Risk Factors Update Summary

• Addition of zelnecirnon clinical hold details by FDA on Phase 2b trial in AD and asthma.
• Intellectual Property: The company increased its patent portfolio from seven to ten families, including patents for tivumecirnon and zelnecirnon.
• FDA placed a clinical hold on Phase 2b trial due to liver failure, impacting zelnecirnon trials.
• Potential future drug candidates renamed to tivumecirnon, impacting ongoing and future trials.
• Inclusion of potential expenses due to efforts to lift clinical hold and advance zelnecirnon.
• Clinical Trials: The FDA placed a clinical hold on Phase 2b trials for zelnecirnon and FLX475 due to liver failure in one patient.
• Legislative changes may impact tax attributes, with NOLs carryforward period extended to 2032.
• Financials: Net loss increased from $69.8 million in 2022 to $83.2 million in 2023.
• Mention of the clinical hold being based on a serious adverse event of liver failure in one patient.
• Clinical Development: The company may discontinue development in certain indications and faces delays due to unexpected world events.
• Disclosure of the halt in dosing and enrollment in zelnecirnon trials due to the clinical hold.
• Increased governmental scrutiny on drug pricing may affect future pricing strategies and revenue.
• Regulatory Compliance: Increasingly stringent regulations like GDPR and CCPA may impact data processing and compliance obligations.
• Introduction of the need for substantial additional funds for current and future drug candidates.
• New laws and initiatives may lead to lower drug prices, impacting revenue and profitability.
• Inclusion of the potential impact of failure to comply with data privacy and security laws.
• Data privacy laws evolving globally may increase compliance costs and impact data processing activities.
• Expansion of zelnecirnon development into asthma and other inflammatory diseases beyond AD.
• Security incidents may result in unauthorized access to sensitive data, leading to disruptions.