As filed with the Securities and Exchange Commission on July 2, 2026

Registration No. 333-295249

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

AMENDMENT NO. 4 TO

FORM S-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

GAZELLE PARENT, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware		2834		42-1977778
(State or other jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification Number)

Gazelle Parent, Inc.

101 Lindenwood Drive, Suite 225

Malvern, Pennsylvania 19355

(610) 725-1500

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)

 

 

J. Mel Sorensen, M.D.

President

Gazelle Parent, Inc.

101 Lindenwood Drive, Suite 225

Malvern, Pennsylvania 19355

(610) 725-1500

(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service)

 

 

With copies to:

 

Madan Jagasia, M.D., M.S. Chief Executive Officer Obsidian Therapeutics, Inc. 1030 Massachusetts Avenue Cambridge, MA 02138 (781) 806-6245		William D. Collins, Esq. Gabriela Morales-Rivera, Esq. Tevia K. Pollard, Esq. Pia Kaur, Esq. Goodwin Procter LLP 100 Northern Avenue Boston, MA 02210 (617) 570-1000		J. Mel Sorensen, M.D. President and Chief Executive Officer Galera Therapeutics, Inc. 101 Lindenwood Drive, Suite 225 Malvern, PA 19355 (610) 725-1500		Asher Rubin, Esq. Istvan A. Hajdu, Esq. Kayla West, Esq. Sidley Austin LLP 787 7th Avenue New York, NY 10019 (212) 839-5300

 

 

Approximate date of commencement of the proposed sale of the securities to the public: As soon as practicable after this Registration Statement becomes effective and upon completion of the transactions described therein.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, as amended, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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 7(a)(2)(B) of the Securities Act. ☐

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross Border Issuer Tender Offer) ☐

Exchange Act Rule 14d-1(d) (Cross Border Third Party Tender Offer) ☐

 

 

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

 

 

connection with any interim permitted financings, but excluding dissenting shares and certain excluded shares as described in the accompanying information statement/prospectus) will be converted into the right to receive a number of shares of Parent’s common stock, par value $0.001 per share (“Parent common stock”), calculated as described in the accompanying information statement/prospectus (the “Obsidian merger consideration”). Immediately following the effective time of the Obsidian merger, at the effective time of the Galera merger, each outstanding share of Galera common stock (including those resulting from the conversion of the Galera preferred stock and the Galera pre-funded warrants, but excluding dissenting shares and certain excluded shares as described in the accompanying information statement/prospectus) will be converted into the right to receive a number of shares of Parent common stock calculated as described in the accompanying information statement/prospectus (the “Galera merger consideration” and, together with the Obsidian merger consideration, the “merger consideration”).

The percentage of the combined company that pre-closing Galera security holders will own as of the closing of the mergers is subject to adjustment based on the valuation of Galera immediately prior to the closing (as described in more detail in the section titled “The Merger Agreement—Merger Consideration” beginning on page 150 of the accompanying information statement/prospectus). The valuation of Galera is subject to a dollar-for-dollar adjustment if Final Galera net cash (as defined in the merger agreement) is above or below the Galera target net cash of $1.8 million, provided that any Permitted Galera Bridge Financing will not cause the Final Galera net cash (as defined in the merger agreement) to exceed $1.8 million.

For every $200,000 decrease in the Final Galera net cash (as defined in the merger agreement) below $(2.00) million, pre-closing Galera security holders (other than those investors participating in the concurrent financing) would own approximately 2.5 basis points (or two and one half hundredths of a percentage point) less, and pre-closing Obsidian security holders and investors in the concurrent financing, collectively, would own approximately 2.5 basis points (or two and one half hundredths of a percentage point) more, of the outstanding shares of Parent common stock at closing. Final Galera net cash as defined in the merger agreement can be, and likely will be, a negative number and the amount of the adjustment described above is not capped. As an illustration, if the Final Galera net cash is ($2.00) million, the valuation of Galera would be $10.00 million, and (assuming gross proceeds of $350.0 million from the concurrent financing), the pre-closing Galera security holders (other than the investors participating in the concurrent financing) would own approximately 1.29% of the combined company, the pre-closing Obsidian security holders would own approximately 53.46% of the combined company, and investors in the concurrent financing would own approximately 45.25% of the combined company in each case on a fully-diluted basis, using the treasury stock method.

