease Agreement commenced on February 1, 2024, and will end on January 31, 2036, substituting the Lease Agreement commenced in June 2018.

The Company recognizes lease expense on a straight-line basis over the term of its operating lease. As of December 31, 2023, total future rent expense from all real estate operating leases of $0.4 million will be recognized over the remaining term of 29 to 73 months on a straight-line basis over the respective lease period.

Clinical Equipment Financing Lease

As part of the Novosteo Acquisition, the Company acquired a financing lease for certain lab equipment. The Company recognizes the amortization expense in research and development expenses in the consolidated statements of operations and comprehensive loss and recognizes expense on a straight-line basis starting when the equipment is placed into service until the end of the remaining contract term of 18 months. Amortization expense of the financing lease right of use asset for the year ended December 31, 2023 was $6,000. Amortization expense of the financing lease right of use asset for the year ended December 31, 2022 was $50,000.

In February 2023, as a result of the decision to discontinue internal development of NOV004 and to pursue out-licensing opportunities, the Company exercised its purchase option for the financed equipment in order to resell and this equipment is currently held on consignment and is included in assets held for sale on the December 31, 2023 consolidated balance sheet. As a result of this action, the Company reduced the Finance lease ROU asset and Finance lease liability by approximately $70,000.

Supplemental balance sheet information related to leases as follows (in thousands except lease terms and discount rates):

	December 31, 2023			December 31, 2022
Operating lease right of use asset, net	$	385		$	291
Short-term operating lease liability		64			377
Long-term operating lease liability		321			—
	$	385		$	377
Finance lease right of use asset		—			124
Finance lease accumulated amortization		—			(50	)
Total finance lease right of use asset, net	$	—		$	74
Weighted average remaining lease term
Operating leases	5.4 years			0.9 years
Finance leases		—		1.0 year
Weighted average discount rate
Operating leases		7.95	%		5.71	%
Finance leases		—	%		4.45	%
Year ended December 31,	Operating Lease
2024		91
2025		91
2026		88
2027		81
2028		69
Thereafter		48
Total lease payments		469
Less: imputed interest		(83	)
Total remaining lease liability	$	385

Lease costs for the years ended December 31, 2023 and 2022 were approximately:

	Years ended December 31,
	2023		2022
Lease costs:
Finance lease amortization of right of use assets	$	6	$	50
Operating lease costs		266		572
Short-term lease costs		96		75
Total lease costs	$	368	$	697

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Long-term Debt

12 Months Ended

Dec. 31, 2023

Debt Disclosure [Abstract]

Long-term Debt

Note 7. Long-term Debt

In connection with the acquisition of EryDel on October 20, 2023, the Company assumed an unsecured line of credit between EryDel and the European Investment Bank (the "EIB Loan"). The EIB Loan was amended and restated as of the acquisition date. The EIB Loan provides for maximum borrowings of 30.0 million euro through four tranches; tranche A, 3.0 million euro; tranche B, 7.0 million euro; tranche C, 10.0 million euro; and tranche D, 10.0 million euro. Each tranche is subject to conditions precedent related to the Company’s business and capitalization. The unused portions of each tranche may be canceled by the Company at any time, subject to a cancellation fee. As of December 31, 2023, only tranches A and B have been drawn. All amounts due under tranche A and B are payable on their maturity date of August 2026. Tranche C and D are payable in equal installments of principal together with all amounts outstanding under the tranches on the repayment dates specified in the relevant Disbursement Offer. The first Repayment Date of tranche C shall fall not earlier than twelve months from the Disbursement Date of such tranche. The last Repayment Date of tranche C and tranche D shall fall not later than 5 years from the Disbursement Date of tranche C and tranche D, respectively. The EIB Loan bears interest at fixed rates for each tranche and is payable on the maturity date for each Tranche. The fixed rates range from 7.0% to 9.0% per annum. As of December 31, 2023, principal of 10.0 million euros ($11.0 million) was outstanding on the EIB Loan and it is recorded as Long-term debt on the consolidated balance sheet at fair value with imputed interest of 9.0% included.

The Company may voluntarily prepay, in whole or in part with a prepayment premium. In the event of an occurrence of an event of default or a change in control, as specified in the Debt Agreement, the Company will be required to prepay the outstanding EIB Debt.

The Debt Agreement includes a provision for additional remuneration to be paid in addition to interest. The amount of additional remuneration to be paid is equal to 2.5% of revenue up to 125.0 million euros, plus 1.85% of revenue between 125.0 and 250.0 million euros, plus 1.0% of revenue in excess of 250.0 million euros, multiplied by a varying percentage based on how many tranches have been drawn. The varying percentage is equal to 30.0% in the event tranche A has been drawn, 50.0% in the event tranche A and B have been drawn, 80.0% in the event tranche A, B and C have been drawn, and 100.0% in the event all four tranches have been drawn. The additional remuneration is payable for seven years, during the period January 1, 2026, through December 31, 2032. In the event of an occurrence of an event of default or prepayment, the Company may be required to pay an additional remuneration buyout fee.

The Company elected to account for the EIB Loan at fair value, which requires the EIB Loan to be recorded at fair value at issuance and at the end of each reporting period. Gains or losses upon remeasurement are to be recorded in other income (expense) in the consolidated statements of operations and comprehensive income. The Company presents separately in other comprehensive income the portion of the total change in the fair value of the EIB Loan that results from a change in instrument-specific credit risk. The EIB Loan’s fair value at the date it was assumed adjusted its carrying value based on using a discounted cash flow analysis with a discount rate based on a yield curve that was adjusted for credit rating. The change in fair value at December 31, 2023 was determined using a discounted cash flow analysis discounted at the market yield. The significant inputs used to measure the market yield at December 31, 2023 relative to the date the EIB Loan was assumed was the change in credit quality of the Company, the change in credit spreads for comparable debt instruments, and the change in the risk-free rate. As of December 31, 2023, the fair value of the EIB Loan is valued at $13.4 million, which includes a fair value adjustment of $0.3 million and foreign currency translation of $0.5 million, from the amount recorded at fair value on the date of the EryDel Acquisition of $12.6 million.

Future minimum principal payments, as of December 31, 2023 are as follows (in thousands):

Year Ending December 31,	Amount
2024	$	—
2025		—
2026		11,053
2027 and thereafter		—
Total future minimum payments		11,053
Imputed interest		2,376
Total Debt as of December 31, 2023	$	13,429

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 8. Commitments and Contingencies

Legal Matters

The Company’s industry is characterized by frequent claims and litigation, including claims regarding intellectual property. As a result, the Company may be subject to various legal proceedings from time to time. The results of any future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors. Management is not aware of any pending or threatened litigation.

Indemnification

As permitted under Delaware law and in accordance with the Company’s bylaws, the Company indemnifies its officers and directors for certain events or occurrences while the officer or director is or was serving in such capacity. The Company is also party to indemnification agreements with its directors. The Company believes the fair value of the indemnification rights and agreements is minimal. Accordingly, the Company has not recorded any liabilities for these indemnification rights and agreements as of December 31, 2023 and 2022.

Contingencies

From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of its business activities. The Company accrues a liability for such matters when it is probable that future expenditures will be made, and such expenditures can be reasonably estimated.

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Equity Incentive Plans

12 Months Ended

Dec. 31, 2023

Share-Based Payment Arrangement [Abstract]

Equity Incentive Plans

Note 9. Equity Incentive Plans

The Company operates three stock plans as of December 31, 2023.

•2019 Equity Incentive Plan (Quince)

•2019 Equity Incentive Plan (Novosteo)

•2022 Inducement Plan (Quince)

2019 Equity Incentive Plan (Quince)

On December 4, 2014, the Company’s stockholders approved the 2014 Stock Plan (“2014 Plan”), and on April 25, 2019 amended, restated and re-named the 2014 Plan as the 2019 Equity Incentive Plan (the “Quince 2019 Plan”), which became effective as of May 7, 2019, the day prior to the effectiveness of the registration statement filed in connection with the IPO. The remaining shares available for issuance under the 2014 Plan were added to the shares reserved for issuance under the Quince 2019 Plan.

The Quince 2019 Plan provides for the grant of stock options (including incentive stock options and non-qualified stock options), stock appreciation rights, restricted stock, RSUs, performance units, and performance shares to the Company’s employees, directors, and consultants. The maximum aggregate number of shares that may be issued under the Quince 2019 Plan is 10,036,489 shares of the Company’s common stock. In addition, the number of shares available for issuance under the Quince 2019 Plan will be annually increased on the first day of each of its fiscal years beginning with fiscal 2020, by an amount equal to the least of (i) 2,146,354 shares of common stock; (ii) 4% of the outstanding shares of its common stock as of the last day of its immediately preceding fiscal year; and (iii) such other amount as the Company’s Board of Directors may determine.

The Quince 2019 Plan may be amended, suspended or terminated by the Company’s Board of Directors at any time, provided such action does not impair the existing rights of any participant, subject to stockholder approval of any amendment to the Quince 2019 Plan as required by applicable law or listing requirements. Unless sooner terminated by the Company’s Board of Directors, the 2019 Plan will automatically terminate on April 23, 2029.

Stock Options

Stock options under the 2019 Plan may be granted for periods of up to 10 years and at prices no less than 100% of the estimated fair value of the shares on the date of grant as determined by the board of directors. If, at the time of grant, the optionee directly owns stocks representing more than 10% of the voting power of all our outstanding capital stock, the exercise price for these options must be at least 110% of the fair value of the underlying common stock. Stock options granted to employees and non-employees generally have a maximum term of ten years and vest over four years from the vesting commencement date, of which 25%

vest on the one-year anniversary of the vesting commencement date, and 75% vest in equal monthly installments over the remaining three years or monthly vesting over 3 to 4 years. We may grant options with different vesting terms from time to time. Unless an employee's or non-employee's termination is due to cause, disability or death, upon termination of service, any unexercised vested options will be forfeited at the end of the three months from the termination date or expiration of the option, whichever is earlier.

Activity for service-based stock options under the Quince 2019 Plan is as follows:

	Number of Options and Unvested Shares			Weighted Average Exercise Price		Weighted average remaining contractual life (years)		Aggregate intrinsic value
								(In thousands)
Balance at December 31, 2021		5,571,293		$	28.70		8.26	$	15,687
Options granted		2,051,058			8.13	—		—
Options exercised		(102,152	)		1.45	—		—
Options cancelled / forfeited		(4,200,488	)		29.30	—		—
Balance at December 31, 2022		3,319,711		$	16.07		4.77	$	65
Options granted		3,346,958			1.03	—		—
Options exercised		(258,705	)		0.42	—		—
Options cancelled / forfeited		(2,140,786	)		16.52	—		—
Balance at December 31, 2023		4,267,178		$	5.00		8.85	$	197
Options vested and expected to vest as of December 31, 2023		4,267,178			5.00		8.85		197
Options exercisable at December 31, 2023		1,109,464		$	14.09		7.32	$	34

Aggregate intrinsic value represents the difference between the Company’s estimated fair value of its common stock as of their respective balance sheet dates and the exercise price of outstanding options. The total intrinsic value of the Quince 2019 Plan options exercised was $0.3 million and $1.4 million for the years ended December 31, 2023 and 2022, respectively. The weighted-average grant date fair value of options granted during the years ended December 31, 2023 and 2022 was $0.82 and $6.05 per share, respectively. The total estimated grant date fair value of options vested during each of the years ended December 31, 2023 and 2022 was $11.1 million and $31.8 million, respectively.

In 2023 and 2022 , the Company recognized $2.6 million and $11.4 million, respectively, of stock-based compensation expense related to options granted to employees and non-employees. The compensation expense is allocated on a departmental basis, based on the classification of the option holder. No income tax benefits have been recognized in the consolidated statement of operations and comprehensive loss for stock-based compensation arrangements. As of December 31, 2023, total unamortized employee stock-based compensation was $4.0 million, which is expected to be recognized over the remaining estimated vesting period of 2.55 years.

Restricted Stock Units

RSUs are share awards that entitle the holder to receive freely tradable shares of the Company’s common stock upon vesting. The fair value of RSUs is based upon the closing sales price of the Company’s common stock on the grant date. RSUs granted to employees generally vest over a 2–4 year period.

The following table summarizes activity under the Company’s RSUs from the Quince 2019 Plan and related information:

	Restricted Stock Units Outstanding
	Number of Shares			Weighted Average Grant Date Fair Value
Unvested - December 31, 2022		30,876		$	4.30
RSUs granted	—			—
RSUs vested		(10,200	)		4.30
RSUs cancelled		(19,188	)		4.30
Unvested - December 31, 2023		1,488		$	4.30

The fair value of the RSUs is determined on the grant date based on the fair value of the Company’s common stock. The fair value of the RSUs is recognized as expense ratably over the vesting period of two years. The total grant date fair value of the

RSUs vested during the years ended December 31, 2023 and 2022 was $44,000 and $1,700,000, respectively. The aggregate intrinsic value of the shares of the RSUs vested during the years ended December 31, 2023 and December 31, 2022 were $11,000 and $1.1 million, respectively.

For the years ended December 31, 2023 and 2022, the Company recognized stock-based compensation expense of $37,000 and $1,337,000, respectively, related to these RSUs. As of December 31, 2023, the total unamortized stock-based compensation related to RSUs was $4,000, which is expected to be recognized over the remaining estimated vesting period of 0.17 years.

2019 Equity Incentive Plan (Novosteo)

On May 19, 2022, in accordance with the term of the Merger Agreement, the Company assumed the 2019 Novosteo Equity Incentive Plan (the "2019 Novosteo Plan"). The 2019 Novosteo Plan provides for the grant of stock options (including incentive stock options and non-qualified stock options), stock appreciation rights, restricted stock, RSUs, performance units, and performance shares to the Novosteo legacy employees. On the closing date, each outstanding Novosteo stock option granted under Novosteo’s equity compensation plans was converted into a corresponding stock option with the number of shares underlying such option and the applicable exercise price adjusted based and adjusted into the right to purchase 0.0911 shares of common stock. Each such converted stock option will continue to be subject to substantially the same terms and conditions as applied to the corresponding Novosteo stock option prior to the Acquisition. The maximum aggregate number of shares that may be issued under the 2019 Novosteo Plan is 544,985 shares of the Company’s common stock.

The 2019 Novosteo Plan may be amended, suspended or terminated by the Board at any time, provided such action does not impair the existing rights of any participant, subject to stockholder approval of any amendment to the 2019 Novosteo Plan as required by applicable law or listing requirements. Unless sooner terminated by the Board, the 2019 Novosteo Plan will automatically terminate on May 20, 2029.

Stock options under the 2019 Novosteo Plan may be granted for periods of up to 10 years and at prices no less than 100% of the estimated fair value of the shares on the date of grant as determined by the board of directors. If, at the time of grant, the optionee directly owns stocks representing more than 10% of the voting power of all our outstanding capital stock, the exercise price for these options must be at least 110% of the fair value of the underlying common stock. Stock options granted to employees and non-employees generally have a maximum term of ten years and vest over four years from the vesting commencement date, of which 25% vest on the one-year anniversary of the vesting commencement date, and 75% vest in equal monthly installments over the remaining three years or monthly vesting over 3 to 4 years. We may grant options with different vesting terms from time to time. Unless an employee's or non-employee's termination is due to cause, disability or death, upon termination of service, any unexercised vested options will be forfeited at the end of the three months from the termination date or expiration of the option, whichever is earlier.

Activity for service-based stock options under the 2019 Novosteo Plan is as follows:

	Number of Options and Unvested Shares			Weighted Average Exercise Price		Weighted average remaining contractual life (years)		Aggregate intrinsic value
								(In thousands)
Balance at December 31, 2021		—		$	—		—	$	—
Options assumed		507,648			0.55		—		—
Options exercised		—			—		—		—
Options cancelled / forfeited		(4,543	)		0.55		—		—
Balance at December 31, 2022		503,105		$	0.55		9.23	$	44
Options granted		—			—		—		—
Options exercised		(105,808	)		0.55		—		40
Options cancelled / forfeited		(86,866	)		0.55		—		—
Balance at December 31, 2023		310,431		$	0.55		8.23	$	155
Options vested and expected to vest as of December 31, 2023		310,431			0.55		8.23		155
Options exercisable as of December 31, 2023		135,812		$	0.55		8.23	$	68

For the years ended December 31, 2023 and 2022, the Company recognized stock-based compensation expense of $275,000 and $245,000, respectively, related to options granted to employees and non-employees for the 2019 Novosteo plan. The compensation expense is allocated on a departmental basis, based on the classification of the option holder. No income tax benefits have been recognized in the consolidated statement of operations and comprehensive loss for stock-based compensation arrangements. As of December 31, 2023, total unamortized employee stock-based compensation was $0.4 million, which is expected to be recognized over the remaining estimated vesting period of 2.23 years.

The total aggregate intrinsic value of the Novosteo 2019 Plan options exercised was $427,000 and $0 for the years ended December 31, 2023 and 2022. The weighted-average grant date fair value of options granted during the years ended December 31, 2023 and 2022 was $0 and $2.51 per share, respectively. The total estimated grant date fair value of options vested during the years ended December 31, 2023 and 2022 was $0.3 million and $0.3 million, respectively.

On May 19, 2022, in accordance with the term of the Merger Agreement, the Company assumed a number of RSAs agreements with certain employees. Each outstanding Novosteo RSA was converted into a corresponding RSA with the number of shares underlying such RSA adjusted into 0.0911 shares of common stock. Each such converted RSA will continue to be subject to substantially the same terms and conditions as applied to the corresponding Novosteo RSA prior to the Acquisition.

Restricted Stock Awards

	Restricted Stock Awards Outstanding
	Number of Shares			Weighted Average Grant Date Fair Value
Unvested - December 31, 2022		427,401		$	3.30
RSAs issued	—			—
RSAs vested		(188,344	)		3.30
RSAs cancelled		(63,293	)		3.30
Unvested - December 31, 2023		175,764		$	9.90

For the years ended December 31, 2023 and 2022, the Company recognized stock-based compensation expense of $496,000 and $338,000, respectively, related to restricted stock awards. The compensation expense is allocated on a departmental basis, based on the classification of the option holder. No income tax benefits have been recognized in the consolidated statement of operations and comprehensive loss for stock-based compensation arrangements. As of December 31, 2023, total unamortized employee stock-based compensation was $0.6 million, which is expected to be recognized over the remaining estimated vesting period of 1.74 years.

