Risk Factors Update Summary

• Increased focus on Data Privacy and Data Protection laws in mainland China, with significant costs involved.
• Failure to comply with obligations under intellectual property-related agreements may result in loss of exclusive rights and termination of product development and commercialization rights.
• Increased need for clinical study and commercial manufacturing capacity due to product pipeline growth.
• Certain investments may be subject to CFIUS review, potentially delaying or blocking transactions.
• Risks related to patent linkage litigation and potential impact on business prospects.
• Focus on enhancing product pipeline through acquisitions and in-licenses, emphasizing competition risks.
• Added liability risk for damages resulting from hazardous materials use, potentially exceeding resources.
• Raised approximately $164.6 million in private equity financing and $2,462.7 million in net proceeds from offerings.
• Efforts to remediate GMP deficiencies to satisfaction of regulators can be laborious, time-consuming, and costly.
• Regulatory authorities may require additional clinical trials or impose unexpected conditions, potentially delaying approval.
• Increased credit exposure and uncertainties in intellectual property laws may impact business operations.
• The company may further experience growth in the number of employees and product development. This may expose the company to significant additional costs.
• The company may engage in future partnerships, in-licensing arrangements, joint ventures, or other business acquisitions that could disrupt operations and harm financial condition.
• Net loss increased from $334.6 million in 2021 to $443.3 million in 2022.
• Cash and cash equivalents decreased from $1,008.5 million to $790.2 million from 2022 to 2023.
• Limited experience manufacturing pharmaceutical products may hinder scaling production efficiently.
• Failure to comply with anti-corruption laws in China and the US could result in penalties and harm reputation.
• Chinese government policies have significantly affected industries like education and internet, impacting operations.
• Addition of China Patent Law amendments allowing patent term extension and adjustments.
• Increased risk of substantial costs due to unanticipated changes in environmental regulations.
• Debt arrangements with Chinese financial institutions allow borrowing up to $164.5 million.
• Addition of specific Chinese laws and regulations impacting competition, product liability, and intellectual property rights.
• Intellectual property agreements expanded to include "agreements" with employees and contractors.
• Received government grants and subsidies of $2.4 million in 2023 and $11.5 million in 2022.
• Licensing or collaboration arrangements for product candidates may expose the company to significant additional costs, divert management attention, and pose risks in international markets.
• Reliance on third-party manufacturers for product supply may adversely affect business if there are delays or failures in manufacturing or supply.
• Changes in regulations could affect approval and commercialization, leading to substantial costs and penalties.
• Net revenue increased from $144.3 million in 2021 to $215.0 million in 2022.
• Short-term investments decreased from $445.0 million to $16.3 million from 2022 to 2023.
• Reliance on third parties for pre-clinical and clinical trials, impacting study quality and timelines.
• The company may explore additional global or regional licensing agreements outside Greater China, potentially diverting management attention and resources.
• Detailed disclosure on labor protection laws in mainland China and the requirements for employers.
• Changes in regulations may delay or prevent acquisitions in China, affecting business expansion.
• Stricter regulations in China could lead to increased compliance costs and impact operations significantly.
• New regulations may limit or hinder the ability to offer securities, potentially causing significant decline.
• Competition poses a significant threat, especially from companies with greater resources and expertise.
• Net cash used in operating activities decreased from $549.2 million in 2021 to $367.6 million in 2022.
• Risks related to patent term extension due to failure to meet requirements or apply within deadlines.
• Business model shift from internal development to acquiring or in-licensing product candidates.
• Cybersecurity threats pose a significant risk, with potential disruptions, reputational damage, and financial losses if systems are breached.
• Potential need for substantial capital expenditures to comply with new environmental protection laws.
• Side effects associated with products could lead to trial suspension, termination, and regulatory scrutiny.
• Enhanced risk disclosure on regulations relating to foreign exchange, securities offering, and listing outside of China.
• Potential patent term extension up to five years under the Drug Price Competition and Patent Term Act.
• Failure to comply with data protection laws in China could result in penalties and impact operations.
• Dependence on third-party distributors for sales, with major customers accounting for a significant revenue portion.
• Failure to address risks and difficulties in expanding commercial activities may impact business success.
• Detailed information on the risk management framework, investment risk management, and foreign exchange restrictions.
• Disclosure of capital contributions to Chinese subsidiaries, emphasizing the regulatory requirements and restrictions on dividends.
• Uncertainties in the interpretation and implementation of laws and regulations in mainland China could affect development and commercialization.
• Addition of information on human capital resources, workforce composition, and commitment to diversity and inclusion.
• Loss of key personnel without key person insurance could impede research, development, and commercialization objectives.