As of June 22, 2026, the exchange ratio of shares of Galera common stock for Parent common stock (the “Galera exchange ratio”) is estimated to be approximately 0.7515 (after giving effect to the Galera Reverse Stock Split (as defined below) and assuming a Galera Reverse Stock Split ratio of 1:200). This estimate is subject to adjustment prior to closing for the number of outstanding shares of Parent common stock and Galera common stock, in each case as of immediately prior to the effective time, and the Final Galera net cash (and as a result, Galera stockholders could own more or less of the combined company than may be implied by the assumed Galera exchange ratio). The assumed Galera exchange ratio is based on (a) a valuation of Galera at $10.00 million, subject to adjustment if the Final Galera net cash exceeds or falls below $(2.00) million (with any such difference resulting in a dollar-for-dollar adjustment to Galera’s valuation), and (b) the assumed Galera Reverse Stock Split ratio noted above, although Galera’s board of directors may instead effect the Galera Reverse Stock Split at another ratio within the approved range of 1:75 to 1:200, which would result in a corresponding adjustment to the Galera exchange ratio.

As of June 22, 2026, the exchange ratio of shares of Obsidian common stock for Parent common stock (the “Obsidian exchange ratio”) is estimated to be approximately 0.1375 (after giving effect to the Galera Reverse Stock Split and assuming a Galera Reverse Stock Split ratio of 1:200). This estimate is subject to adjustment prior to closing for the number of outstanding shares of Galera common stock and Obsidian common stock, in each case as of immediately prior to the effective time. The assumed Obsidian exchange ratio is based on a valuation of Obsidian at $413.5 million.

The estimated aggregate number of shares of Parent common stock that Parent expects to issue to Galera’s securityholders at the closing of the Galera merger is 781,649 shares, reflecting an expected per share value of $12.00, assuming the Galera merger occurred as of June 22, 2026 (after giving effect to the Galera preferred stock conversion, the assumed Galera Reverse Stock Split ratio and the assumed Galera exchange ratio). The estimated aggregate number of shares of Parent common stock that Parent expects to issue to Obsidian’s securityholders at the closing of the Obsidian merger is 31,647,468 shares, reflecting an expected per share value of $12.00, assuming the Obsidian merger occurred as of June 22, 2026, the assumed Galera Reverse Stock Split ratio and the assumed Obsidian exchange ratio.

Furthermore, each holder of Galera common stock of record as of immediately prior to the consummation of the concurrent financing will be entitled to (i) one contingent value right (“CVR”) for each share of Galera common stock held by such holder, representing the right to receive a pro rata portion of 80% of any potential future net proceeds received by Parent or its affiliates from the development, commercialization, licensing, sale or other disposition of tilarginine, Galera’s legacy product candidate, or related intellectual property during the five years following the closing of the mergers and (ii) one CVR for each share of Galera common stock held by such holder, representing the right to receive a pro rata portion of 95% of any potential future net proceeds received by Parent or its affiliates from the Supportive-Care Product Divestiture (as defined in the accompanying information statement/prospectus) during the ten years following the closing of the mergers.

This registration statement covers 36,878,144 shares of Parent common stock, which is the estimated maximum number of shares expected to be issued to Galera’s securityholders at the closing of the Galera merger (not including the shares issued in the concurrent financing) and to Obsidian’s securityholders at the closing of the Obsidian merger, in each case subject to the adjustments described in this information statement/prospectus. This maximum number of shares includes (i) up to 5,355,802 additional shares of Parent common stock reserved for issuance pursuant to outstanding Galera and Obsidian equity awards and (ii) 49,975 additional shares of Parent common stock issuable upon exercise of the Galera Exchangeable Warrants (as defined below), which will be assumed by Parent in connection with the mergers.

Completion of the mergers is subject to, among other conditions, the Parent common stock being approved for listing on Nasdaq, subject to official notice of issuance. Although it is expected that Parent common stock will be traded on The Nasdaq Stock Market (“Nasdaq”) following the completion of the mergers under the ticker symbol “OBX,” it currently does not trade on any exchange and there has never been a public market for Parent common stock. There can be no assurance such listing condition will be met or that Parent will obtain such approval from Nasdaq. If such listing condition is not met or if such approval is not obtained, the mergers will not be consummated unless the condition is waived in writing by each of the parties at or prior to closing. As a result of the mergers, Galera common stock will no longer trade on the Over-The-Counter Quote Bulletin Board - Venture Market.

Upon closing of the mergers, Parent will be renamed “Obsidian Therapeutics, Inc.”