2022 Inducement Plan

On May 9, 2022, the Company's board of directors approved 4,000,000 shares of the Registrant’s common stock that may be offered or issued under the Quince Therapeutics, Inc. 2022 Inducement Plan. The 2022 Inducement Plan was adopted by the independent members of the Board without stockholder approval pursuant to Rule 5635(c)(4) of the Nasdaq Listing Rules. In accordance with rule awards under those plans may only be made to an employee who has not previously been an employee or member of the Board or of any board of directors of any parent or subsidiary of the Company, or following a bona fide period of non-employment by the Company or a parent or subsidiary, if he or she is granted such award in connection with his or her commencement of employment with the Company or a subsidiary and such grant is an inducement material to his or her entering into employment with the Company or such subsidiary. The terms and conditions of the 2022 Inducement Plan are substantially similar to those of the Quince 2019 Plan.

Options under the 2022 Inducement Plan may be granted for periods of up to 10 years at prices no less than 100% of the estimated fair value of the shares on the date of grant as determined by the board of directors. Options granted to employees may have different performance goals or other vesting provisions (including continued employment) in accordance with Award Agreement. Unless an employee's termination service is due to disability or death, upon termination of service, any unexercised vested options will be forfeited at the end of the three months or expiration of the option, whichever is earlier.

Activity for service-based stock options under the 2022 Inducement Plan is as follows:

	Number of Options and Unvested Shares			Weighted Average Exercise Price		Weighted average remaining contractual life (years)		Aggregate intrinsic value
								(In thousands)
Balance at December 31, 2021		—		$	—		—	$	—
Options granted		3,744,255			2.98		—		—
Options exercised		—			—		—		—
Options cancelled / forfeited		(2,000	)		2.98		—		—
Balance at December 31, 2022		3,742,255		$	2.98		9.39	$	—
Options granted		—			—		—		—
Options exercised		—			—		—		—
Options cancelled / forfeited		(1,408,949	)		2.98		—		—
Balance at December 31, 2023		2,333,306		$	2.98		8.39	$	—
Options vested and expected to vest as of December 31, 2023		2,333,306			2.98		8.39		—
Options exercisable as of December 31, 2023		923,599		$	2.98		8.39	$	—

For the years ended December 31, 2023 and 2022, the Company recognized stock-based compensation expense of $1,802,000 and $1,293,000, respectively, related to options granted to employees and non-employees for the 2022 Inducement plan. The compensation expense is allocated on a departmental basis, based on the classification of the option holder. No income tax benefits have been recognized in the consolidated statement of operations and comprehensive loss for stock-based compensation arrangements. As of December 31, 2023, total unamortized employee stock-based compensation was $3.2 million, which is expected to be recognized over the remaining estimated vesting period of 2.39 years.

The total aggregate intrinsic value of the 2022 Inducement Plan options exercised was $0 for both the years ended December 31, 2023 and 2022. The weighted-average grant date fair value of options granted during the years ended December 31, 2023 and 2022 was $0.00 and $2.26 per share, respectively. The total estimated grant date fair value of options vested during the years ended December 31, 2023 and 2022 was $2.1 million and $0, respectively.

Stock-Based Compensation Expense

The following table summarizes employee and non-employee stock-based compensation expense for the years ended December 31, 2023 and 2022 and the allocation within the consolidated statements of operations and comprehensive loss (in thousands):

	2023		2022
General and administrative expense	$	4,003	$	10,225
Research and development expense		1,217		6,393
Total stock-based compensation	$	5,220	$	16,618

The Company estimates the fair value of its service-based stock option awards utilizing the Black-Scholes option pricing model, which is dependent upon several variables, such as expected term, volatility, risk-free interest rate, and expected dividends. Each of these inputs is subjective and generally requires significant judgment to determine. Stock-based compensation is measured at the grant date based on the fair value of the award and is recognized as expense, over the requisite service period, which is generally the vesting period of the respective award. The Company recognizes compensation on a straight-line basis over the requisite vesting period for each award. Forfeitures are recognized as they occur. The following weighted average assumptions were used to calculate the fair value of stock-based compensation for the years ended December 31, 2023 and 2022:

	2023			2022
Expected volatility		106.36	%		89.98	%
Expected dividend yield		—	%		—	%
Expected term (in years)		6.22			6.23
Risk-free interest rate		4.01	%		2.67	%

Expected Term — The Company has opted to use the “simplified method” for estimating the expected term of options, whereby the expected term equals the arithmetic average of the vesting term and the original contractual term of the option (generally 10 years). The expected term was estimated using the simplified method for employee stock options since the Company does not have adequate historical exercise data to estimate the expected term.

Expected Volatility—Due to the Company’s limited operating history and a lack of company specific historical and implied volatility data, the Company has based its estimate of expected volatility on the historical volatility of its own stock and the stock of companies within its defined peer group. The historical volatility data was computed using the daily closing prices for the selected companies’ shares during the equivalent period of the calculated expected term of the stock-based awards.

Risk-Free Interest Rate — The risk-free rate assumption is based on the U.S. Treasury instruments with maturities similar to the expected term of the Company’s stock options.

Expected Dividend — The Company has not issued any dividends in its history and does not expect to issue dividends over the life of the options and therefore has estimated the dividend yield to be zero.

Fair value of Common Stock — The board of directors uses the closing price of stock on the date of grant to determine the fair value. The board of directors intends all options granted to be exercisable at a price per share not less than the estimated per share fair value of common stock underlying those options on the date of grant.

Employee Stock Purchase Plan

On April 24, 2019, the Company’s Board of Directors adopted its 2019 Employee Stock Purchase Plan (“2019 ESPP”), which was subsequently approved by the Company’s stockholders and became effective on May 7, 2019, the day immediately prior to the effectiveness of the registration statement filed in connection with the IPO. The 2019 ESPP is intended to qualify as an “employee stock purchase plan” within the meaning of Section 423 of the Code for U.S. employees. In addition, the 2019 ESPP authorizes grants of purchase rights that do not comply with Section 423 of the Code under a separate non-423 component for non-U.S. employees and certain non-U.S. service providers. The Company has reserved 1,494,530 shares of common stock for issuance under the 2019 ESPP. In addition, the number of shares reserved for issuance under the 2019 ESPP will be increased automatically on the first day of each fiscal year for a period of up to ten years, starting with the 2020 fiscal year, by a number equal to the lesser of: (i) 536,589 shares; (ii) 1% of the shares of common stock outstanding on the last day of the prior fiscal year; or (iii) such lesser number of shares determined by the Company’s Board of Directors. The 2019 ESPP is expected to be implemented through a series of offerings under which participants are granted purchase rights to purchase shares of the Company’s common stock on specified dates during such offerings. The Company has not yet approved an offering under the 2019 ESPP.

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Common Stock

12 Months Ended

Dec. 31, 2023

Equity [Abstract]

Common Stock

Note 10. Common Stock

Equity Transactions

On December 23, 2021, the Company entered into an Open Market Sales Agreement, with Jefferies, whereby the Company may sell up to $150.0 million in aggregate proceeds of common stock from time to time, through Jefferies as our sales agent. During the years ended December 31, 2023 and 2022, the Company sold zero and 51,769 shares of common stock, respectively, under this agreement and received net proceeds of $0 and $0.6 million, respectively.

Common Stock

The Company had reserved shares of common stock for future issuance as follows:

	December 31,
	2023		2022
Options issued and outstanding under the Quince 2019 Stock Plan		4,267,178		3,319,711
Shares available for issuance under Quince 2019 Stock Plan		4,005,784		3,747,309
Shares available for issuance under the Employee Stock Purchase Plan		1,494,530		1,133,165
Options issued and outstanding under the Novosteo 2019 Plan		310,431		503,105
Shares available for issuance under Novosteo 2019 Plan		246,797		41,880
Options issued and outstanding under the 2022 Inducement Plan		2,333,306		3,742,255
Shares available for issuance under 2022 Inducement Plan		1,666,694		257,745
Total		14,324,720		12,745,170

The Company is authorized to issue 100,000,000 shares of common stock with a par value of $0.001 per share. Each share of common stock is entitled to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when and if declared by the board of directors, subject to the prior rights of holders of any preferred stock that may be outstanding at the time. The Company has never declared any dividends on common stock. As of December 31, 2023 and 2022, the Company had 42,973,215 and 36,136,480 shares of common stock issued and outstanding, respectively.

In addition, in April 2023, we implemented the Rights Agreement, also called a “poison pill,” that may have the effect of discouraging or preventing a change of control by, among other things, making it uneconomical for a third party to gain control of us through open market accumulation of shares without paying all stockholders an appropriate control premium or without the consent of our board of directors. The Rights will expire on April 5, 2024, unless the Rights are earlier redeemed or exchanged by the Company.

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Related Party Transactions

12 Months Ended

Dec. 31, 2023

Related Party Transactions [Abstract]

Related Party Transactions

Note 11. Related Party Transactions

David Lamond, Chairperson of the Board of Quince Therapeutics, Inc. was a director and an equity holder in Novosteo which Quince acquired on May 19, 2022. The shares of Novosteo beneficially owned by Mr. Lamond were automatically cancelled and converted into the right to receive shares of Quince common stock in accordance with the terms of the Merger Agreement. The respective boards of directors of Quince and Novosteo approved the Merger Agreement, and the Novosteo’s stockholders adopted the Merger Agreement upon recommendation of the Novosteo board of directors. Mr. Lamond was not part of either company's special committees that evaluated the Novosteo Acquisition and recused himself from board meetings where the Novosteo Acquisition was discussed.

Dirk Thye, M.D., Chief Executive Officer, is an investor in Morphimmune Inc. and Philip Low, Ph.D, a former Board member of Quince Therapeutics, Inc., is a co-founder and Board member of Morphimmune Inc. During the year ended December 31, 2023, the Company sold certain lab equipment to Morphimmune Inc. for $80,000 as well as signed a sublease with Morphimmune as the sublessee with total payments of approximately $57,000 for the lease term of March 17, 2023 through December 31, 2023.

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Income Taxes

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Note 12. Income taxes

The components of the Company's loss before income taxes were as follows (in thousands):

	Year ended December 31,
	2023			2022
United States	$	(27,375	)	$	(48,191	)
International		(4,207	)		(3,753	)
Total	$	(31,582	)	$	(51,944	)

The components of the Company's benefit for income taxes were as follows:

		Year ended December 31,
(in thousands)		2023				2022
Current expense (benefit):
Federal	$		—		$		—
State			—				—
Foreign			61				—
Total current expense (benefit):			61				—
Deferred expense (benefit):
Federal			(248	)			284
State			—				—
Foreign			(10	)			—
Total deferred expense (benefit):			(258	)			284
Total income tax expense (benefit)	$		(197	)	$		284

The provision for income taxes differs from the amount expected by applying the federal statutory rate to the loss before taxes as follows:

	Year ended December 31,
	2023				2022
Federal statutory income tax rate		21.00		%		21.00		%
State income taxes		4.47				0.89
Income tax credits		1.07				1.49
Stock based compensation		(26.35	)			(0.82	)
Non-deductible expenses and others		(1.25	)			(3.38	)
Change in valuation allowance		1.68				(18.63	)
		0.62		%		0.55		%

As of December 31, 2023 and 2022, the components of the Company’s deferred tax assets are as follows (in thousands):

	Year ended December 31,
	2023			2022
Deferred tax asset:
Federal and State net operating loss carryforwards	$	81,881		$	49,481
Stock based compensation		2,401			9,667
Other accruals		527			515
Capitalized research and development expense		3,220			3,094
Tax credits		8,343			7,970
Disallowed interest expense carryforward		1,043			—
Gross deferred tax asset		97,415			70,727
Valuation allowance		(85,111	)		(69,692	)
Total deferred tax assets		12,304			1,035
Deferred tax liabilities:
Property and equipment		—			(11	)
Capitalized leases		—			(32	)
IP R&D		(17,608	)		(1,239	)
Gross deferred tax liabilities		(17,608	)		(1,282	)
Net deferred tax liabilities	$	(5,304	)	$	(247	)

Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, and (b) operating losses and tax credit carryforwards.

The Company’s accounting for deferred taxes involves the evaluation of a number of factors concerning the realizability of its net deferred tax assets. The Company primarily considered such factors as its history of operating losses, the nature of the Company’s deferred tax assets, and the timing, likelihood and amount, if any, of future taxable income during the periods in which those temporary differences and carryforwards become deductible. At present, the Company does not believe that it is more likely than not that the deferred tax assets will be realized; accordingly, a full valuation allowance has been established and a deferred tax liability has been recorded as shown in the accompanying balance sheets. The valuation allowance increased by approximately $15.4 million and $11.1 million, respectively for the years ended December 31, 2023 and 2022.

At December 31, 2023, the Company has federal net operating loss carryforwards of approximately $238.4 million of which $222.6 million will not expire and $15.8 million begin expiring in 2034. The Company also has state net operating loss carryforwards of approximately $34.2 million which begin to expire in 2034. Additionally, the Company has federal tax credits of approximately $9.8 million which begin to expire in 2036 and state tax credits of approximately $2.9 million which do not expire.

At December 31, 2023, the Company has foreign net operating loss carryforwards, primarily in Italy, of approximately $121.1 million, which have no expiration date.

Use of the net operating loss and credit carryforwards may be subject to a substantial annual limitation due to the ownership change provisions of U.S. tax law and similar state provisions. The annual limitation may result in the expiration of net operating losses and credits before use.

Pursuant to the Code Sections 382 and 383, annual use of a company’s U.S. NOL and research and development credit carryforwards may be limited if there is a cumulative change in ownership of greater than 50% within a three-year period. The amount of the annual limitation is determined based on the value of the Company immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years. If limited, the related tax asset would be removed from the deferred tax asset schedule with a corresponding reduction in the valuation allowance. The Company has completed such an analysis pursuant to Sections 382 and 383 in prior years which determined that ownership changes occurred on December 22, 2015 and May 13, 2019, which had no impact on the NOLs available to offset future income. The Company has rolled forward the analysis through December 31, 2023 and no additional ownership changes have occurred.

The Company follows the provisions of the FASB ASC 740-10, Accounting for Uncertainty in Income Taxes. ASC 740-10 prescribes a comprehensive model for the recognition, measurement, presentation and disclosure in the consolidated financial statements of uncertain tax positions that have been taken or expected to be taken on a tax return. It is the Company’s policy to include penalties and interest related to income tax matters in income tax expense.

The Company is subject to taxation in the United States, Australia, and Italy. Because of the net operating loss and research credit carryforwards, all of the Company’s tax years, from 2013 to 2023, remain open to U.S. federal, California, other state tax examinations. The Company's Australian subsidiaries remain open to examination from their inception to 2023. The Company’s Italian subsidiary remain open to examination from their inception to 2023. The majority of our unrecognized tax benefits would not impact our effective tax rate due to a valuation allowance offsetting our deferred tax assets. The impact on our effective tax rate of recognizing unrecognized tax benefits is approximately $0.5 million. There were interest and penalties of $0.1 million and $0 accrued at December 31, 2023 and 2022, respectively. The Company does not expect that our uncertain tax positions will materially change in the next twelve months.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):

	Year ended December 31,
	2023		2022
Beginning balance	$	3,688	$	3,249
Additions for tax positions taken in a prior year		200		—
Additions for tax positions taken in a current year		451		439
Ending balance	$	4,339	$	3,688

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Net Loss Per Share

12 Months Ended

Dec. 31, 2023

Earnings Per Share [Abstract]

Net Loss Per Share

Note 13. Net Loss per Share

The following table sets forth the computation of basic and diluted net loss per share (in thousands except for share and per share amounts):

	December 31,
	2023			2022
Numerator:
Net loss	$	(31,385	)	$	(51,660	)
Denominator:
Weighted average common shares outstanding		37,237,149			33,496,534
Net loss per share, basic and diluted	$	(0.84	)	$	(1.54	)

The following outstanding potentially dilutive securities were excluded from the computation of diluted net loss per share for the periods presented because including them would have been antidilutive:

	December 31,
	2023		2022
Stock options issued and outstanding		6,910,915		7,565,071
Restricted stock units		1,488		30,876
Restricted stock awards		175,764		427,401
Total		7,088,167		8,023,348

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Employee Benefit Plan

12 Months Ended

Dec. 31, 2023

Retirement Benefits [Abstract]

Employee Benefit Plan

Note 14. Employee Benefit Plan

The Company sponsors a 401(k) defined contribution plan for its US employees. This plan provides for pre-tax and post-tax contributions for all US employees. Employee contributions are voluntary. Employees may contribute up to 100% of their annual compensation to this plan, as limited by an annual maximum amount as determined by the Internal Revenue Service. The Company may match employee contributions, and may make profit sharing contributions, in amounts to be determined at the Company’s sole discretion. The amount of contributions that the Company made to the 401(k) Plan during the years ended December 31, 2023 and 2022 was $0.1 million and $0.2 million, respectively.

The Company has defined benefit plans, regulated by the Italian laws in which the Company’s non-US employees participate in. The benefits due to employees under the defined benefit plans are calculated based on the employee compensation and the duration of the employment relationship and are paid to the employee upon termination of the employment relationship or retirement. The costs of the defined benefit plans reported in the Company’s consolidated statements of operations and comprehensive loss is determined by an actuarial calculation performed on an annual basis. The actuarial valuation is performed using the “Projected Unit Credit Method” based on the employees’ expected date of separation or retirement.

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Business Combination

12 Months Ended

Dec. 31, 2023

Business Combinations [Abstract]

Business Combination

Note 15. Business Combination

EryDel business combination

On October 20, 2023, the Company completed its acquisition of EryDel, a privately held, late-stage biotechnology company with a lead Phase 3 lead asset, EryDex, that targets the potential treatment of a rare neurodegenerative disease, A-T. The acquisition will drive Quinces’ next stage of growth, as EryDel’s proprietary drug-device combination technology platform and promising late-stage clinical asset represents an opportunity for the Company to expand into several debilitating rare diseases where chronic corticosteroid treatment is the standard of care – or could be in the absence of long-term corticosteroid toxicity. The Company accounted for this acquisition in accordance with ASC 805, Business Combinations, which requires the assets acquired and the liabilities assumed to be measured at fair value at the date of the acquisition. As part of the acquisition of EryDel, the Company recorded deferred tax liability of $5.1 million and uncertain tax position liability of $0.5 million against Goodwill.

The acquisition date fair value of the consideration transferred for EryDel was approximately $66.9 million, which consisted of the following (in thousands):

	Fair Value of
	Consideration
Cash	$	2,615
Quince Therapeutics common stock (7,250,352 shares)		7,164
Contingent consideration		56,128
Settlement of preexisting notes receivable		1,000
Fair value of total consideration transferred	$	66,907

The fair value of the Company’s common stock was determined based on the closing market price of the Company’s common stock of $0.989 per share on the acquisition date. The aggregate stock consideration consists of 6,525,315 shares of Company’s common stock issued at closing and 725,037 shares of common stock (the “Indemnity Holdback Shares”) withheld by the Company for general representations and warranties. The Indemnity Holdback Shares will be issued to the EryDel Shareholders upon the first anniversary of the closing of the acquisition, subject to reduction for any indemnification claims, if any. Any indemnification claims after the acquisition date will result in an adjustment to the consideration transferred if the indemnification claim is made before the end of the measurement period. Any indemnification claim after the end of the measurement period will be recognized in the Company’s consolidated statements of operations and comprehensive loss. The Company has included the total fair value of the stock consideration within additional-paid-in capital and common stock.

The contingent consideration arrangement requires the Company to pay $485.0 million of additional consideration in cash, comprised of up to $5.0 million upon the achievement of a specified development milestone, $25.0 million at NDA acceptance, up to $60.0 million upon the achievement of specified approval milestones, and up to $395.0 million upon the achievement of specified on market and sales milestones. The Company estimated the fair value of the contingent consideration using a probability-weighted discounted cash flow model. This fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement as defined in ASC 820. The key assumptions in applying the income approach are as follows: 15% discount rate, probability of achievement, 0% to 100%, each of the milestones and future revenues from commercialization over the contingent consideration period. No contingent consideration is payable unless and until the milestones are achieved. The fair value of each milestone after the acquisition is reassessed, with the subsequent change in fair value recorded in the Company’s consolidated statements of operations and comprehensive loss. As of December 31, 2023, there were no significant changes in the range of outcomes for the contingent consideration recognized as a result of the EryDel acquisition.

Prior to the acquisition the Company had a preexisting relationship with EryDel. The Company had advanced $1.0 million to EryDel pursuant to a promissory note agreement. At the date of the acquisition, the Company had notes receivable due from EryDel of $1.0 million, including interest receivable of $1,300. As a result of the EryDel Acquisition, the promissory note between EryDel Italy and EryDel was effectively settled and recognized as additional consideration.

The following table summarizes the allocation of the consideration paid for EryDel to the estimated fair value of the assets acquired and liabilities assumed at the acquisition date, with the excess recorded to goodwill (in thousands):

Assets acquired:		Preliminary Purchase Price Allocation
Cash	$		560
Tax assets			10,187
Other current assets			644
Property and equipment, net			238
Operating lease right-of-use assets, net			383
Other non-current assets			14
Intangible assets			61,096
Goodwill			16,929
Total assets acquired			90,051
Liabilities assumed:
Trade payables			(1,685	)
Accrued expenses and other current liabilities			(2,943	)
Debt, non-current			(12,564	)
Other non-current liabilities			(854	)
Deferred tax liability			(5,098	)
Total liabilities assumed			(23,144	)
Fair value of total consideration transferred	$		66,907

The purchase price allocation is preliminary and may change as a result of additional information obtained regarding assets acquired and liabilities assumed and revisions of estimates of fair values of intangible assets and related deferred tax assets and liabilities. The Company will finalize its valuation and the allocation of the purchase price, along with required retrospective adjustments, if any, within a year following the acquisition date.

The fair value of identifiable Acquired IPR&D intangible assets was $60.6 million. IPR&D was determined using the Multi-Period Excess Earnings Method ("MPEEM") under the income approach. MPEEM calculates the economic benefits by determining the income attributable to an intangible asset after the returns are subtracted for contributory assets such as working capital, assembled workforce, and fixed assets. The resulting after-tax net earnings were discounted at 16.6%, a rate commensurate with the risk inherent in the economic benefit projections of the assets. The probability-weighted, projected cash flows were calculated based on projections of revenues and expenses related to the asset and were assumed to extend through a multi-year projection period. The IPR&D has an indefinite useful life, and as such, is not amortized but rather tested for impairment at least annually.

The fair value of tradename intangible assets was $0.5 million. The tradename intangible assets were derived using the relief from royalties method under the income approach, utilizing royalty rate of 0.3%. This approach is used to estimate the cost savings that accrue for the owner of an intangible asset who would otherwise have to pay royalties or licensing fees on revenues earned through the use of the asset if they had not owned the rights to use the assets. The probability-weighted, net after-tax royalty savings are calculated for each year in the remaining economic life of the intangible asset and discounted to present value using a discount rate of 16.6%. The trademark has a useful life of 21 years. The trademark is amortized on a straight-line basis over the useful life.

The excess of the fair value of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill, which is primarily attributed to the assembled workforce and expanded global market opportunities. None of the goodwill is expected to be deductible for income tax purposes. Goodwill is not amortized but is tested for impairment at least annually, refer to Note 16 for this assessment.

The transaction costs associated with the acquisition were approximately $2.5 million, of which $2.3 million were recorded in general and administrative expenses and $0.2 million were recorded in research and development expenses in the consolidated statement of operations and comprehensive loss.

The Company has included the financial results of EryDel in the consolidated financial statements from the date of acquisition. From October 21, 2023 through December 31, 2023, the Company recognized no revenue and a net loss of $3.7 million attributable to EryDel.

The following unaudited pro forma information gives effect to the acquisition of EryDel as if it had been completed on January 1, 2022 (the beginning of the comparable prior reporting period), including pro forma adjustments primarily related to

amortization of acquired intangible assets, tax benefit from release of the valuation allowance and the inclusion of acquisition-related expenses reflected in the revenue and net loss (in thousands):

	For the year ended December, 31
		2023			2022
Revenue		$	—		$	—
Net Loss			(40,265	)		(67,580	)

The 2023 supplemental pro forma earnings were adjusted to exclude $2.5 million of acquisition-related costs incurred in 2023, the 2022 pro forma earnings were adjusted to include these charges.

Novosteo business combination

On May 19, 2022, the Company completed the Novosteo Acquisition. Pursuant to the terms of the Merger Agreement, at the closing of the Novosteo Acquisition (the “Effective Time”), each share of capital stock of Novosteo (the “Novosteo Capital Stock”) that was issued and outstanding immediately prior to the Effective Time was automatically cancelled and converted into the right to receive 0.0911 shares of common stock, par value $0.001 per share, of the Company (the “Company Common Stock”). These shares included options to purchase an aggregate of 507,108 shares of the Company Common Stock upon conversion of the outstanding Novosteo options based on the Company Option Exchange Ratio (as defined in the Merger Agreement), with the awards retaining the same vesting and other terms and conditions as in effect immediately prior to consummation of the Acquisition. These options, as well as 519,216 unvested restricted shares were concluded to be post-combination expense and were excluded from purchase consideration.

The Company has included the financial results of Novosteo in the consolidated financial statements from the date of the Acquisition and recorded immaterial amounts of expenses and earnings since the period from May 19, 2022 through December 31, 2023. The transaction costs associated with the Acquisition were approximately $1.1 million and were recorded in general and administrative expense. The acquisition date fair value of the consideration transferred for Novosteo was approximately $16,502,587, which consisted of 5,000,784 shares at $3.30 per share.

The Company accounted for the Acquisition as a business combination in accordance with ASC 805. The Company applied the acquisition method, which requires the identifiable assets acquired and liabilities assumed be recorded at fair value with limited exceptions. The following table summarizes the fair values of the identifiable assets acquired and liabilities assumed as the final determination of the date of acquisition (in thousands):

	May 19,
	2022
Identifiable assets acquired and liabilities assumed:
Cash and cash equivalents	$	10,593
Prepaid expenses and other current assets		1,040
ROU asset		124
Property and equipment		279
In-process Research and Development		5,900
Accounts payable and accrued liabilities		(1,726	)
Deferred tax liabilities		(532	)
Net assets acquired		15,678
Goodwill	$	825

The final determination of the fair value of assets and liabilities have been completed within the one-year measurement period as required by ASC 805. As part of the valuation analysis, the fair value of the intangible assets was estimated by discounting forecasted risk adjusted cash flows at a rate that approximated the cost of capital of a market participant. Management's forecast of future cash flows was based on the income approach. Significant estimates, all of which are considered Level 3 inputs, were used in the fair value methodology, including the Company's forecast regarding its future operations and likeliness of obtaining approval to sell its products, as well as other market conditions. The Company recorded no measurement period adjustments for the years ended December 31, 2023 and 2022. All subsequent adjustments will be recorded to earnings.

The excess of the fair value of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill, which is primarily attributed to the assembled workforce and expanded market opportunities, for which there is no basis for U.S. income tax purposes. Goodwill amounts are not amortized but are rather tested for impairment at least annually, see Note 16 for this assessment. Goodwill is not deductible for tax purposes.

The Intangible asset balance above is attributable to in-process research and development with an indefinite useful life.

The amounts of Novosteo's net loss was $9.4 million included in the Company's consolidated statement of operations and comprehensive loss for the year ended year ended December 31, 2022. The amount of Novosteo's revenue was $0 for the year ended December 31, 2022. The unaudited pro forma revenue and net loss of the combined entity had the acquisition date been January 1, 2021 are as follows (in thousands):

	For the year ended December 31,
	2022
Revenue	$	262
Net loss		(52,592	)

The 2022 supplemental pro forma earnings were adjusted to exclude $2.2 million of acquisition-related costs incurred in 2022, the 2021 pro forma earnings were adjusted to include these charges. The Company’s consolidated statements of operations and comprehensive loss for the year ended December 31, 2022 include immaterial net revenue and net loss attributable to the Acquisition.

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Intangible Assets

12 Months Ended

Dec. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

Note 16. Intangible Assets

EryDel Intangible Assets

The following table provides details of the carrying amount of the Company's indefinite-lived intangible asset (in thousands):

		As of December 31,
		2023
Unamortized intangible assets:
	In-process research and development	$	60,636
	Impairment charge		—
	Foreign currency translation adjustments		2,561
	Balance as of December 31, 2023	$	63,197

The following table provides details of the carrying amount of the Company's finite-lived intangible asset (in thousands, except useful life):

			For the year ended December 31,
		Useful life	2023
Finite life intangible assets:
	Trade name	21 years	$	460
	Impairment charge			—
	Intangible asset amortization			(4	)
	Foreign currency translation adjustments			19
	Balance as of December 31, 2023		$	475

The Company performs annual impairment reviews of its intangible assets during the fourth fiscal quarter or more frequently if appropriate. The Company did not incur any impairment losses related to its EryDel intangible assets during the year ended December 31, 2023.

Novosteo Intangible Assets

The intangible asset acquired as a result of the Novosteo Acquisition consists of in-process research and development ("IPR&D") related to NOV004, the Company's bone targeting molecule designed to accelerate fracture repair. The value of the IPR&D was determined using discounted probable future cash flows. Significant assumptions used in determining the value of the intellectual property include the initiation of clinical trials and NDA approval with respect to NOV004, probability of reaching various phases of development, costs and cost of goods sold, and the risk adjusted discount rate applied to the cash flows.

The following table provides details of the carrying amount of the Company's indefinite-lived intangible asset (in thousands):

		As of December 31,
		2023
Unamortized intangible assets:
	In-process research and development	$	5,900
	Impairment charge		(5,900	)
	Balance as of December 31, 2023	$	—

In January 2023, the Company decided to discontinue the internal development of NOV004 and pursue out-licensing opportunities. As a result, several of the assumptions used in determining the initial fair value have changed including discount rate and expected cash flows and thus triggered the need for an interim impairment assessment as required under ASC 350. As a result, the fair value was determined to be significantly below its carrying value and the Company recognized an impairment charge of $5.9 million during the year ended December 31, 2023.

On December 22, 2023, the Company, following its prior decision to discontinue internal development of NOV004, approved that certain Mutual Termination of License Agreement (the “Termination Agreement”) by and between the Company and Purdue Research Foundation ("PRF") to terminate the License Agreement dated June 3, 2020, as amended on March 17, 2022, July 22, 2022, and June 23, 2023 (the “License Agreement”). Under the License Agreement, the Company obtained from PRF an exclusive worldwide license under certain bone fracture repair related patents and technology developed by Purdue University, including patents claiming NOV004 and related compounds and use of such compounds in the treatment of bone fractures.

Under the Termination Agreement, the License Agreement was terminated effective as of October 31, 2023. The Company agreed to reimburse PRF for certain fees and costs incurred in connection with the prosecution of the licensed patents prior to termination. The Company also agreed to assign to PRF certain documents and materials developed by the Company in connection with the development of the licensed product under the License Agreement, subject to the Company’s retained right to use such documents and materials for internal research purpose.

Goodwill

The following table summarizes the changes in the carrying amount of goodwill (in thousands):

Balance as of December 31, 2021	$	—
Additions(a)		825
Impairment charge		(825	)
Balance as of December 31, 2022	—
Additions(a)		16,929
Foreign currency translation adjustments		696
Balance as of December 31, 2023	$	17,625

(a) Goodwill additions related to the acquisition of Novosteo in second quarter of 2022 and the acquisition of EryDel in the fourth quarter of 2023 (see Note 15).

There was no amount related to goodwill related to the Novosteo acquisition reflected on the consolidated balance sheet for the Company as of December 31, 2022. In 2022, management performed an impairment evaluation of goodwill related to the Novosteo acquisition after assessing qualitative factors that indicated a possible impairment of goodwill. Under the qualitative assessment, management considers relevant events and circumstances including but not limited to macroeconomic conditions, industry and market considerations, overall Company performance and events directly affecting the Company. It was noted during our assessment that the Company's market capitalization was significantly below its carrying value and a further quantitative analysis was conducted to determine to the extent, if any, the Company's carrying value exceeded its fair value as of September 30, 2022. The quantitative analysis used fair value based on market capitalization adjusted for control premium based on market comparable transactions. This quantitative analysis resulted in the Company's fair value being significantly below its carrying value, resulting in a non-cash goodwill impairment charge of $0.8 million being recorded during the year ended December 31, 2022.

As part of the EryDel Acquisition, the Company recorded goodwill, the excess of the fair value of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired. The Company performed its annual qualitative test for goodwill in the fourth quarter of 2023, the Company concluded that no impairment exists for the year ended December 31, 2023.

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2023

Accounting Policies [Abstract]

Basis of Consolidation

Basis of Consolidation

The accompanying consolidated financial statements include the accounts of Quince Therapeutics, Inc. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation.

Basis of Presentation

Basis of Presentation

The accompanying consolidated financial statements and the notes thereto have been prepared in accordance with accounting principles GAAP pursuant to the instructions of the SEC on Form 10-K through the rules and interpretive releases of the SEC under federal securities law.

Use of Estimates

Use of Estimates

The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and expenses, as well as related disclosure of contingent assets and liabilities. The most significant estimates used in the Company’s consolidated financial statements relate to the determination of the fair value of stock-based awards and other issuances, determination of the fair value of identifiable assets and liabilities in connection with the acquisition of Novosteo, Inc. and EryDel S.p.A., including associated intangible assets and goodwill, contingent consideration, accruals for research and development costs, useful lives of long-lived assets, stock-based compensation and related assumptions, the incremental borrowing rate for leases and income tax uncertainties, including a valuation allowance for deferred tax assets, eligibility of expenses for the Australia research and development refundable tax credits, impairment of intangible assets or goodwill; and contingencies. The Company bases its estimates on historical experience and on various other market specific and other relevant assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ materially from the Company’s estimates.

Foreign Currency Translation and Transactions

Foreign Currency Translation and Transactions

The functional currency of the Company’s wholly-owned subsidiaries are the Australian Dollar and the Euro. The Company's financial results and financial position are translated into U.S. dollars using exchange rates at balance sheet dates for assets and liabilities and using average exchange rates for income and expenses. The resulting translation differences are presented as a separate component of accumulated other comprehensive loss, as a separate component of equity.

Foreign currency transactions are translated into the functional currencies using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses, resulting from the settlement of such transactions and from the re-measurement of monetary assets and liabilities denominated in foreign currencies using exchange rates at balance sheet date and non-monetary assets and liabilities using historical exchange rates, are recognized in the consolidated statements of operations and comprehensive income.

Risk and Uncertainties

Risk and Uncertainties

The Company’s future results of operations involve a number of risks and uncertainties. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, uncertainty of results of clinical trials and reaching milestones, uncertainty of regulatory approval of the Company’s drug candidates, uncertainty of market acceptance of the Company’s drug candidates, competition from substitute products and larger companies, securing and protecting proprietary technology, strategic relationships and dependence on key individuals and sole source suppliers. The Company’s drug candidates will require approvals from the FDA and comparable foreign regulatory agencies prior to commercial sales in their respective jurisdictions. There can be no assurance that any drug candidate will receive the necessary approvals.

Segments

Segments

The Company operates and manages its business as one reportable and operating segment, which is the business of developing and commercializing therapeutics. The Company’s chief executive officer, who is the chief operating decision maker, reviews financial information on an aggregate basis for purposes of allocating and evaluating financial performance. All long-lived assets are maintained in Italy.

Business Combinations

Business Combinations

The Company evaluates acquisitions of assets and other similar transactions to assess whether or not the transaction should be accounted for as a business combination or asset acquisition by first applying a screen to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If the screen is met, the transaction is accounted for as an asset acquisition. If the screen is not met, further determination is required as to whether or not the Company has acquired inputs and processes that have the ability to create outputs, which would meet the requirements of a business.

The Company accounts for business combinations using the acquisition method pursuant to the FASB ASC Topic 805. This method requires, among other things, that results of operations of acquired companies are included in the Company's financial results beginning on the respective acquisition dates, and that identifiable assets acquired and liabilities assumed are recognized at fair value as of the acquisition date. Intangible assets acquired in a business combination are recorded at fair value using one of three valuation approaches, the income approach, the market approach or the cost approach. The Company reviewed the three valuation approaches and determined the income approach was the most appropriate model to approximate fair value for both the Novosteo and EryDel Acquisitions. The income approach model requires assumptions about the timing and amount of future net cash flows, the cost of capital and terminal values from the perspective of a market participant. Any excess of the fair value of consideration transferred (the “Purchase Price”) over the fair values of the net assets acquired is recognized as goodwill. The fair value of identifiable assets acquired and liabilities assumed in certain cases may be subject to revision based on the final determination of fair value during a period of time not to exceed 12 months from the acquisition date. Legal costs, due diligence costs, business valuation costs and all other acquisition-related costs are expensed when incurred.