Under the terms of the Delaware General Corporation Law and the certificate of incorporation of Galera, stockholders of Galera holding a majority of the outstanding shares of Galera common stock have acted by written consent to adopt the merger agreement and each of the transactions contemplated thereby. The foregoing written consent was delivered on [ ], 2026. Accordingly, the adoption of the merger agreement by any other stockholder of Galera is not required and Galera is not requesting a vote on this matter, and unless a stockholder who did not execute the written consent dissents and seeks appraisal, they will only be entitled to receive their pro rata share of the Galera merger consideration upon consummation of the Galera merger. Accordingly, no meeting of the stockholders of Galera is required to consider and vote on, among other things, a proposal to adopt the merger agreement. This notice and the accompanying information statement will constitute notice to you from Galera of the written consent contemplated by Section 228(e) of the DGCL.

 

 

The accompanying information statement/prospectus contains information about Galera, Obsidian, the mergers, the concurrent financing, the documents related to the mergers and the concurrent financing, and other related matters. Please carefully read the entire information statement/prospectus, including the section titled “Risk Factors,” beginning on page 25 of the accompanying information statement/prospectus, for a discussion of the risks relating to the proposed mergers. You also can obtain information about the proposed mergers and the concurrent financing, and Galera, from documents that Galera has filed with the U.S. Securities and Exchange Commission (the “SEC”).

Sincerely,

J. Mel Sorensen, M.D.

President and Chief Executive Officer

Galera Therapeutics, Inc.

Neither the SEC nor any state securities commission has approved or disapproved of the mergers or the securities to be issued in the mergers or determined that the disclosure in the accompanying information statement/prospectus is accurate or adequate. Any representation to the contrary is a criminal offense.

 

 

The accompanying information statement/prospectus is dated [     ], 2026 and is first being mailed to Galera stockholders on or about [     ], 2026.

ABOUT THIS INFORMATION STATEMENT/PROSPECTUS

This document, which forms part of a registration statement on Form S-4 filed with the U.S. Securities and Exchange Commission (the “SEC”) by Parent (File No. 333-295249) constitutes a prospectus of Parent under Section 5 of the Securities Act of 1933, as amended (the “Securities Act”), with respect to the shares of Parent common stock to be issued (or reserved for issuance) to the securityholders of Galera and Obsidian pursuant to the merger agreement. This document also constitutes an information statement of Galera under Section 14(c) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and serves as notice to Galera stockholders pursuant to Section 228(e) of the DGCL of the adoption of the merger agreement by less than unanimous consent of stockholders. Parent (with Galera and Obsidian as its subsidiaries), following the mergers, is referred to in this information statement/prospectus as the combined company.

As used in this information statement/prospectus, except where otherwise stated or indicated by the context, all references to Galera are to Galera Therapeutics, Inc. and its consolidated subsidiaries and all references to Obsidian are to Obsidian Therapeutics, Inc. and its consolidated subsidiaries, in each case, prior to the consummation of the mergers.

You should rely only on the information contained in this information statement/prospectus. No one has been authorized to provide you with information that is different from that contained in this information statement/prospectus, or incorporated by reference into, this information statement/prospectus, and, if given or made by any person, such information must not be relied upon as having been authorized. This information statement/prospectus is dated [     ], 2026. You should not assume that the information contained in this information statement/prospectus is accurate as of any date other than that date. Neither our mailing of this information statement/prospectus to Galera stockholders, nor the issuance by Parent of Parent common stock in connection with the mergers, will create any implication to the contrary.

This information statement/prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, any securities in any jurisdiction to or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction. Information contained in this information statement/prospectus regarding Galera, Merger Sub 1 and Merger Sub 2 has been provided by Galera and information contained in this information statement/prospectus regarding Obsidian and Parent has been provided by Obsidian. See the section entitled “Where You Can Find More Information” beginning on page 356 of this information statement/prospectus.

On May 8, 2026, Galera stockholders approved proposals to amend the Galera Charter (as defined in this information statement/prospectus) to (i) increase the number of authorized shares of Galera common stock from 200 million shares to 400 million shares, (ii) permit Galera stockholders to act by written consent in lieu of a meeting and (iii) effect a Galera Reverse Stock Split at a ratio between 1:75 and 1:200, if and when determined by the Galera Board.

Galera and Obsidian have proprietary rights to trademarks, trade names and service marks appearing in this information statement/prospectus that are important to their respective businesses. Solely for convenience, the trademarks, trade names and service marks may appear in this information statement/prospectus without the ^® and TM symbols, but any such references are not intended to indicate, in any way, that Galera or Obsidian forgo or will not assert, to the fullest extent under applicable law, their rights or the rights of the applicable licensors to these trademarks, trade names and service marks. All trademarks, trade names and service marks appearing in this information statement/prospectus are the property of their respective owners.

Unless otherwise indicated or as the context otherwise requires, all references in this information statement/prospectus to:

 

•

“Acquisition Inquiry” means, with respect to a party, an inquiry, indication of interest or request for information (other than an inquiry, indication of interest or request for information made or submitted by Obsidian, on the one hand, or Galera, on the other hand, to the other Party) that would reasonably be expected to lead to an Acquisition Proposal, other than, as applicable, with respect to the concurrent financing, a Permitted Galera Bridge Financing or a Permitted Obsidian Bridge Financing;

•

“Acquisition Proposal” means, with respect to any party to the merger agreement, any proposal or offer from any Person (other than the other party or any of its Representatives) providing for an Acquisition Transaction (in each case other than in connection with a Permitted Galera Bridge Financing, a Permitted Obsidian Bridge Financing, the concurrent financing, or the exercise or repurchase of existing equity interests);

 

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“Acquisition Transaction” means any transaction or series of related transactions involving (other than, as applicable, conversion of the Galera Series B Preferred Stock and the concurrent financing):

 

•

any merger, consolidation, amalgamation, share exchange, business combination, issuance of securities, acquisition of securities, reorganization, recapitalization, tender offer, exchange offer or other similar transaction: (i) in which a party is a constituent entity, (ii) in which a Person or “group” (as defined in the Exchange Act and the rules promulgated thereunder) of Persons directly or indirectly acquires beneficial or record ownership of securities representing more than 20% of the outstanding securities of any class of voting securities of a party or any of its Subsidiaries or (iii) in which a party or any of its Subsidiaries issues securities representing more than 20% of the outstanding securities of any class of voting securities of such party or any of its Subsidiaries; or

 

•

any sale, lease, exchange, transfer, license, acquisition or disposition of any business or businesses or assets that constitute or account for 20% or more of the consolidated book value or the fair market value of the assets of a party and its Subsidiaries, taken as a whole;

 

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“Annual Meeting Galera Stockholder Vote” means the approval by Galera stockholders, prior to the consummation of the Contemplated Transactions, of an amendment to Galera’s organizational documents permitting Galera stockholders to act by written consent in lieu of a meeting;

 

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“closing” refers to the closing of the mergers;

 

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“Code” refers to the Internal Revenue Code of 1986, as amended;

 

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“concurrent financing” refers to Galera’s sale of shares of Galera’s Series C Non-Voting Convertible Preferred Stock, $0.001 par value (“Galera Series C preferred stock”), for an aggregate purchase price of approximately $350.0 million (less any proceeds received by Obsidian in connection with a Permitted Obsidian Bridge Financing), prior to the closing;

 

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“Concurrent PIPE Financing Amount” means $350,000,000;

 

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“Contemplated Transactions” means the mergers and the other transactions contemplated by the merger agreement, including the CVR agreement and the concurrent financing;

 

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“CVRs” refers to (1) the one contingent value right for each share of Galera common stock, representing the right to receive a pro rata portion of 80% of any potential future net proceeds received by Parent or its affiliates from the development, commercialization, licensing, sale or other disposition of the Legacy Product, or related intellectual property during the five years following the closing and (2) the one contingent value right for each share of Galera common stock, representing the right to receive a pro rata portion of 95% of any potential future net proceeds received by Parent or its affiliates from the Supportive-Care Product Divestiture during the ten years following the closing, each of which will be issued pursuant to a Contingent Value Rights Agreement as contemplated by the merger agreement (the “CVR agreement”);

 

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“CVR Product Agreements” refers to (1) any agreement entered into by Parent or its affiliates during the five years after the closing under which Parent or its affiliate exclusively licenses, sells, assigns, transfers or divests to a third party the rights to develop and commercialize tilarginine, Galera’s legacy product candidate (the “Legacy Product Agreement”) and (2) the Asset Purchase and Sale Agreement, dated as of October 15, 2025, by and among Galera (and its affiliate named therein) and Biossil, Inc. (the “Supportive-Care Agreement”);

 

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“DGCL” refers to the General Corporation Law of the State of Delaware;

 

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“Galera” refers to Galera Therapeutics, Inc., a Delaware corporation;

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“Galera Authorized Common Stock Increase” means the approval by the Galera stockholders of, and the filing with the Secretary of State of the State of Delaware of, an amendment to the Galera charter to increase the authorized number of shares of Galera common stock to 400,000,000 shares, with no change to the number of authorized shares of Galera preferred stock;