Intangible Assets

Intangible Assets

Intangible assets with a definite useful life are amortized on a straight-line basis over the estimated useful life of the related assets. Intangible assets with an indefinite useful life are not amortized. Intangible assets acquired in a business combination that are used in research and development activities (regardless of whether they have an alternative future use) shall be considered indefinite lived until the completion or abandonment of the associated research and development efforts. Intangible assets acquired in a business combination are initially recorded at fair value. During the period that those assets are considered indefinite lived, they shall not be amortized but shall be tested for impairment. Once the research and development efforts are completed or abandoned, the entity shall determine the useful life of the assets. An intangible asset shall be tested for impairment annually and more frequently if events or

changes in circumstances indicate that it is more likely than not that the asset is impaired. The Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of the intangible asset is less than its carrying amount, If that is the case, the Company performs a quantitative impairment test, and, if the carrying amount of the Company exceeds its fair value, then the Company will recognize an impairment charge for the amount by which its carrying amount exceeds its fair value, not to exceed the carrying amount of the intangible asset. Qualitative factors to be considered include but are not limited to:

•Cost factors such as increases in raw materials, labor, or other costs that have a negative effect on future expected earnings and cash flows.

•Legal/regulatory factors or progress and results of clinical trials.

•Other relevant entity-specific events such as changes in management, key personnel, strategy, or customers; contemplation of bankruptcy; or litigation that could affect significant inputs used to determine the fair value of the indefinite-lived intangible asset.

•Industry and market considerations such as a deterioration in the environment in which an entity operates, an increased competitive environment.

•Macroeconomic conditions such as deterioration in general economic conditions, limitations on accessing capital, fluctuations in foreign exchange rates, or other developments in equity and credit markets that could affect significant inputs used to determine the fair value of the indefinite-lived intangible asset.

Goodwill

Goodwill

Goodwill represents the excess of the purchase price over the fair value of the net assets acquired as of the acquisition date. Goodwill has an indefinite useful life and is not amortized. The Company reviews its goodwill for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of the Company may exceed its fair value. The Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of the Company is less than its carrying amount, including goodwill. If that is the case, the Company performs a quantitative impairment test, and, if the carrying amount of the Company exceeds its fair value, then the Company will recognize an impairment charge for the amount by which its carrying amount exceeds its fair value, not to exceed the carrying amount of the goodwill.

Contingent Consideration

Contingent Consideration

The Company determines the acquisition date fair value of contingent consideration using a discounted cash flow method, with significant inputs that are not observable in the market and thus represents a Level 3 fair value measurement as defined in ASC Topic 820, Fair Value Measurement. The significant inputs in the Level 3 measurement not supported by market activity included our probability assessments of expected future cash flows related to the Company's acquisition of EryDel in October 2023, during the contingent consideration period, appropriately discounted considering the uncertainties associated with the earnout obligation, and calculated in accordance with the terms of the definitive agreement. The liabilities for the contingent consideration are established at the time of the acquisition and will be evaluated on a quarterly basis based on additional information as it becomes available. Any change in the fair value adjustment is recorded in the earnings of that period. During the year ended December 31, 2023, the Company recorded a $1.6 million adjustment to increase the fair value of its contingent consideration related to the acquisition of EryDel. The adjustment is reflected within operating loss on the consolidated statement of operations and comprehensive loss. Changes in the fair value of the contingent consideration obligations may result from changes in probability assumptions with respect to the likelihood of achieving the various contingent payment obligations. Significant increases or decreases in the inputs noted above in isolation would result in a significantly lower or higher fair value measurement.

Cash, Cash Equivalents and Investments

Cash, Cash Equivalents and Investments

The Company considers all highly liquid investments with maturities of three months or less when purchased to be cash equivalents. Cash equivalents include marketable securities. Management determines the appropriate classification of its investments in debt securities at the time of purchase and at the end of each reporting period. Investments with original maturities beyond three months at the date of purchase and which mature at, or less than twelve months from the balance sheet date are classified as short-term investments. Investments with a maturity beyond twelve months from the balance sheet date are classified as long-term investments. Collectively, cash equivalents, short-term investments and long-term investments are considered available-for-sale and are recorded at fair value. Unrealized gains and losses are recorded as a component of other comprehensive loss in the consolidated statements of operations and included as a separate component of consolidated statements of stockholders’ equity (deficit). Realized gains and losses are included in interest income in the consolidated statements of operations and comprehensive loss.

Premiums (discounts) are amortized (accreted) over the life of the related investment as an adjustment to yield using the straight-line interest method. Dividend and interest income are recognized when earned. These amounts are recorded in “interest income” in the consolidated statements of operations and comprehensive loss.

Property and Equipment, Net

Property and Equipment, Net

Property and equipment are stated at cost and reduced by accumulated depreciation. Depreciation expense is recognized using the straight-line method over the estimated useful lives of the respective assets. Depreciation and amortization begin at the time the asset is placed in service. Maintenance and repairs are charged to expense as incurred, and improvements are capitalized. When assets are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the consolidated balance sheet and any resulting gain or loss is reflected in operations in the period realized.

The useful lives of property and equipment are as follows:

Computer equipment	3 years
Lab equipment	2.5 to 5 years
Finance lease right of use assets	Shorter of estimated useful life or lease term
Leasehold improvement	Shorter of estimated useful life or lease term
Office furniture	4 to 5 years

Concentration of Credit Risk

Concentration of Credit Risk

Cash equivalents, short-term and long-term investments are financial instruments that potentially subject the Company to concentrations of credit risk. The Company invests in money market funds, repurchase agreements, treasury bills and notes, government bonds, and corporate notes. The Company limits its credit risk associated with cash equivalents, short-term and long-term investments by placing them with banks and institutions it believes are highly credit worthy and in highly rated investments. However, cash balances in excess of Federal Deposit Insurance Corporation (FDIC) insured limit of $0.3 million are at risk.

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets

The Company reviews long-lived assets, including property and equipment, for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. An impairment charge would be recorded when estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying amount. Impairment, if any, is assessed using discounted cash flows or other appropriate measures of fair value.

The Company recognized impairment charges of $0.2 million related to the San Diego lease impairment loss and loss on disposal of fixed assets for the year ended December 31, 2022. The Company recognized an impairment charge $0.1 million for the Purdue lease the year ended December 31, 2023.

Leases

Leases

The Company determines if an arrangement includes a lease at inception. Right-of-use lease assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. The right-of-use lease asset includes any lease payments made and excludes lease incentives. Incremental borrowing rate is used in determining the present value of future payments. The Company applies a portfolio approach to the property leases to apply an incremental borrowing rate to leases with similar lease terms. The lease terms may include options to extend or terminate the lease. The Company recognizes the options to extend the lease as part of the right-of-use lease assets and lease liabilities only if it is reasonably certain that the option would be exercised. Lease expense for minimum lease payments is recognized on a straight-line basis over the non-cancelable lease term.

Research and Development Expenses

Research and Development Expenses

Research and development costs are expensed as incurred. Research and development expenses consist primarily of personnel costs for the Company’s research and product development employees. Also included are non-personnel costs such as professional fees payable to third parties for preclinical and clinical studies and research services, laboratory supplies and equipment maintenance, product licenses, and other consulting costs. The Company estimates preclinical and clinical study and research expenses based on the services performed, pursuant to contracts with CROs that conduct and manage preclinical and clinical studies and research services on its behalf. Expenses related to clinical studies are based on estimates of the services received and efforts

expended pursuant to contracts with many research institutions, clinical research organizations and other service providers that conduct and manage clinical studies on the Company's behalf. The financial terms of these agreements are subject to negotiation and vary from contract to contract and may result in uneven payment flows. Generally, these agreements set forth the scope of work to be performed at a fixed fee or unit price. Payments under the contracts are mainly driven by time and materials incurred by these service providers. Payments made to third parties under these arrangements in advance of the performance of the related services by the third parties are recorded as prepaid expenses until the services are rendered. Expenses related to clinical studies are generally recorded based on the timing of when services that have been performed on the Company’s behalf by the service providers, clinical trial budgets and in accordance with the contracts and related amendments. The determination of timing involves reviewing open contracts and purchase orders, communicating with applicable personnel to identify the timing of when services that have been performed on the Company’s behalf and estimating the level of service performed and the associated cost incurred for the service when the Company has not yet been invoiced or otherwise notified of actual cost. The Company periodically confirms the accuracy of estimates with the service providers and makes adjustments if necessary. Examples of estimated clinical expenses include:

•fees paid to CROs in connection with clinical studies;

•fees paid to investigative sites in connection with clinical studies;

•fees paid to contract manufacturers in connection with the production of clinical study materials; and

•fees paid to vendors in connection with preclinical development activities.

If the actual timing of the performance of services or the level of effort varies from the original estimates, the Company will adjust the prepaid or accrual accordingly. Payments associated with licensing agreements to acquire exclusive licenses to develop, use, manufacture and commercialize products that have not reached technological feasibility and do not have alternate commercial use are expensed as incurred.

Patents Costs

Patent Costs

The Company has no historical data to support a probable future economic benefit for the arising patent applications, filing and prosecution costs. Therefore, patent costs are expensed as incurred.

Stock-Based Compensation

Stock-Based Compensation

The Company accounts for stock-based compensation arrangements with employees in accordance with ASC 718, Compensation—Stock Compensation. Stock-based awards granted include stock options with service-based vesting. ASC 718 requires the recognition of compensation expense, using a fair value-based method, for costs related to all stock-based payments. The Company’s determination of the fair value of stock options with service-based vesting on the date of grant utilizes the Black-Scholes option-pricing model and is impacted by its common stock price as well as other variables including: but not limited to, expected term that options will remain outstanding, expected common stock price volatility over the term of the option awards, risk-free interest rates and expected dividends. The fair value of a stock-based award is recognized over the period during which an optionee is required to provide services in exchange for the option award, known as the requisite service period (usually the vesting period) on a straight-line basis. Stock-based compensation expense is recognized based on the fair value determined on the date of grant and is reduced for forfeitures as they occur. Stock options exercised are issued new shares of our common stock.

Income Taxes

Income Taxes

The Company accounts for income taxes under the asset and liability method. Current income tax expense or benefit represents the amount of income taxes expected to be payable or refundable for the current year. Deferred income tax assets and liabilities are determined based on differences between the consolidated financial statement reporting and tax bases of assets and liabilities and net operating loss and credit carryforwards and are measured using the enacted tax rates and laws that will be in effect when such items are expected to reverse. Deferred income tax assets are reduced, as necessary, by a valuation allowance when management determines it is more likely than not that some or all of the tax benefits will not be realized.

The Company accounts for uncertain tax positions in accordance with ASC 740-10, Accounting for Uncertainty in Income Taxes. The Company assesses all material positions taken in any income tax return, including all significant uncertain positions, in all tax years that are still subject to assessment or challenge by relevant taxing authorities. Assessing an uncertain tax position begins with the initial determination of the position’s sustainability and is measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. As of each balance sheet date, unresolved uncertain tax positions must be reassessed, and the Company will determine whether (i) the factors underlying the sustainability assertion have changed and (ii) the amount of the recognized tax benefit is still appropriate. The recognition and measurement of tax benefits requires significant judgment. Judgments concerning the recognition and measurement of a tax benefit might change as new information becomes available.

The Company includes any penalties and interest expense related to income taxes as a component of other expense, net and interest expense, net, as necessary.

Comprehensive Loss

Comprehensive Loss

The Company is required to report all components of comprehensive loss, including net loss, in the consolidated financial statements in the period in which they are recognized. Comprehensive loss is defined as a change in equity of a business enterprise during a period, resulting from transactions and other events and circumstances from non-owner sources. The Company had an unrealized gain and loss from its available-for sale securities and cumulative translation adjustment during the years ended December 31, 2023 and December 31, 2022, respectively, which are considered other comprehensive loss.

Net Loss per Share

Net Loss per Share

Basic net loss per share is calculated by dividing the net loss by the weighted-average number of common shares outstanding during the period, without consideration for potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares and common share equivalents of potentially dilutive securities outstanding for the period. For purposes of the diluted net loss per share calculation and common stock options are considered to be potentially dilutive securities. Because the Company reported a net loss for the years ended December 31, 2023 and December 31, 2022, and the inclusion of the potentially dilutive securities would be antidilutive, diluted net loss per share is the same as basic net loss per share for both periods.

Recent Accounting Pronouncements Adopted

Recent Accounting Pronouncements Adopted

Financial Instruments—Credit Losses: In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments which amends the principles around the recognition of credit losses by mandating entities incorporate an estimate of current expected credit losses when determining the value of certain assets. The guidance also amends reporting around allowances for credit losses on available-for-sale marketable securities. In November 2019, the FASB issued ASU 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815) and Leases (Topic 842): Effective Dates, which established that a one-time determination of the effective date for ASU 2016-13 would be based on the Company’s SEC reporting status as of November 15, 2019. The Company was a “smaller reporting company” as defined by Item 10 of Regulation S-K, and therefore, ASU 2016-13 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. This guidance helps to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in Topic 326 replace the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The Company has adopted the new guidance as of January 1, 2023, and it did not have a material impact on its consolidated financial statements and related disclosures.

For available-for-sale debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value and recognized in interest and other income, net in the statement of operations and comprehensive loss. If neither criteria is met, the Company evaluates whether the decline in fair value is related to credit-related factors or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. Credit-related impairment losses, limited by the amount that the fair value is less than the amortized cost basis, are recorded through an allowance for credit losses in interest and other income, net.

Any unrealized losses from declines in fair value below the amortized cost basis as a result of non-credit factors are recognized in accumulated other comprehensive loss, net of tax as a separate component of stockholders’ equity, along with unrealized gains. Realized gains and losses and declines in fair value, if any, on available-for-sale securities are included in interest and other income, net in the statement of operations and comprehensive loss.

For purposes of identifying and measuring credit-related impairments, the Company’s policy is to exclude applicable accrued interest from both the fair value and amortized cost basis of the related security. The Company has elected to write-off uncollectible accrued interest receivable balances in a timely manner, which is defined by the Company as when interest due becomes 90 days delinquent. The accrued interest write-off will be recorded by reversing interest income. Accrued interest receivable is recorded in other current assets on the balance sheets.

Recent Accounting Pronouncements Not Yet Adopted

The following are new accounting pronouncements that the Company is evaluating for future impacts on its consolidated financial statements:

Improvements to Income Tax Disclosures (ASC 740); In December 2023, the FASB issued ASU No. 2023-09, "Improvements to Income Tax Disclosures." This ASU establishes new income tax disclosure requirements in addition to modifying and eliminating certain existing requirements. Under this ASU, entities must consistently categorize and provide greater disaggregation of information in the rate reconciliation. They must also further disaggregate income taxes paid. The ASU is effective in December 2024 under a prospective approach. Early adoption is permitted. Adoption of this ASU is not expected to have a material impact on the Company's consolidated financial statements.

Accounting Standard Update 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”): In November 2023, the FASB issued ASU 2023-07, which is intended to improve reportable segment disclosure requirements, primarily through additional disclosures about significant segment expenses, including for single reportable segment entities. The standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments should be applied retrospectively to all prior periods presented in the financial statements. The Company is evaluating the disclosure requirements related to the new standard.

All other newly issued accounting pronouncements not yet effective have been deemed either immaterial or not applicable.

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2023

Accounting Policies [Abstract]

Schedule of Useful Lives of Property and Equipment

The useful lives of property and equipment are as follows:

Computer equipment	3 years
Lab equipment	2.5 to 5 years
Finance lease right of use assets	Shorter of estimated useful life or lease term
Leasehold improvement	Shorter of estimated useful life or lease term
Office furniture	4 to 5 years

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Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2023

Fair Value Disclosures [Abstract]

Schedule of Financial Assets and Liabilities to Fair Value Measurements on Recurring Basis

Financial assets and liabilities subject to fair value measurements on a recurring basis and the level of inputs used in such measurements by major security type as of December 31, 2023 and 2022 are presented in the following tables (in thousands):

	Fair Value Measurements at December 31, 2023
	Total		Level 1		Level 2		Level 3
Assets:
Money market funds	$	4,285	$	4,285	$	—	$	—
Certificates of Deposit		729		—		729		—
Government and agency notes		68,524		3,971		64,553		—
Total assets	$	73,538	$	8,256	$	65,282	$	—
Liabilities:
Accrued earnout		57,706		—		—		57,706
Long-term debt		13,429		—		—		13,429
Total liabilities	$	71,135	$	—	$	—	$	71,135

	Fair Value Measurements at December 31, 2022
	Total		Level 1		Level 2		Level 3
Money market funds	$	10,988	$	10,988	$	—	$	—
Certificates of Deposit		6,102		—		6,102		—
Repurchase Agreements		9,000		—		9,000		—
Corporate notes		12,411		—		12,411		—
Government and agency notes		50,766		—		50,766		—
Municipal notes		506		—		506		—
Total	$	89,773	$	10,988	$	78,785	$	—

Schedule of Changes in Present Value of Acquisition Related Accrued Earnouts of Contingent Consideration Liability

The following table reflects the changes in present value of acquisition related accrued earnouts of contingent consideration liability using significant unobservable inputs (Level 3) for the year ended December 31, 2023 follows:

(in thousands)
Beginning Balance as of January 1, 2023	$	—
Acquisition date fair value of contingent consideration		56,128
Change in fair value of contingent consideration		1,578
Ending Balance as of December 31, 2023	$	57,706

Summary of Quantitative Information About Level 3 Fair Value Measurements

The following table summarizes the quantitative information including the unobservable inputs related to the Company's acquisition related accrued earnout as of December 31, 2023:

Quantitative Information about Level 3 Fair Value Measurements
(in thousands)	Fair Value at		Valuation	Unobservable Input	Range (Input Used)
	December 31,		Technique
	2023
Accrued earnout	$	57,706	Expected present	Probability of achieving earnout	0% - 100%
			value	objectives per the purchase agreement

The following table summarizes the quantitative information including the unobservable inputs related to the Company's acquisition related long term debt as of December 31, 2023:

Quantitative Information about Level 3 Fair Value Measurements
(in thousands)	Fair Value at		Valuation	Unobservable Input	Discount Rate (Input Used)
	December 31,		Technique
	2023
EIB loan	$	13,429	Expected present	Credit quality of company		13	%
			value	and credit spreads for comparable debt

Fair value of the Level 3 EIB Debt

The following table presents the changes in the fair value of the Level 3 EIB Debt:

(in thousands)
Beginning Balance as of January 1, 2023	$	—
Acquisition of EIB Debt		12,564
Change in fair value		338
Due to foreign currency translation		527
Ending Balance as of December 31, 2023	$	13,429

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Cash, Cash Equivalents and Investments (Tables)

12 Months Ended

Dec. 31, 2023

Fair Value Disclosures [Abstract]

Summary of Fair Values of Cash, Cash Equivalents, and Short-Term Investments Measured at Fair Value on Recurring Basis

The following tables categorize the fair values of cash, cash equivalents, short-term investments and long-term investments measured at fair value on a recurring basis on our balance sheets (in thousands):

	December 31,
	2023		2022
Cash and cash equivalents:
Cash	$	1,521	$	3,986
Money market funds		4,285		10,988
Repurchase agreements		—		9,000
Government and agency notes		14,946		20,605
Total cash and cash equivalents	$	20,752	$	44,579
Short-term investments:
Certificates of deposit	$	729	$	5,390
Municipal notes		—		506
Corporate notes		—		12,411
Government and agency notes		53,578		27,295
Total short-term investments	$	54,307	$	45,602
Long-term investments
Certificates of deposit	$	—	$	712
Government and agency notes		—		2,866
Total long-term investments	$	—	$	3,578

Summary of Available-for-Sale Securities

The following table summarizes the available-for-sale securities (in thousands):

	Fair Value Measurements at December 31, 2023
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Money market funds	$	4,285	$	—	$	—		$	4,285
Certificates of Deposit		735		—		(6	)		729
Government and agency notes		68,528		13		(17	)		68,524
Total cash equivalents and investments	$	73,548	$	13	$	(23	)	$	73,538
Classified as:
Cash equivalents (original maturities within 90 days)								$	19,231
Short-term investments (maturities within 1 year)									54,307
Total cash equivalents and investments								$	73,538

	Fair Value Measurements at December 31, 2022
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Money market funds	$	10,988	$	—	$	—		$	10,988
Certificates of Deposit		6,237		1		(136	)		6,102
Repurchase Agreements		9,000		—		—			9,000
Corporate notes		12,575		—		(164	)		12,411
Government and agency notes		51,020		4		(258	)		50,766
Municipal notes		510		—		(4	)		506
Total cash equivalents and investments	$	90,330	$	5	$	(562	)	$	89,773
Classified as:
Cash equivalents (original maturities within 90 days)								$	40,593
Short-term investments (maturities within 1 year)									45,602
Long-term investments (maturities beyond 1 year)									3,578
Total cash equivalents and investments								$	89,773

Summary of Unrealized Losses of Company's Investments in Debt Securities Measured at Fair Value

The table below summarizes the unrealized losses of the Company's investments in debt securities measured at fair value as of December 31, 2023 (in thousands):

	Less than twelve months				Twelve months or greater					Total
	Fair value		Gross unrealized loss		Fair value		Gross unrealized loss			Fair value		Gross unrealized loss
Certificates of deposit	$	—	$	—	$	729	$	(6	)	$	729	$	(6	)
Government and agency notes		3,966		—		2,975		(17	)		6,941		(17	)
Total cash equivalents and investments	$	3,966	$	—	$	3,704	$	(23	)	$	7,670	$	(23	)

Schedule of the Ccontractual Maturities of our Investments in Debt Securities Measured at Fair Value

The table below summarizes the contractual maturities of the Company's investments in debt securities measured at fair value as of December 31, 2023 (in thousands):

	Maturities by Period
	Total		Less Than 1 Year		1-5 Years		6-10 Years		More Than 10 Years
Fair value of debt securities	$	54,307	$	54,307	$	—	$	—	$	—

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Balance Sheet Components (Tables)

12 Months Ended

Dec. 31, 2023

Balance Sheet Components [Abstract]

Schedule of Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following (in thousands):

	December 31,
	2023		2022
Prepaid expenses	$	365	$	223
Prepaid insurance		809		977
Prepaid research and development expenses		133		1,088
Australia research and development refundable tax credit		—		1,003
Short-term Italian research and development refundable tax credit		993		—
Other current assets		81		276
Total prepaid expenses and other current assets	$	2,381	$	3,567

Schedule of Other Assets

Other assets consisted of the following (in thousands):

	December 31,
	2023		2022
VAT receivable	$	3,463	$	—
Long-term Italian research and development refundable tax credit		4,993		—
Total other assets	$	8,456	$	—

Schedule of Assets Held for Sale

Assets held for sale consist of the following (in thousands):

	December 31,
	2023		2022
Assets held for sale	$	10	$	—
Total assets held for sale	$	10	$	—

Schedule of Property and Equipment, Net

Property and equipment, net consisted of the following (in thousands):

	December 31,
	2023			2022
Computer equipment	$	36		$	18
Computer software		30			—
Lab equipment		486			415
Finance lease right of use assets		—			124
Leasehold improvement		36			21
Office furniture		153			—
Less: accumulated amortization and depreciation		(507	)		(185	)
Property and equipment, net	$	234		$	393

Schedule of Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):

	December 31,
	2023		2022
Personnel expenses	$	2,340	$	1,130
Professional fees		211		234
Research and development expenses		564		497
Current portion of operating lease liabilities		64		377
Current portion of finance lease liability		—		76
Other		257		185
Total accrued expenses and other current liabilities	$	3,436	$	2,499

Summary of Accrued Severance and Related Expens

Below is the severance accrual activity included in the personnel expenses in the above table related to a cost reduction program during the years ended December 31, 2023 and December 31, 2022 (in thousands):

	For the year ended December 31,
	2023			2022
Beginning accrued severance	$	—		$	—
Incurred during the period		770			3,942
Severance paid during the period		(429	)		(3,942	)
Ending accrued severance	$	341		$	—

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Leases (Tables)

12 Months Ended

Dec. 31, 2023

Leases [Abstract]

Supplemental Balance Sheet Information Related To Leases

Supplemental balance sheet information related to leases as follows (in thousands except lease terms and discount rates):

	December 31, 2023			December 31, 2022
Operating lease right of use asset, net	$	385		$	291
Short-term operating lease liability		64			377
Long-term operating lease liability		321			—
	$	385		$	377
Finance lease right of use asset		—			124
Finance lease accumulated amortization		—			(50	)
Total finance lease right of use asset, net	$	—		$	74
Weighted average remaining lease term
Operating leases	5.4 years			0.9 years
Finance leases		—		1.0 year
Weighted average discount rate
Operating leases		7.95	%		5.71	%
Finance leases		—	%		4.45	%
Year ended December 31,	Operating Lease
2024		91
2025		91
2026		88
2027		81
2028		69
Thereafter		48
Total lease payments		469
Less: imputed interest		(83	)
Total remaining lease liability	$	385

Summary of Lease Costs

Lease costs for the years ended December 31, 2023 and 2022 were approximately:

	Years ended December 31,
	2023		2022
Lease costs:
Finance lease amortization of right of use assets	$	6	$	50
Operating lease costs		266		572
Short-term lease costs		96		75
Total lease costs	$	368	$	697

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Long-term Debt (Tables)

12 Months Ended

Dec. 31, 2023

Debt Disclosure [Abstract]

Schedule of Future Minimum Principal Payments

Future minimum principal payments, as of December 31, 2023 are as follows (in thousands):

Year Ending December 31,	Amount
2024	$	—
2025		—
2026		11,053
2027 and thereafter		—
Total future minimum payments		11,053
Imputed interest		2,376
Total Debt as of December 31, 2023	$	13,429

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Equity Incentive Plans (Tables)

12 Months Ended

Dec. 31, 2023

Summary of Employee and Non-Employee Stock-Based Compensation Expense

The following table summarizes employee and non-employee stock-based compensation expense for the years ended December 31, 2023 and 2022 and the allocation within the consolidated statements of operations and comprehensive loss (in thousands):

	2023		2022
General and administrative expense	$	4,003	$	10,225
Research and development expense		1,217		6,393
Total stock-based compensation	$	5,220	$	16,618

Service Based Stock Options

Summary of Stock Options Activity

Activity for service-based stock options under the Quince 2019 Plan is as follows:

	Number of Options and Unvested Shares			Weighted Average Exercise Price		Weighted average remaining contractual life (years)		Aggregate intrinsic value
								(In thousands)
Balance at December 31, 2021		5,571,293		$	28.70		8.26	$	15,687
Options granted		2,051,058			8.13	—		—
Options exercised		(102,152	)		1.45	—		—
Options cancelled / forfeited		(4,200,488	)		29.30	—		—
Balance at December 31, 2022		3,319,711		$	16.07		4.77	$	65
Options granted		3,346,958			1.03	—		—
Options exercised		(258,705	)		0.42	—		—
Options cancelled / forfeited		(2,140,786	)		16.52	—		—
Balance at December 31, 2023		4,267,178		$	5.00		8.85	$	197
Options vested and expected to vest as of December 31, 2023		4,267,178			5.00		8.85		197
Options exercisable at December 31, 2023		1,109,464		$	14.09		7.32	$	34

Summary of Weighted Average Assumptions to Calculate the Fair Value of Stock-Based Compensation

The following weighted average assumptions were used to calculate the fair value of stock-based compensation for the years ended December 31, 2023 and 2022:

	2023			2022
Expected volatility		106.36	%		89.98	%
Expected dividend yield		—	%		—	%
Expected term (in years)		6.22			6.23
Risk-free interest rate		4.01	%		2.67	%

Service Based Stock Options | Novosteo [Member]

Summary of Stock Options Activity

Activity for service-based stock options under the 2019 Novosteo Plan is as follows:

	Number of Options and Unvested Shares			Weighted Average Exercise Price		Weighted average remaining contractual life (years)		Aggregate intrinsic value
								(In thousands)
Balance at December 31, 2021		—		$	—		—	$	—
Options assumed		507,648			0.55		—		—
Options exercised		—			—		—		—
Options cancelled / forfeited		(4,543	)		0.55		—		—
Balance at December 31, 2022		503,105		$	0.55		9.23	$	44
Options granted		—			—		—		—
Options exercised		(105,808	)		0.55		—		40
Options cancelled / forfeited		(86,866	)		0.55		—		—
Balance at December 31, 2023		310,431		$	0.55		8.23	$	155
Options vested and expected to vest as of December 31, 2023		310,431			0.55		8.23		155
Options exercisable as of December 31, 2023		135,812		$	0.55		8.23	$	68

Service Based Stock Options | 2022 Inducement Plan

Summary of Stock Options Activity

Activity for service-based stock options under the 2022 Inducement Plan is as follows:

	Number of Options and Unvested Shares			Weighted Average Exercise Price		Weighted average remaining contractual life (years)		Aggregate intrinsic value
								(In thousands)
Balance at December 31, 2021		—		$	—		—	$	—
Options granted		3,744,255			2.98		—		—
Options exercised		—			—		—		—
Options cancelled / forfeited		(2,000	)		2.98		—		—
Balance at December 31, 2022		3,742,255		$	2.98		9.39	$	—
Options granted		—			—		—		—
Options exercised		—			—		—		—
Options cancelled / forfeited		(1,408,949	)		2.98		—		—
Balance at December 31, 2023		2,333,306		$	2.98		8.39	$	—
Options vested and expected to vest as of December 31, 2023		2,333,306			2.98		8.39		—
Options exercisable as of December 31, 2023		923,599		$	2.98		8.39	$	—

Restricted Stock Awards

Summary of Stock Options Activity

Restricted Stock Awards

	Restricted Stock Awards Outstanding
	Number of Shares			Weighted Average Grant Date Fair Value
Unvested - December 31, 2022		427,401		$	3.30
RSAs issued	—			—
RSAs vested		(188,344	)		3.30
RSAs cancelled		(63,293	)		3.30
Unvested - December 31, 2023		175,764		$	9.90

Restricted Stock Units

Summary of Stock Options Activity

The following table summarizes activity under the Company’s RSUs from the Quince 2019 Plan and related information:

	Restricted Stock Units Outstanding
	Number of Shares			Weighted Average Grant Date Fair Value
Unvested - December 31, 2022		30,876		$	4.30
RSUs granted	—			—
RSUs vested		(10,200	)		4.30
RSUs cancelled		(19,188	)		4.30
Unvested - December 31, 2023		1,488		$	4.30

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Common Stock (Tables)

12 Months Ended

Dec. 31, 2023

Equity [Abstract]

Schedule of Reserved Shares of Common Stock for Future Issuance

The Company had reserved shares of common stock for future issuance as follows:

	December 31,
	2023		2022
Options issued and outstanding under the Quince 2019 Stock Plan		4,267,178		3,319,711
Shares available for issuance under Quince 2019 Stock Plan		4,005,784		3,747,309
Shares available for issuance under the Employee Stock Purchase Plan		1,494,530		1,133,165
Options issued and outstanding under the Novosteo 2019 Plan		310,431		503,105
Shares available for issuance under Novosteo 2019 Plan		246,797		41,880
Options issued and outstanding under the 2022 Inducement Plan		2,333,306		3,742,255
Shares available for issuance under 2022 Inducement Plan		1,666,694		257,745
Total		14,324,720		12,745,170

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Schedule of Loss Before Income Taxes

The components of the Company's loss before income taxes were as follows (in thousands):

	Year ended December 31,
	2023			2022
United States	$	(27,375	)	$	(48,191	)
International		(4,207	)		(3,753	)
Total	$	(31,582	)	$	(51,944	)

Schedule of Components of Benefit for Income Taxes

The components of the Company's benefit for income taxes were as follows:

		Year ended December 31,
(in thousands)		2023				2022
Current expense (benefit):
Federal	$		—		$		—
State			—				—
Foreign			61				—
Total current expense (benefit):			61				—
Deferred expense (benefit):
Federal			(248	)			284
State			—				—
Foreign			(10	)			—
Total deferred expense (benefit):			(258	)			284
Total income tax expense (benefit)	$		(197	)	$		284

Schedule of Provision for Income Taxes Differs From the Amount Expected by Applying the Federal Statutory Rate to Loss Before Taxes

The provision for income taxes differs from the amount expected by applying the federal statutory rate to the loss before taxes as follows:

	Year ended December 31,
	2023				2022
Federal statutory income tax rate		21.00		%		21.00		%
State income taxes		4.47				0.89
Income tax credits		1.07				1.49
Stock based compensation		(26.35	)			(0.82	)
Non-deductible expenses and others		(1.25	)			(3.38	)
Change in valuation allowance		1.68				(18.63	)
		0.62		%		0.55		%

Schedule of Components of Deferred Tax Assets

As of December 31, 2023 and 2022, the components of the Company’s deferred tax assets are as follows (in thousands):

	Year ended December 31,
	2023			2022
Deferred tax asset:
Federal and State net operating loss carryforwards	$	81,881		$	49,481
Stock based compensation		2,401			9,667
Other accruals		527			515
Capitalized research and development expense		3,220			3,094
Tax credits		8,343			7,970
Disallowed interest expense carryforward		1,043			—
Gross deferred tax asset		97,415			70,727
Valuation allowance		(85,111	)		(69,692	)
Total deferred tax assets		12,304			1,035
Deferred tax liabilities:
Property and equipment		—			(11	)
Capitalized leases		—			(32	)
IP R&D		(17,608	)		(1,239	)
Gross deferred tax liabilities		(17,608	)		(1,282	)
Net deferred tax liabilities	$	(5,304	)	$	(247	)

Schedule of Reconciliation of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):

	Year ended December 31,
	2023		2022
Beginning balance	$	3,688	$	3,249
Additions for tax positions taken in a prior year		200		—
Additions for tax positions taken in a current year		451		439
Ending balance	$	4,339	$	3,688

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Net Loss Per Share (Tables)

12 Months Ended

Dec. 31, 2023

Earnings Per Share [Abstract]

Schedule of Computation of Basic and Diluted Net Loss Per Share

The following table sets forth the computation of basic and diluted net loss per share (in thousands except for share and per share amounts):

	December 31,
	2023			2022
Numerator:
Net loss	$	(31,385	)	$	(51,660	)
Denominator:
Weighted average common shares outstanding		37,237,149			33,496,534
Net loss per share, basic and diluted	$	(0.84	)	$	(1.54	)

Schedule of Outstanding Potentially Dilutive Ordinary Shares Excluded from Calculation of Diluted Net Loss Per Share

The following outstanding potentially dilutive securities were excluded from the computation of diluted net loss per share for the periods presented because including them would have been antidilutive:

	December 31,
	2023		2022
Stock options issued and outstanding		6,910,915		7,565,071
Restricted stock units		1,488		30,876
Restricted stock awards		175,764		427,401
Total		7,088,167		8,023,348

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Business Combination (Tables)

12 Months Ended

Dec. 31, 2023

Business Acquisition [Line Items]

Schedule of Fair Values of Assets Acquired and Liabilities Assumed

The following table summarizes the fair values of the identifiable assets acquired and liabilities assumed as the final determination of the date of acquisition (in thousands):

	May 19,
	2022
Identifiable assets acquired and liabilities assumed:
Cash and cash equivalents	$	10,593
Prepaid expenses and other current assets		1,040
ROU asset		124
Property and equipment		279
In-process Research and Development		5,900
Accounts payable and accrued liabilities		(1,726	)
Deferred tax liabilities		(532	)
Net assets acquired		15,678
Goodwill	$	825

Schedule of Revenue and Net Loss of the Combined Entity

The unaudited pro forma revenue and net loss of the combined entity had the acquisition date been January 1, 2021 are as follows (in thousands):

	For the year ended December 31,
	2022
Revenue	$	262
Net loss		(52,592	)

Ery Del [Member]

Business Acquisition [Line Items]

Schedule of Fair Value of the Total Purchase Consideration Transferred

The acquisition date fair value of the consideration transferred for EryDel was approximately $66.9 million, which consisted of the following (in thousands):

	Fair Value of
	Consideration
Cash	$	2,615
Quince Therapeutics common stock (7,250,352 shares)		7,164
Contingent consideration		56,128
Settlement of preexisting notes receivable		1,000
Fair value of total consideration transferred	$	66,907

Schedule of Fair Values of Assets Acquired and Liabilities Assumed

The following table summarizes the allocation of the consideration paid for EryDel to the estimated fair value of the assets acquired and liabilities assumed at the acquisition date, with the excess recorded to goodwill (in thousands):

Assets acquired:		Preliminary Purchase Price Allocation
Cash	$		560
Tax assets			10,187
Other current assets			644
Property and equipment, net			238
Operating lease right-of-use assets, net			383
Other non-current assets			14
Intangible assets			61,096
Goodwill			16,929
Total assets acquired			90,051
Liabilities assumed:
Trade payables			(1,685	)
Accrued expenses and other current liabilities			(2,943	)
Debt, non-current			(12,564	)
Other non-current liabilities			(854	)
Deferred tax liability			(5,098	)
Total liabilities assumed			(23,144	)
Fair value of total consideration transferred	$		66,907

Schedule of Revenue and Net Loss of the Combined Entity

The following unaudited pro forma information gives effect to the acquisition of EryDel as if it had been completed on January 1, 2022 (the beginning of the comparable prior reporting period), including pro forma adjustments primarily related to

amortization of acquired intangible assets, tax benefit from release of the valuation allowance and the inclusion of acquisition-related expenses reflected in the revenue and net loss (in thousands):

	For the year ended December, 31
		2023			2022
Revenue		$	—		$	—
Net Loss			(40,265	)		(67,580	)

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Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2023

Schedule of Intangible Assets [Line Items]

Schedule of Carrying Amount of Finite-Lived Intangible Asset

The following table provides details of the carrying amount of the Company's finite-lived intangible asset (in thousands, except useful life):

			For the year ended December 31,
		Useful life	2023
Finite life intangible assets:
	Trade name	21 years	$	460
	Impairment charge			—
	Intangible asset amortization			(4	)
	Foreign currency translation adjustments			19
	Balance as of December 31, 2023		$	475

Schedule carrying amount of goodwill

The following table summarizes the changes in the carrying amount of goodwill (in thousands):

Balance as of December 31, 2021	$	—
Additions(a)		825
Impairment charge		(825	)
Balance as of December 31, 2022	—
Additions(a)		16,929
Foreign currency translation adjustments		696
Balance as of December 31, 2023	$	17,625

(a) Goodwill additions related to the acquisition of Novosteo in second quarter of 2022 and the acquisition of EryDel in the fourth quarter of 2023 (see Note 15).