 

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“Galera Board” refers to the board of directors of Galera;

 

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“Galera Board Adverse Recommendation Change” means to withhold, amend, withdraw or modify the Galera Board Recommendation in a manner adverse to Obsidian or to adopt resolutions by the Galera Board or any committee thereof to withdraw or modify the Galera Board Recommendation in a manner adverse to Obsidian or to adopt, approve or recommend (or publicly propose to adopt, approve or recommend) any Acquisition Proposal;

 

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“Galera Board Recommendation” means the recommendation that Galera’s stockholders vote to approve the Galera Stockholder Matters.

 

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“Galera common stock” refers to the common stock, par value $0.001 per share, of Galera;

 

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“Galera Exchangeable Warrants” means those certain warrants to purchase stock, dated as of February 17, 2023, by and between Galera and the holders party thereto;

 

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“Galera merger” refers to the merger of Merger Sub 2 with and into Galera, with Galera surviving the merger as a wholly-owned subsidiary of Parent;

 

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“Galera merger effective time” refers to the effective time of the Galera merger;

 

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“Galera Reverse Stock Split” means an amendment to the Galera Charter authorizing a reverse stock split of Galera common stock with a split ratio between 1:75 and 1:200, to occur after the effectiveness of the registration statement of which this information statement/prospectus forms a part;

 

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“Galera stockholders” refers to the holders of Galera common stock;

 

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“Galera Stockholder Matters” means the vote of Galera stockholders to approve the Galera merger;

 

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“Galera Terminable Warrants” means those certain warrants to purchase common stock, dated as of May 11, 2020, by and between Galera and the holders party thereto;

 

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“Galera Triggering Event” means any of the following: (i) Galera shall have failed to include in the Galera Information Statement the Galera Board Recommendation, (ii) the Galera Board or any committee thereof shall have made a Galera Board Adverse Recommendation Change or approved, endorsed or recommended any Acquisition Proposal (other than with Obsidian), (iii) Galera shall have entered into any letter of intent or similar document or any Contract relating to any Acquisition Proposal (other than an Acceptable Confidentiality Agreement pursuant to Section 6.5 of the merger agreement) or (iv) the Galera Board or any committee thereof shall have failed to recommend against any Acquisition Proposal that is a tender offer or exchange offer within 10 Business Days after the commencement thereof;

 

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“IRS” refers to the Internal Revenue Service;

 

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“Legacy IP Rights” means all intellectual property rights of Galera that (i) are necessary or reasonably useful to develop, commercialize or otherwise exploit any Legacy Product and (ii) were not divested pursuant to the Supportive-Care Product Agreement;

 

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“Legacy Product” means any pharmaceutical product containing the small molecule known as tilarginine (“tilarginine”) and any pharmaceutically acceptable salt, polymorph, crystal form, prodrug or solvate thereof that the manufacture, use or sale of which would, absent a license thereto, infringe the claim of any patent right within the Legacy IP Rights that covers the composition of matter for tilarginine;

 

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“merger agreement” means the Agreement and Plan of Merger, dated April 14, 2026, by and among Galera, Obsidian, Parent, Merger Sub 1 and Merger Sub 2;

 

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“Merger Sub 1” refers to Onyx MergerSub, Inc., a Delaware corporation and a wholly-owned subsidiary of Parent;

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“Merger Sub 2” refers to Gazelle Merger Subsidiary, Inc., a Delaware corporation and a wholly-owned subsidiary of Parent;

 

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“mergers” means the Galera merger and the Obsidian merger;

 

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“Nasdaq” means The Nasdaq Stock Market;

 

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“Obsidian” refers to Obsidian Therapeutics, Inc., a Delaware corporation;

 

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“Obsidian Board” refers to the board of directors of Obsidian;

 

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“Obsidian Board Adverse Recommendation Change” means a resolution by the Obsidian Board or any committee thereof to withdraw or modify the Obsidian Board Recommendation in a manner adverse to Parent or Galera or to adopt, approve or recommend (or publicly propose to adopt, approve or recommend) any Acquisition Proposal;

 

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“Obsidian common stock” refers to the common stock, par value $0.0001 per share, of Obsidian;

 

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“Obsidian merger” refers to the merger of Merger Sub 1 with and into Obsidian, with Obsidian surviving the merger as a wholly-owned subsidiary of Parent;

 

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“Obsidian merger effective time” refers to the effective time of the Obsidian merger;

 