Ery Del [Member]

Schedule of Intangible Assets [Line Items]

Schedule of Carrying Amount of Indefinite-Lived Intangible Asset

The following table provides details of the carrying amount of the Company's indefinite-lived intangible asset (in thousands):

		As of December 31,
		2023
Unamortized intangible assets:
	In-process research and development	$	60,636
	Impairment charge		—
	Foreign currency translation adjustments		2,561
	Balance as of December 31, 2023	$	63,197

Novosteo [Member]

Schedule of Intangible Assets [Line Items]

Schedule of Carrying Amount of Indefinite-Lived Intangible Asset

The following table provides details of the carrying amount of the Company's indefinite-lived intangible asset (in thousands):

		As of December 31,
		2023
Unamortized intangible assets:
	In-process research and development	$	5,900
	Impairment charge		(5,900	)
	Balance as of December 31, 2023	$	—

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Organization - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands			12 Months Ended
	Oct. 20, 2023	Jan. 27, 2023	Dec. 31, 2023	Dec. 31, 2022	May 09, 2022
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Common stock, par value			$ 0.001	$ 0.001
Common stock, shares			42,973,215	36,136,480
NDA Acceptance Under Contigent Consideration	$ 25,000
Entity incorporation date			2012-06
Accumulated deficit			$ (319,644)	$ (288,259)
Cash, cash equivalents, and short-term investments			$ 75,100
Stock Agreement
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Percentage of issued and outstanding Common Stock		7.50%
Milestone payments		$ 150,000
Approval Milestones
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Milestone Payment	$ 60,000
Ery Del [Member]
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Common stock, shares	6,525,315
Additional common stock shares issued	725,037
Aggregate potential cash payments under contigent rights	$ 485,000
Amount payable upon achievement of specified milestone.	5,000
NDA Acceptance Under Contigent Consideration	25,000
Milestone achievement related to market and sales	395,000
Ery Del [Member] | Approval Milestones
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Milestone Payment	$ 60,000
Merger Agreement
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Automatically cancelled and converted common stock					0.0911
Common stock, par value					$ 0.001
Common stock, shares					5,520,000
Options outstanding assumed					507,108

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Summary of Significant Accounting Policies - Additional Information (Details) $ in Millions	12 Months Ended
	Dec. 31, 2023 USD ($) Segment
Summary Of Significant Accounting Policies [Line Items]
Number of reportable segment | Segment	1
Number of operating segment | Segment	1
Impairment charges	$ 0.1
Company's limit for FDIC	0.3
Ery Del [Member]
Summary Of Significant Accounting Policies [Line Items]
Fair value of contingent consideration related to acquisition	1.6
San Diego, California
Summary Of Significant Accounting Policies [Line Items]
Asset impairment charge related to lease impairment loss and loss on disposal of fixed assets	$ 0.2

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Summary of Significant Accounting Policies - Schedule of Useful Lives of Property and Equipment (Details)	Dec. 31, 2023
Computer Equipment
Property Plant And Equipment [Line Items]
Useful lives of property and equipment	3 years
Lab Equipment | Minimum
Property Plant And Equipment [Line Items]
Useful lives of property and equipment	2 years 6 months
Lab Equipment | Maximum
Property Plant And Equipment [Line Items]
Useful lives of property and equipment	5 years
Finance Lease Right of Use Assets
Property Plant And Equipment [Line Items]
Useful Estimated lives of property and equipment	us-gaap:UsefulLifeShorterOfTermOfLeaseOrAssetUtilityMember
Leasehold Improvement
Property Plant And Equipment [Line Items]
Useful Estimated lives of property and equipment	us-gaap:UsefulLifeShorterOfTermOfLeaseOrAssetUtilityMember
Office Furniture | Minimum
Property Plant And Equipment [Line Items]
Useful lives of property and equipment	4 years
Office Furniture | Maximum
Property Plant And Equipment [Line Items]
Useful lives of property and equipment	5 years

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Fair Value Measurements - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Fair Value Disclosures [Abstract]
Fair value assets level 1 to level 2	$ 0	$ 0
Fair value assets level 2 to level 1	0	0
Fair value assets transfers into level 3	0	0
Fair value assets transfers out of level 3	$ 0	$ 0

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Fair Value Measurements - Schedule of Financial Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Schedule Of Available For Sale Securities [Line Items]
Financial assets	$ 73,538	$ 89,773
Financial liabilites	71,135
Money Market Funds
Schedule Of Available For Sale Securities [Line Items]
Financial assets	4,285	10,988
Certificates of Deposit
Schedule Of Available For Sale Securities [Line Items]
Financial assets	729	6,102
Repurchase Agreements
Schedule Of Available For Sale Securities [Line Items]
Financial assets		9,000
Corporate Notes
Schedule Of Available For Sale Securities [Line Items]
Financial assets		12,411
Government and Agency Notes
Schedule Of Available For Sale Securities [Line Items]
Financial assets	68,524	50,766
Municipal Notes
Schedule Of Available For Sale Securities [Line Items]
Financial assets		506
Accrued Earnout
Schedule Of Available For Sale Securities [Line Items]
Financial liabilites	57,706
Long-term debt
Schedule Of Available For Sale Securities [Line Items]
Financial liabilites	13,429
Level 1
Schedule Of Available For Sale Securities [Line Items]
Financial assets	8,256	10,988
Financial liabilites	0
Level 1 | Money Market Funds
Schedule Of Available For Sale Securities [Line Items]
Financial assets	4,285	10,988
Level 1 | Certificates of Deposit
Schedule Of Available For Sale Securities [Line Items]
Financial assets	0	0
Level 1 | Repurchase Agreements
Schedule Of Available For Sale Securities [Line Items]
Financial assets		0
Level 1 | Corporate Notes
Schedule Of Available For Sale Securities [Line Items]
Financial assets		0
Level 1 | Government and Agency Notes
Schedule Of Available For Sale Securities [Line Items]
Financial assets	3,971	0
Level 1 | Municipal Notes
Schedule Of Available For Sale Securities [Line Items]
Financial assets		0
Level 1 | Accrued Earnout
Schedule Of Available For Sale Securities [Line Items]
Financial liabilites	0
Level 2
Schedule Of Available For Sale Securities [Line Items]
Financial assets	65,282	78,785
Financial liabilites	0
Level 2 | Money Market Funds
Schedule Of Available For Sale Securities [Line Items]
Financial assets	0	0
Level 2 | Certificates of Deposit
Schedule Of Available For Sale Securities [Line Items]
Financial assets	729	6,102
Level 2 | Repurchase Agreements
Schedule Of Available For Sale Securities [Line Items]
Financial assets		9,000
Level 2 | Corporate Notes
Schedule Of Available For Sale Securities [Line Items]
Financial assets		12,411
Level 2 | Government and Agency Notes
Schedule Of Available For Sale Securities [Line Items]
Financial assets	64,553	50,766
Level 2 | Municipal Notes
Schedule Of Available For Sale Securities [Line Items]
Financial assets		506
Level 2 | Accrued Earnout
Schedule Of Available For Sale Securities [Line Items]
Financial liabilites	0
Level 3
Schedule Of Available For Sale Securities [Line Items]
Financial assets	0	0
Financial liabilites	71,135
Level 3 | Money Market Funds
Schedule Of Available For Sale Securities [Line Items]
Financial assets	0	0
Level 3 | Certificates of Deposit
Schedule Of Available For Sale Securities [Line Items]
Financial assets	0	0
Level 3 | Repurchase Agreements
Schedule Of Available For Sale Securities [Line Items]
Financial assets		0
Level 3 | Corporate Notes
Schedule Of Available For Sale Securities [Line Items]
Financial assets		0
Level 3 | Government and Agency Notes
Schedule Of Available For Sale Securities [Line Items]
Financial assets	0	0
Level 3 | Municipal Notes
Schedule Of Available For Sale Securities [Line Items]
Financial assets		$ 0
Level 3 | Accrued Earnout
Schedule Of Available For Sale Securities [Line Items]
Financial liabilites	57,706
Level 3 | Long-term debt
Schedule Of Available For Sale Securities [Line Items]
Financial liabilites	$ 13,429

XML

Fair Value Measurements - Schedule of Changes in Present Value of Acquisition Related Accrued Earnouts of Contingent Consideration Liability (Details) - Level 3 $ in Thousands	12 Months Ended
	Dec. 31, 2023 USD ($)
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning Balance as of January 1, 2023	$ 0
Acquisition date fair value of contingent consideration	56,128
Change in fair valuie of contingent consideration	1,578
Accrued earnout liability as of December 31, 2023	$ 57,706

XML

Fair Value Measurements - Summary of Quantitative Information About Level 3 Fair Value Measurements (Details) - Level 3 $ in Thousands	Dec. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)
Debt Securities, Available-for-Sale [Line Items]
Fair Value Measurements related to accrued earnout	$ 57,706	$ 0
Accrued Earnout
Debt Securities, Available-for-Sale [Line Items]
Fair Value Measurements related to accrued earnout	$ 57,706
Accrued Earnout | Maximum
Debt Securities, Available-for-Sale [Line Items]
Input Used	100
Accrued Earnout | Minimum
Debt Securities, Available-for-Sale [Line Items]
Input Used	0
EIB loan
Debt Securities, Available-for-Sale [Line Items]
Fair Value Measurements related to accrued earnout	$ 13,429
Input Used	13

XML

Fair Value Measurements - Fair value of the Level 3 EIB Debt (Details) - Level 3 $ in Thousands	12 Months Ended
	Dec. 31, 2023 USD ($)
Debt Securities, Available-for-Sale [Line Items]
Beginning Balance as of January 1, 2023	$ 0
Acquisition of EIB Debt	12,564
Change in fair value	338
Due to foreign currency translation	527
Ending Balance as of December 31, 2023	$ 13,429

XML

Cash, Cash Equivalents and Investments - Summary of Fair Values of Cash, Cash Equivalents, and Short-Term Investments Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total cash and cash equivalents	$ 20,752	$ 44,579
Short term investments	54,307	45,602
Long term investments	0	3,578
Fair Value on Recurring | Cash
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total cash and cash equivalents	1,521	3,986
Fair Value on Recurring | Money Market Funds
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total cash and cash equivalents	4,285	10,988
Fair Value on Recurring | Repurchase Agreements
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total cash and cash equivalents	0	9,000
Fair Value on Recurring | Certificates of Deposit
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Short term investments	729	5,390
Long term investments	0	712
Fair Value on Recurring | Municipal Notes
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Short term investments	0	506
Fair Value on Recurring | Corporate Notes
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Short term investments	0	12,411
Fair Value on Recurring | Government and Agency Notes
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total cash and cash equivalents	14,946	20,605
Short term investments	53,578	27,295
Long term investments	$ 0	$ 2,866

XML

Cash, Cash Equivalents and Investments - Additional Information (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Fair Value Disclosures [Abstract]
Weighted average remaining contractual maturities of available-for-sale securities	2 months
Realized gains or losses on the sale or maturity of available-for-sale securities	$ 0	$ 0
Amounts reclassify out of accumulated other comprehensive loss	0
Fair value assets level 1 to level 2	0	0
Fair value assets level 2 to level 1	$ 0	$ 0

XML

Cash, Cash Equivalents and Investments - Summary of Available-for-Sale Securities (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	$ 73,548	$ 90,330
Unrealized Gains	13	5
Unrealized Losses	(23)	(562)
Financial assets and liabilities	73,538	89,773
Cash equivalents (original maturities within 90 days)	19,231	40,593
Short-term investments (maturities within 1 year)	54,307	45,602
Long-term investments (maturities beyond 1 year)	0	3,578
Total cash equivalents and investments	73,538	89,773
Money Market Funds
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	4,285	10,988
Unrealized Gains	0	0
Unrealized Losses	0	0
Financial assets and liabilities	4,285	10,988
Certificates of Deposit
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	735	6,237
Unrealized Gains	0	1
Unrealized Losses	(6)	(136)
Financial assets and liabilities	729	6,102
Repurchase Agreements
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost		9,000
Unrealized Gains		0
Unrealized Losses		0
Financial assets and liabilities		9,000
Corporate Notes
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost		12,575
Unrealized Gains		0
Unrealized Losses		(164)
Financial assets and liabilities		12,411
Government and Agency Notes
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	68,528	51,020
Unrealized Gains	13	4
Unrealized Losses	(17)	(258)
Financial assets and liabilities	$ 68,524	50,766
Municipal Notes
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost		510
Unrealized Gains		0
Unrealized Losses		(4)
Financial assets and liabilities		$ 506

XML

Cash, Cash Equivalents and Investments - Summary of Unrealized Losses of Company's Investments in Debt Securities Measured at Fair Value (Details) $ in Thousands	Dec. 31, 2023 USD ($)
Debt Securities, Available-for-Sale, Unrealized Loss Position [Line Items]
Fair value, Less than twelve months	$ 3,966
Gross unrealized loss, Less than twelve months	0
Fair value,Twelve months or greater	3,704
Gross unrealized loss, Twelve months or greater	(23)
Debt Securities, Available-for-Sale, Unrealized Loss Position, Total	7,670
Gross unrealized loss, total	(23)
Certificates of Deposit [Member]
Debt Securities, Available-for-Sale, Unrealized Loss Position [Line Items]
Fair value, Less than twelve months	0
Gross unrealized loss, Less than twelve months	0
Fair value,Twelve months or greater	729
Gross unrealized loss, Twelve months or greater	(6)
Debt Securities, Available-for-Sale, Unrealized Loss Position, Total	729
Gross unrealized loss, total	(6)
US Government Corporations and Agencies Securities [Member]
Debt Securities, Available-for-Sale, Unrealized Loss Position [Line Items]
Fair value, Less than twelve months	3,966
Gross unrealized loss, Less than twelve months	0
Fair value,Twelve months or greater	2,975
Gross unrealized loss, Twelve months or greater	(17)
Debt Securities, Available-for-Sale, Unrealized Loss Position, Total	6,941
Gross unrealized loss, total	$ (17)

XML

Cash, Cash Equivalents and Investments - Schedule of the Ccontractual Maturities of our Investments in Debt Securities Measured at Fair Value (Details) $ in Thousands	Dec. 31, 2023 USD ($)
Fair Value Disclosures [Abstract]
Total	$ 54,307
Less Than 1 Year	54,307
1-5 Years	0
6-10 Years	0
More Than 10 Years	$ 0

XML

Balance Sheet Components - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Balance Sheet Components [Line Items]
Prepaid expenses	$ 365	$ 223
Prepaid insurance	809	977
Prepaid research and development expenses	133	1,088
Other current assets	81	276
Total prepaid expenses and other current assets	2,381	3,567
Australia
Balance Sheet Components [Line Items]
Australia research and development refundable tax credit	0	1,003
Italy
Balance Sheet Components [Line Items]
Australia research and development refundable tax credit	$ 993	$ 0

XML

Balance Sheet Components - Additional Information (Details) - USD ($) $ in Thousands		12 Months Ended
	Aug. 04, 2023	Dec. 31, 2023	Dec. 31, 2022	Mar. 31, 2023
Prepaid expenses and other current assets		$ 2,381	$ 3,567
Depreciation		300	200
Cash severance payments	$ 500	300
Severance costs recognized		100
Expenses related to employment obligation		100
Additional cash bonous severance percentage	100.00%
Share based compensation accelerated vesting percentage	50.00%
Total stock-based compensation	$ 100	5,220	16,618
Option [Member]
Accelerated vesting, number of options	612,141
Restricted Stock Awards
Accelerated vesting, number of options	54,757
Novosteo [Member]
Prepaid expenses and other current assets				$ 500
Australia research and development refundable tax credit				$ 500
Cortexyme Australia
Reductions in research and development expense		0	600
Prepaid expenses and other current assets		500
Australia research and development refundable tax credit		500
Ery Del [Member]
Reductions in research and development expense		$ 200	$ 0

XML

Balance Sheet Components - Schedule of Other Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Balance Sheet Components [Line Items]
VAT receivable	$ 3,463	$ 0
Total other assets	8,456	0
Italy
Balance Sheet Components [Line Items]
Long term Italian research and development refundable tax credit	$ 4,993	$ 0

XML

Balance Sheet Components - Schedule of Assets Held for Sale (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Restructuring Cost and Reserve [Line Items]
Assets Held for Sale	$ 10	$ 0
Novosteo [Member]
Restructuring Cost and Reserve [Line Items]
Assets Held for Sale	$ 10	$ 0

XML

Balance Sheet Components - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Property Plant And Equipment [Line Items]
Less: accumulated amortization and depreciation	$ (507)	$ (185)
Property and equipment, net	234	393
Computer Equipment
Property Plant And Equipment [Line Items]
Property and equipment	36	18
Computer Software
Property Plant And Equipment [Line Items]
Property and equipment	30	0
Lab Equipment
Property Plant And Equipment [Line Items]
Property and equipment	486	415
Finance Lease Right of Use Assets
Property Plant And Equipment [Line Items]
Property and equipment	0	124
Leasehold Improvement
Property Plant And Equipment [Line Items]
Property and equipment	36	21
Office Furniture
Property Plant And Equipment [Line Items]
Property and equipment	$ 153	$ 0

XML

Balance Sheet Components - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Accrued Liabilities, Current [Abstract]
Personnel expenses	$ 2,340	$ 1,130
Professional fees	211	234
Research and development expenses	564	497
Current portion of operating lease liabilities	64	377
Current portion of finance lease liability	0	76
Other	257	185
Total accrued expenses and other current liabilities	$ 3,436	$ 2,499

XML

Balance Sheet Components - Summary of Severance and Related Expenses (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Balance Sheet Components [Abstract]
Beginning accrued severance	$ 0	$ 0
Incurred during the period	770	3,942
Severance paid during the period	(429)	(3,942)
Ending accrued severance	$ 341	$ 0

XML

Leases - Additional Information (Details) - USD ($)			6 Months Ended	12 Months Ended
	Oct. 31, 2023	Oct. 31, 2022	Jun. 30, 2022	Dec. 31, 2023	Dec. 31, 2022	Oct. 20, 2023	Feb. 28, 2023
Lessee Lease Description [Line Items]
Operating lease liability				$ 385,000	$ 377,000
Operating lease asset				385,000	291,000
Future rent expense				$ 400,000
Finance lease amortized period on equipment service				18 months
Finance lease amortization of right of use assets				$ 6,000	50,000
Finance Lease, Liability, Total							$ 70,000
Finance Lease, Liability, Statement of Financial Position [Extensible Enumeration]							Accrued Liabilities, Current
Impairment charges				$ 100,000
EryDel
Lessee Lease Description [Line Items]
Operating lease liability						$ 31,000
Operating lease asset						31,000
EryDel | Other Operating Leases
Lessee Lease Description [Line Items]
Operating lease liability						200,000
Operating lease asset						200,000
Minimum
Lessee Lease Description [Line Items]
Operating lease remaining term on a straight-line basis				29 months
Maximum
Lessee Lease Description [Line Items]
Operating lease remaining term on a straight-line basis				73 months
South San Francisco
Lessee Lease Description [Line Items]
Operating lease payments	$ 22,000		$ 300,000
Operating lease liability			300,000
Operating lease asset			300,000
Security deposit paid			$ 17,000
West Lafayette
Lessee Lease Description [Line Items]
Lease agreement period		15 months
Operating lease payments		$ 200,000
Operating lease liability		$ 100,000
Loan proceeds used to offset rent expense, utility costs and mortgage interest expense				$ 57,000
Right-of-use assets obtained in exchange for new operating lease liabilities					$ 10,000
Impairment charges				66,000
West Lafayette | Accrued Expenses And Other Current Liabilities
Lessee Lease Description [Line Items]
Security deposit paid				$ 6,000
Bresso, Italy | EryDel
Lessee Lease Description [Line Items]
Operating lease liability						400,000
Operating lease asset						$ 400,000
Medolla, Italy | EryDel
Lessee Lease Description [Line Items]
Lease agreement period						12 years
Operating lease liability						$ 100,000
Operating lease asset						$ 100,000

XML

Leases - Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Leases [Abstract]
Operating lease right-of-use assets	$ 385	$ 291
Short-term operating lease liability	$ 64	$ 377
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	Accrued expenses and other current liabilities	Accrued expenses and other current liabilities
Long-term operating lease liabilities	$ 321	$ 0
Operating lease liability	385	377
Finance lease right of use asset	0	124
Finance lease accumulated amortization	0	(50)
Total finance lease right of use asset, net	$ 0	$ 74
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration]	Property, Plant and Equipment, Net	Property, Plant and Equipment, Net
Weighted average remaining lease term
Operating leases	5 years 4 months 24 days	10 months 24 days
Finance leases		1 year
Weighted average discount rate
Operating leases	7.95%	5.71%
Finance leases	0.00%	4.45%
2024	$ 91
2025	91
2026	88
2027	81
2028	69
Thereafter	48
Total lease payments	469
Less: imputed interest	(83)
Operating lease liability	$ 385	$ 377

XML

Leases - Summary of Lease Costs (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Lease costs:
Finance lease amortization of right of use assets	$ 6,000	$ 50,000
Operating lease costs	266,000	572,000
Short-term lease costs	96,000	75,000
Total lease costs	$ 368,000	$ 697,000

XML

Long-term Debt - Additional Information (Details) - 12 months ended Dec. 31, 2023 € in Millions, $ in Millions	EUR (€)	USD ($)	USD ($)
EIB loan
Debt Instrument [Line Items]
Fair value of the EIB Loan | $			$ 13.4
Debt, Fair value adjustment | $		$ 0.3
Ery Del [Member]
Debt Instrument [Line Items]
Acquisition date	Oct. 20, 2023	Oct. 20, 2023
Maximum borrowings	€ 30.0
Loan restated term	The EIB Loan was amended and restated as of the acquisition date. The EIB Loan provides for maximum borrowings of 30.0 million euro through four tranches; tranche A, 3.0 million euro; tranche B, 7.0 million euro; tranche C, 10.0 million euro; and tranche D, 10.0 million euro. Each tranche is subject to conditions precedent related to the Company’s business and capitalization.	The EIB Loan was amended and restated as of the acquisition date. The EIB Loan provides for maximum borrowings of 30.0 million euro through four tranches; tranche A, 3.0 million euro; tranche B, 7.0 million euro; tranche C, 10.0 million euro; and tranche D, 10.0 million euro. Each tranche is subject to conditions precedent related to the Company’s business and capitalization.
Repayment terms	The unused portions of each tranche may be canceled by the Company at any time, subject to a cancellation fee. As of December 31, 2023, only tranches A and B have been drawn. All amounts due under tranche A and B are payable on their maturity date of August 2026. Tranche C and D are payable in equal installments of principal together with all amounts outstanding under the tranches on the repayment dates specified in the relevant Disbursement Offer. The first Repayment Date of tranche C shall fall not earlier than twelve months from the Disbursement Date of such tranche. The last Repayment Date of tranche C and tranche D shall fall not later than 5 years from the Disbursement Date of tranche C and tranche D, respectively. The EIB Loan bears interest at fixed rates for each tranche and is payable on the maturity date for each Tranche. The fixed rates range from 7.0% to 9.0% per annum. As of December 31, 2023, principal of 10.0 million euros ($11.0 million) was outstanding on the EIB Loan and it is recorded as Long-term debt on the consolidated balance sheet at fair value with imputed interest of 9.0% included.	The unused portions of each tranche may be canceled by the Company at any time, subject to a cancellation fee. As of December 31, 2023, only tranches A and B have been drawn. All amounts due under tranche A and B are payable on their maturity date of August 2026. Tranche C and D are payable in equal installments of principal together with all amounts outstanding under the tranches on the repayment dates specified in the relevant Disbursement Offer. The first Repayment Date of tranche C shall fall not earlier than twelve months from the Disbursement Date of such tranche. The last Repayment Date of tranche C and tranche D shall fall not later than 5 years from the Disbursement Date of tranche C and tranche D, respectively. The EIB Loan bears interest at fixed rates for each tranche and is payable on the maturity date for each Tranche. The fixed rates range from 7.0% to 9.0% per annum. As of December 31, 2023, principal of 10.0 million euros ($11.0 million) was outstanding on the EIB Loan and it is recorded as Long-term debt on the consolidated balance sheet at fair value with imputed interest of 9.0% included.
Outstanding amount of line of credit	€ 10.0	$ 11.0
Imputed interest on borrowings	9.00%		9.00%
Remuneration payable period	7 years	7 years
Fair value of EIB Loan | $			$ 12.6
Foreign currency translation adjustment in fair value | $			$ 0.5
Ery Del [Member] | Minimum
Debt Instrument [Line Items]
Disbursement period	12 months	12 months
Fixed interest rate	7.00%		7.00%
Ery Del [Member] | Maximum
Debt Instrument [Line Items]
Disbursement period	5 years	5 years
Fixed interest rate	9.00%		9.00%
Ery Del [Member] | Equal to 2.5%
Debt Instrument [Line Items]
Provision for additional remuneration paid based on revenue percentage	2.50%	2.50%
Ery Del [Member] | Equal to 2.5% | Maximum
Debt Instrument [Line Items]
Revenues	€ 125.0
Ery Del [Member] | Plus 1.85%
Debt Instrument [Line Items]
Provision for additional remuneration paid based on revenue percentage	1.85%	1.85%
Ery Del [Member] | Plus 1.85% | Minimum
Debt Instrument [Line Items]
Revenues	€ 125.0
Ery Del [Member] | Plus 1.85% | Maximum
Debt Instrument [Line Items]
Revenues	€ 250.0
Ery Del [Member] | Plus 1.0%
Debt Instrument [Line Items]
Provision for additional remuneration paid based on revenue percentage	1.00%	1.00%
Ery Del [Member] | Plus 1.0% | Minimum
Debt Instrument [Line Items]
Revenues	€ 250.0
Ery Del [Member] | Tranche A
Debt Instrument [Line Items]
Maximum borrowings	€ 3.0
Drawn percentage	30.00%	30.00%
Ery Del [Member] | Tranche B
Debt Instrument [Line Items]
Maximum borrowings	€ 7.0
Ery Del [Member] | Tranche C
Debt Instrument [Line Items]
Maximum borrowings	10.0
Ery Del [Member] | Tranche D
Debt Instrument [Line Items]
Maximum borrowings	€ 10.0
Ery Del [Member] | Tranche A and B
Debt Instrument [Line Items]
Drawn percentage	50.00%	50.00%
Ery Del [Member] | Tranche A,B and C
Debt Instrument [Line Items]
Drawn percentage	80.00%	80.00%
Ery Del [Member] | Tranche A,B,Cand D
Debt Instrument [Line Items]
Drawn percentage	100.00%	100.00%

XML

Long-term Debt - Schedule of Future Minimum Principal Payments (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
2024	$ 0
2025	0
2026	11,053
2027 and thereafter	0
Total future minimum payments	11,053
Imputed interest	2,376
Total Debt as of December 31, 2023	$ 13,429	$ 0

XML

Equity Incentive Plans - Additional Information (Details) - USD ($)				12 Months Ended
	Aug. 04, 2023	May 19, 2022	May 09, 2022	Dec. 31, 2023	Dec. 31, 2022
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Award vesting rights	50.00%
Common stock reserved for issuance				14,324,720	12,745,170
Total intrinsic value of options exercised				$ 300,000	$ 1,400,000
Weighted average grant date fair value of options granted				$ 0.82	$ 6.05
Total estimated grant date fair value of options vested				$ 11,100,000	$ 31,800,000
Stock-based compensation expense related to options granted	$ 100,000			5,220,000	16,618,000
Income tax benefits recognized				0
Unamortized employee stock-based compensation				$ 4,000,000
Unamortized employee stock-based compensation expected to recognized over remaining estimated vesting period				2 years 6 months 18 days
Dividend yield				0.00%
One Year Anniversary [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Award vesting rights		25.00%		25.00%
Three Year Anniversary [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Award vesting rights		75.00%		75.00%
Novosteo [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total intrinsic value of options exercised				$ 427,000	$ 0
Weighted average grant date fair value of options granted				$ 0	$ 2.51
Total estimated grant date fair value of options vested				$ 300,000	$ 300,000
Unamortized employee stock-based compensation				$ 400,000
Unamortized employee stock-based compensation expected to recognized over remaining estimated vesting period				2 years 2 months 23 days
Number of shares, Cancelled and converted		0.0911
Warrants to purchase common stock, per share		$ 0.0911
Arithmetic Average
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected term				10 years
Restricted Stock Units
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock based awards vesting period				2 years
Total fair value of shares vested				$ 44,000	1,700,000
Aggregate intrinsic value				11,000	1,100,000
Stock-based compensation expense related to options granted				37,000	1,337,000
Unamortized employee stock-based compensation				$ 4,000
Unamortized employee stock-based compensation expected to recognized over remaining estimated vesting period				2 months 1 day
Number of Shares, Surrendered				19,188
Restricted Stock Units | Minimum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock based awards vesting period				2 years
Restricted Stock Units | Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock based awards vesting period				4 years
Restricted Stock Awards
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unamortized employee stock-based compensation				$ 600,000
Unamortized employee stock-based compensation expected to recognized over remaining estimated vesting period				1 year 8 months 26 days
Number of Shares, Surrendered				63,293
Restricted Stock Awards | Novosteo [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Common stock reserved for issuance		0.0911
Employees and Non-Employees
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense related to options granted				$ 2,600,000	11,400,000
Employees and Non-Employees | Novosteo [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense related to options granted				275,000	245,000
Employees and Non-Employees | Restricted Stock Awards
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense related to options granted				$ 496,000	338,000
2019 Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Maximum aggregate number of shares that may be issued under the plan				10,036,489
Increase in number of shares available for issuance as proportion of shares of common stock				2,146,354
Percentage of common stock outstanding				4.00%
Award grant period				10 years
Rate of purchase price of stock on fair value (as a percent)				100.00%
Voting rights in percentage				10
Stock based awards vesting period				4 years
2019 Plan | Novosteo [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Maximum aggregate number of shares that may be issued under the plan		544,985
2019 Plan | Minimum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Monthly installments over the remaining vesting period				3 years
2019 Plan | Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Rate of purchase price of stock on fair value (as a percent)				110.00%
Stock options granted maximum period				ten years
Monthly installments over the remaining vesting period				4 years
2019 ESPP
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Increase in number of shares available for issuance as proportion of shares of common stock				536,589
Percentage of common stock outstanding				1.00%
Common stock reserved for issuance				1,494,530
Maximum period for common stock shares reserved for future issuance				10 years
2022 Inducement Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Increase in number of shares available for issuance as proportion of shares of common stock			4,000,000
Award grant period			10 years
Rate of purchase price of stock on fair value (as a percent)			100.00%
Total intrinsic value of options exercised				$ 0	$ 0
Weighted average grant date fair value of options granted				$ 0	$ 2.26
Total estimated grant date fair value of options vested				$ 2,100,000	$ 0
Unamortized employee stock-based compensation				$ 3,200,000
Unamortized employee stock-based compensation expected to recognized over remaining estimated vesting period				2 years 4 months 20 days
2022 Inducement Plan | Employees and Non-Employees
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense related to options granted				$ 1,802,000	$ 1,293,000
2019 Novosteo Plan [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Award grant period		10 years
Rate of purchase price of stock on fair value (as a percent)		100.00%
Voting rights in percentage		10
Stock options granted maximum period		ten years
Stock based awards vesting period		4 years
2019 Novosteo Plan [Member] | Minimum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Monthly installments over the remaining vesting period		3 years
2019 Novosteo Plan [Member] | Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Rate of purchase price of stock on fair value (as a percent)		110.00%
Monthly installments over the remaining vesting period		4 years

XML

Equity Incentive Plans - Summary of Activity for Service-based Stock Options (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Aggregate Intrinsic Value	$ 300,000	$ 1,400,000
2022 Inducement Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Aggregate Intrinsic Value	0	0
Novosteo
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Aggregate Intrinsic Value	$ 427,000	$ 0
Service Based Stock Options | 2019 Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of Options and Unvested Shares, beginning balance	3,319,711	5,571,293
Number of Options and Unvested Shares, granted	3,346,958	2,051,058
Number of Options and Unvested Shares, exercised	(258,705)	(102,152)
Number of Options and Unvested Shares, Options cancelled / forfeited	(2,140,786)	(4,200,488)
Number of Options and Unvested Shares, ending balance	4,267,178	3,319,711	5,571,293
Number of Options and Unvested Shares, vested and expected to vest	4,267,178
Number of Options and Unvested Shares, exercisable	1,109,464
Weighted Average Exercise Price, beginning balance	$ 16.07	$ 28.7
Weighted Average Exercise Price, granted	1.03	8.13
Weighted Average Exercise Price, exercised	0.42	1.45
Weighted Average Exercise Price, cancelled/forfeited	16.52	29.3
Weighted Average Exercise Price, ending balance	5	$ 16.07	$ 28.7
Weighted Average Exercise Price, vested and expected to vest	5
Weighted Average Exercise Price, exercisable	$ 14.09
Weighted Average Remaining Contractual Life	8 years 10 months 6 days	4 years 9 months 7 days	8 years 3 months 3 days
Weighted Average Remaining Contractual Life, vested and expected to vest	8 years 10 months 6 days
Weighted Average Remaining Contractual Life, exercisable	7 years 3 months 25 days
Aggregate Intrinsic Value	$ 197,000	$ 65,000	$ 15,687,000
Aggregate Intrinsic Value, vested and expected to vest	197,000
Aggregate Intrinsic Value, exercisable	$ 34,000
Service Based Stock Options | 2022 Inducement Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of Options and Unvested Shares, beginning balance	3,742,255
Number of Options and Unvested Shares, granted		3,744,255
Number of Options and Unvested Shares, Options cancelled / forfeited	(1,408,949)	(2,000)
Number of Options and Unvested Shares, ending balance	2,333,306	3,742,255
Number of Options and Unvested Shares, vested and expected to vest	2,333,306
Number of Options and Unvested Shares, exercisable	923,599
Weighted Average Exercise Price, beginning balance	$ 2.98
Weighted Average Exercise Price, granted		$ 2.98
Weighted Average Exercise Price, cancelled/forfeited	2.98	2.98
Weighted Average Exercise Price, ending balance	2.98	$ 2.98
Weighted Average Exercise Price, vested and expected to vest	2.98
Weighted Average Exercise Price, exercisable	$ 2.98
Weighted Average Remaining Contractual Life	8 years 4 months 20 days	9 years 4 months 20 days
Weighted Average Remaining Contractual Life, vested and expected to vest	8 years 4 months 20 days
Weighted Average Remaining Contractual Life, exercisable	8 years 4 months 20 days
Service Based Stock Options | Novosteo
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of Options and Unvested Shares, beginning balance	503,105
Number of Options and Unvested Shares, assumed		507,648
Number of Options and Unvested Shares, exercised	(105,808)
Number of Options and Unvested Shares, Options cancelled / forfeited	(86,866)	(4,543)
Number of Options and Unvested Shares, ending balance	310,431	503,105
Number of Options and Unvested Shares, vested and expected to vest	310,431
Number of Options and Unvested Shares, exercisable	135,812
Weighted Average Exercise Price, beginning balance	$ 0.55
Weighted Average Exercise Price, assumed		$ 0.55
Weighted Average Exercise Price, exercised	0.55
Weighted Average Exercise Price, cancelled/forfeited	0.55	0.55
Weighted Average Exercise Price, ending balance	0.55	$ 0.55
Weighted Average Exercise Price, vested and expected to vest	0.55
Weighted Average Exercise Price, exercisable	$ 0.55
Weighted Average Remaining Contractual Life	8 years 2 months 23 days	9 years 2 months 23 days
Weighted Average Remaining Contractual Life, vested and expected to vest	8 years 2 months 23 days
Weighted Average Remaining Contractual Life, exercisable	8 years 2 months 23 days
Aggregate Intrinsic Value	$ 155,000	$ 44,000
Aggregate intrinsic value, exercised	40,000
Aggregate Intrinsic Value, vested and expected to vest	155,000
Aggregate Intrinsic Value, exercisable	$ 68,000

XML

Equity Incentive Plans - Summary of Restricted Stock Options (Details)	12 Months Ended
	Dec. 31, 2023 $ / shares shares
Restricted Stock Units
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Outstanding, Number of Shares, Unvested, Beginning Balance | shares	30,876
Number of Shares, vested | shares	(10,200)
Number of Shares, cancelled | shares	(19,188)
Outstanding, Number of Shares, Unvested, Ending Balance | shares	1,488
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value, Beginning Balance | $ / shares	$ 4.3
Weighted-Average Grant Date Fair Value, vested | $ / shares	4.3
Weighted-Average Grant Date Fair Value, cancelled | $ / shares	4.3
Outstanding, Weighted-Average Grant Date Fair Value, Unvested, Ending Balance | $ / shares	$ 4.3
Restricted Stock Awards
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Outstanding, Number of Shares, Unvested, Beginning Balance | shares	427,401
Number of Shares, vested | shares	(188,344)
Number of Shares, cancelled | shares	(63,293)
Outstanding, Number of Shares, Unvested, Ending Balance | shares	175,764
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value, Beginning Balance | $ / shares	$ 3.3
Weighted-Average Grant Date Fair Value, vested | $ / shares	3.3
Weighted-Average Grant Date Fair Value, cancelled | $ / shares	3.3
Outstanding, Weighted-Average Grant Date Fair Value, Unvested, Ending Balance | $ / shares	$ 9.9

XML

Equity Incentive Plans - Summary of Employee and Non-Employee Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands		12 Months Ended
	Aug. 04, 2023	Dec. 31, 2023	Dec. 31, 2022
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total stock-based compensation	$ 100	$ 5,220	$ 16,618
General and Administrative Expense
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total stock-based compensation		4,003	10,225
Research and Development Expense
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total stock-based compensation		$ 1,217	$ 6,393

XML

Equity Incentive Plans - Summary of Weighted Average Assumptions to Calculate the Fair Value of Stock-Based Compensation (Details)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected dividend yield	0.00%
Service Based Stock Options
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected volatility	106.36%	89.98%
Expected dividend yield	0.00%	0.00%
Expected term (in years)	6 years 2 months 19 days	6 years 2 months 23 days
Risk-free interest rate	4.01%	2.67%

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Common Stock - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands		12 Months Ended
	Dec. 23, 2021	Dec. 31, 2023	Dec. 31, 2022	Apr. 30, 2023
Subsidiary, Sale of Stock [Line Items]
Proceeds from issuance of common stock		$ 0	$ 608
Common stock, shares authorized		100,000,000	100,000,000
Common stock, par value		$ 0.001	$ 0.001
Common stock, shares		42,973,215	36,136,480
Common stock, shares outstanding		42,973,215	36,136,480
Common stock, voting rights		Each share of common stock is entitled to one vote
Rights Plan [Member]
Subsidiary, Sale of Stock [Line Items]
Rights outstanding, maturity date				Apr. 05, 2024
Open Market Sales Agreement | Jefferies
Subsidiary, Sale of Stock [Line Items]
Proceeds from issuance of common stock	$ 150,000	$ 0	$ 600
Issuance of stock (in shares)		0	51,769

XML

Common Stock - Schedule of Reserved Shares of Common Stock for Future Issuance (Details) - shares	Dec. 31, 2023	Dec. 31, 2022
Class Of Stock [Line Items]
Total	14,324,720	12,745,170
Options Issued and Outstanding Under The Quince 2019 Stock Plan
Class Of Stock [Line Items]
Total	4,267,178	3,319,711
Shares Available for Issuance Under Quince 2019 Stock Plan
Class Of Stock [Line Items]
Total	4,005,784	3,747,309
Shares Available for Issuance Under Employee Stock Purchase Plan
Class Of Stock [Line Items]
Total	1,494,530	1,133,165
Options Issued and Outstanding Under The Novosteo 2019 Plan
Class Of Stock [Line Items]
Total	310,431	503,105
Shares Available for Issuance Under Novosteo 2019 Plan
Class Of Stock [Line Items]
Total	246,797	41,880
Options Issued and Outstanding Under the 2022 Inducement Plan
Class Of Stock [Line Items]
Total	2,333,306	3,742,255
Shares Available for Issuance Under 2022 Inducement Plan
Class Of Stock [Line Items]
Total	1,666,694	257,745

XML

Related Party Transactions - Additional Information (Details) - Morphimmune Inc. [Member] $ in Thousands	12 Months Ended
	Dec. 31, 2023 USD ($)
Related Party Transaction [Line Items]
Operating lease payments	$ 57,000
Lab Equipment
Related Party Transaction [Line Items]
Proceeds from sale of property, plant, and equipment	$ 80,000

XML

Income Taxes - Schedule of Loss Before Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Income Tax Disclosure [Abstract]
United States	$ (27,375)	$ (48,191)
International	(4,207)	(3,753)
Total	$ (31,582)	$ (51,944)

XML

Income Taxes - Schedule of Components of Benefit for Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Current expense (benefit):
Federal	$ 0	$ 0
State	0	0
Foreign	61	0
Total current expense (benefit)	61	0
Deferred expense (benefit):
Federal	(248)	284
State	0	0
Foreign	(10)	0
Total deferred expense (benefit)	(258)	284
Total income tax expense (benefit)	$ (197)	$ 284

XML

Income Taxes - Schedule of Provision for Income Taxes Differs From the Amount Expected by Applying the Federal Statutory Rate to Loss Before Taxes (Details)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Income Tax Disclosure [Abstract]
Federal statutory income tax rate	21.00%	21.00%
State income taxes	4.47%	0.89%
Income tax credits	1.07%	1.49%
Stock based compensation	(26.35%)	(0.82%)
Non-deductible expenses and others	(1.25%)	(3.38%)
Change in valuation allowance	1.68%	(18.63%)
Effective income tax rate	0.62%	0.55%

XML

Income Taxes - Schedule of Components of Deferred Tax Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Deferred tax asset:
Federal and State net operating loss carryforwards	$ 81,881	$ 49,481
Stock based compensation	2,401	9,667
Other accruals	527	515
Capitalized research and development expense	3,220	3,094
Tax credits	8,343	7,970
Disallowed interest expense carryforward	1,043	0
Gross deferred tax asset	97,415	70,727
Valuation allowance	(85,111)	(69,692)
Total deferred tax assets	12,304	1,035
Deferred tax liabilities:
Property and equipment	0	(11)
Capitalized leases	0	(32)
IP R&D	(17,608)	(1,239)
Gross deferred tax liabilities	(17,608)	(1,282)
Net deferred tax liabilities	$ (5,304)	$ (247)

XML

Income Taxes - Additional Information (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Income Taxes [Line Items]
Valuation allowances increased	$ 15.4	$ 11.1
Unrecognized tax benefits that would impact the effective tax rate	0.5
Interest or penalties accrued	$ 0.1	$ 0.0
Earliest Tax Year | California State Tax Examinations
Income Taxes [Line Items]
Open tax year	2013
Latest Tax Year | California State Tax Examinations
Income Taxes [Line Items]
Open tax year	2023
U.S. Federal
Income Taxes [Line Items]
Operating loss carryforwards	$ 238.4
Operating loss carryforwards, not subject to expiration	222.6
Operating loss carryforwards, subject to expiration	$ 15.8
Operating loss carryforwards begin to expire	2034
Tax credit carryforwards	$ 9.8
Tax credits carryforwards begin to expire	2036
U.S. Federal | Earliest Tax Year
Income Taxes [Line Items]
Open tax year	2013
U.S. Federal | Latest Tax Year
Income Taxes [Line Items]
Open tax year	2023
State
Income Taxes [Line Items]
Operating loss carryforwards	$ 34.2
Operating loss carryforwards begin to expire	2034
Tax credit carryforwards	$ 2.9
Foreign Tax Authority
Income Taxes [Line Items]
Operating loss carryforwards	$ 121.1
Internal Revenue Code
Income Taxes [Line Items]
Period of cumulative change in ownership	3 years
Minimum | Internal Revenue Code
Income Taxes [Line Items]
Cumulative change in ownership percentage	50.00%

XML

Income Taxes - Schedule of Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Income Tax Disclosure [Abstract]
Beginning balance	$ 3,688	$ 3,249
Additions for tax positions taken in a prior year	200	0
Additions for tax positions taken in a current year	451	439
Ending balance	$ 4,339	$ 3,688

XML

Net Loss Per Share - Schedule of Computation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Numerator:
Net loss	$ (31,385)	$ (51,660)
Denominator
Weighted average shares of common stock outstanding - basic	37,237,149	33,496,534
Weighted average shares of common stock outstanding - diluted	37,237,149	33,496,534
Net loss per share - basic	$ (0.84)	$ (1.54)
Net loss per share - diluted	$ (0.84)	$ (1.54)

XML

Net Loss Per Share - Schedule of Outstanding Potentially Dilutive Shares Excluded from Calculation of Diluted Net Loss Per Share (Details) - shares	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from calculation of earnings per share, amount	7,088,167	8,023,348
Stock Options Issued and Outstanding
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from calculation of earnings per share, amount	6,910,915	7,565,071
Restricted Stock Units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from calculation of earnings per share, amount	1,488	30,876
Restricted Stock Awards
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from calculation of earnings per share, amount	175,764	427,401

XML

Employee Benefit Plan - Additional Information (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Retirement Benefits [Abstract]
Percentage of employee contribution of their annual compensation	100.00%
Contributions	$ 100	$ 200
Defined contribution plan name	401(k)
Defined Contribution Plan, Plan Name [Extensible List]	us-gaap:QualifiedPlanMember

XML

Business Combination - Additional Information (Details)			2 Months Ended	12 Months Ended
	Oct. 20, 2023 USD ($) $ / shares shares	May 19, 2022 USD ($) $ / shares shares	Dec. 31, 2023 USD ($) $ / shares shares	Dec. 31, 2023 USD ($) $ / shares shares	Dec. 31, 2022 USD ($) $ / shares shares
Business Acquisition [Line Items]
Deferred tax liability		$ 532,000
Common stock, par value | $ / shares			$ 0.001	$ 0.001	$ 0.001
NDA Acceptance Under Contigent Consideration	$ 25,000,000
Business Combination Discount Rate	15.00%
Revenue					$ 262,000
Net loss					(52,592,000)
Acquisition related costs				$ 2,500,000	$ 2,200,000
Common stock, shares | shares			42,973,215	42,973,215	36,136,480
Measurement period adjustments				$ 0	$ 0
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill, Total		$ 5,900,000
Specified Approval Milestones [Member]
Business Acquisition [Line Items]
Milestone Payment	$ 60,000,000
Novosteo [Member]
Business Acquisition [Line Items]
Number of shares, Cancelled and converted | shares		0.0911
Common stock, par value | $ / shares		$ 0.001
Aggregate purchase of common stock shares | shares		507,108
Unvested restricted shares | shares		519,216
Business acquisition, transaction costs		$ 1,100,000
Revenue					0
Net loss					9,400,000
Payment to acquire business		$ 16,502,587,000
Shares issued for acquisition | shares		5,000,784
Share Price | $ / shares		$ 3.3
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill, Total			$ 5,900,000	5,900,000
Ery Del [Member]
Business Acquisition [Line Items]
Deferred tax liability	5,098,000
Uncertain tax position liability	500,000
Fair value of total consideration transferred	66,907,000
Maximum amount of future consideration payment	485,000,000
Amount payable upon achievement of specified milestone.	5,000,000
Milestone achievement related to market and sales	395,000,000
Notes Receivable on the date of acquisition	1,000,000
Payments made for acquisition of Promissory Notes Agreement	1,000,000
Interest receivable	1,300,000
Business acquisition, transaction costs	2,500,000
Revenue			0	0	0
Net loss			3,700,000	(40,265,000)	$ (67,580,000)
Payment to acquire business	$ 56,128,000
Shares issued for acquisition | shares	7,250,352
Share Price | $ / shares	$ 0.989
Common stock, shares | shares	6,525,315
Common Stock withheld | shares	725,037
Dicounted earning after tax	16.60%
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill, Total	$ 61,096,000		$ 60,636,000	$ 60,636,000
Royalty rate utilizing under income approach	0.30%
Discounted value to present value of intangible assets	16.60%
Acquired Finite-Lived Intangible Assets, Weighted Average Useful Life	21 years
Ery Del [Member] | Probability Of Achievement [Member] | Maximum | Contingent Consideration [Member]
Business Acquisition [Line Items]
Input Used			100	100
Ery Del [Member] | Probability Of Achievement [Member] | Minimum | Contingent Consideration [Member]
Business Acquisition [Line Items]
Input Used			0	0
Ery Del [Member] | In Process Research and Development [Member]
Business Acquisition [Line Items]
Fair value of identifiable intangible assets	$ 60,600,000
Ery Del [Member] | Trade Names [Member]
Business Acquisition [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill, Total	500,000
Ery Del [Member] | General and Administrative Expense [Member]
Business Acquisition [Line Items]
Business acquisition, transaction costs	2,300,000
Ery Del [Member] | Research and Development Expense [Member]
Business Acquisition [Line Items]
Business acquisition, transaction costs	$ 200,000

XML

Business Combination - Summary of Total Purchase Consideration Transferred (Details) - Ery Del [Member] $ in Thousands	Oct. 20, 2023 USD ($)
Business Acquisition [Line Items]
Cash	$ 2,615
Quince Therapeutics common stock (7,250,352 shares)	7,164
Contigent consideration	56,128
Settlement of preexisting notes receivable	1,000
Fair value of total consideration transferred	$ 66,907

XML

Business Combination - Summary of Total Purchase Consideration Transferred (Parenthetical) (Details)	Oct. 20, 2023 shares
Ery Del [Member]
Business Acquisition [Line Items]
Quince Therapeutics common stock, Shares	7,250,352

XML

Business Combination - Schedule of Fair Values of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Oct. 20, 2023	Dec. 31, 2022	May 19, 2022	Dec. 31, 2021
Business Acquisition [Line Items]
Cash and cash equivalents				$ 10,593
Property and equipment				279
ROU asset				124
In-process research and development				5,900
Goodwill	$ 17,625		$ 0	825	$ 0
Prepaid expenses and other current assets				1,040
Accounts payable and accrued liabilities				(1,726)
Deferred tax liabilities				(532)
Net assets acquired				$ 15,678
Ery Del [Member]
Business Acquisition [Line Items]
Cash and cash equivalents		$ 560
Tax assets		10,187
Other current assets		644
Property and equipment		238
ROU asset		383
Other non-current assets		14
In-process research and development	$ 60,636	61,096
Goodwill		16,929
Total assets acquired		90,051
Trade payables		(1,685)
Accrued expenses and other current liabilities		(2,943)
Debt, non-current		(12,564)
Other non-current liabilities		(854)
Deferred tax liabilities		(5,098)
Total liabilities assumed		(23,144)
Net assets acquired		$ 66,907

XML

Business Combination - Schedule of Revenue and Net Loss of the Combined Entity (Details) - USD ($)	2 Months Ended	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2023	Dec. 31, 2022
Business Acquisition [Line Items]
Revenue			$ 262,000
Net loss			(52,592,000)
Ery Del [Member]
Business Acquisition [Line Items]
Revenue	$ 0	$ 0	0
Net loss	$ 3,700,000	$ (40,265,000)	$ (67,580,000)

XML

Intangible Assets - Schedule of Carrying Amount of Indefinite Lived Intangible Asset (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Oct. 20, 2023	May 19, 2022
Indefinite-Lived Intangible Assets [Line Items]
In-process research and development				$ 5,900
Impairment charge	$ (5,900)	$ 0
Ery Del [Member]
Indefinite-Lived Intangible Assets [Line Items]
In-process research and development	60,636		$ 61,096
Impairment charge	0
Foreign curency translation adjustments	2,561
Indefinite-Lived Intangible Assets (Excluding Goodwill), Total	63,197
Novosteo [Member]
Indefinite-Lived Intangible Assets [Line Items]
In-process research and development	5,900
Impairment charge	(5,900)
Indefinite-Lived Intangible Assets (Excluding Goodwill), Total	$ 0

XML

Intangible Assets - Schedule of Carrying Amount of Finite Lived Intangible Asset (Details) - Ery Del [Member] $ in Thousands	12 Months Ended
	Dec. 31, 2023 USD ($)
Finite-Lived Intangible Assets [Line Items]
Impairment charge	$ 0
Intangible asset amortization	(4)
Foreign curency translation adjustments	19
Finite-Lived Intangible Assets, Net, Total	475
Trade Name [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets	$ 460
Useful life	21 years

XML

Intangible Assets - Additional Information (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	May 19, 2022	Dec. 31, 2021
Finite-Lived Intangible Assets [Line Items]
Intangible asset impairment charge	$ 5,900,000	$ 0
Goodwill	17,625,000	0	$ 825,000	$ 0
Non-cash goodwill impairment charge	0	825,000
Novosteo [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible asset impairment charge	$ 5,900,000
Goodwill		0
Non-cash goodwill impairment charge		$ 800,000

XML

Intangible Assets - Schedule carrying amount of goodwill (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill, Beginning Balance	$ 0	$ 0
Additions	16,929	825
Impairment charge		(825)
Foreign curency translation adjustments	696
Goodwill, Ending Balance	$ 17,625	$ 0