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“Obsidian stockholders” refers to the holders of Obsidian common stock;

 

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“Obsidian Triggering Event” means any of the following: (i) the Obsidian Board or any committee thereof shall have approved, endorsed or recommended any Acquisition Proposal or (ii) Obsidian shall have entered into any letter of intent or similar document or any Contract relating to any Acquisition Proposal (other than an Acceptable Confidentiality Agreement);

 

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“OTCQB” means The Over the Counter Quote Bulletin Board—Venture Market;

 

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“Parent” refers Gazelle Parent, Inc., a Delaware corporation;

 

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“Parent Board” refers to the board of directors of Parent;

 

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“Parent common stock” refers to the common stock, par value $0.001 per share, of Parent;

 

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“Permitted Galera Bridge Financing” means a financing of an amount of up to $1,800,000 to fund Galera’s operations during the period commencing on the date of the merger agreement and continuing until the earlier to occur of the termination of the merger agreement and the Galera merger effective time;

 

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“Permitted Obsidian Bridge Financing” means a financing to fund Obsidian’s operations provided by Obsidian’s stockholders during the period commencing on the date of the merger agreement and continuing until the earlier to occur of the termination of the merger agreement and the Galera merger effective time;

 

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“Required Obsidian Stockholder Approval” means the affirmative vote of the holders of at least (i) a majority of the then outstanding shares of Obsidian common stock outstanding on the record date for the Obsidian written consent and (ii) a majority of the then outstanding shares of Obsidian preferred stock voting as a single class on an as-converted basis;

 

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“Superior Offer” means an unsolicited bona fide written Acquisition Proposal (with all references to 20% in the definition of Acquisition Transaction being treated as references to 50% for these purposes) that: (i) was not obtained or made as a direct or indirect result of a breach of (or in violation of) the merger agreement and (ii) is on terms and conditions that the Obsidian Board or the Galera Board, as applicable, determines in good faith, based on such matters that it deems relevant (including the likelihood of consummation thereof and the financing terms and any termination or break-up fees and conditions to consummation thereof), as well as any written offer by the other Party to the merger agreement to amend the terms of the merger agreement, and following consultation with its outside legal counsel and financial advisors, if any, are more favorable, from a financial point of view, to Obsidian’s stockholders or Galera’s stockholders, as applicable, than the terms of the Contemplated Transactions and is not subject to any financing conditions (and if financing is required, such financing is then fully committed to the third party); and

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“Supportive-Care Product Divestiture” means the divestiture affected by the Asset Purchase and Sale Agreement, dated as of October 15, 2025 (the “Supportive-Care Product Agreement”), by and among Galera and its affiliate named therein and Biossil, Inc. (“Biossil”), as may be amended from time to time, pursuant to which Galera sold, transferred and assigned to Biossil all right, title and interest in and to the assets exclusively related to the (a) the small molecule known as GC4419 (“GC4419”), (b) the small molecule known as GC4711 (“GC4711”) and (c) any other small molecule owned or controlled by Galera prior to the execution of the Supportive-Care Product Agreement, the manufacture, use or sale of which would, absent a license thereto, infringe the claim of any patent right that covers the composition of matter for GC4419 or GC4711, and with respect to (a), (b) and (c), any pharmaceutically acceptable salt, polymorph, crystal form, prodrug or solvate thereof.

TABLE OF CONTENTS

 

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS			1
QUESTIONS AND ANSWERS			4
SUMMARY			10
RISK FACTORS			25
MARKET PRICE AND DIVIDEND INFORMATION			110
THE GALERA STOCKHOLDER CONSENT			111
THE MERGERS			112
THE MERGER AGREEMENT			150
AGREEMENTS RELATED TO THE MERGERS			170
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGERS			177
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE RECEIPT OF THE CVRS			181
APPRAISAL RIGHTS			183
INFORMATION REGARDING GALERA			188
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF GALERA			207
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS OF GALERA			219
INFORMATION REGARDING OBSIDIAN			221
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF OBSIDIAN			267
MANAGEMENT OF OBSIDIAN			281
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS OF OBSIDIAN			285
EXECUTIVE COMPENSATION OF OBSIDIAN			288
DIRECTOR COMPENSATION OF OBSIDIAN			302
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS			304
INFORMATION REGARDING PARENT			309
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS OF PARENT			317
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION			320
DESCRIPTION OF PARENT CAPITAL STOCK			332
COMPARISON OF STOCKHOLDERS’ RIGHTS			336
LEGAL MATTERS			359
EXPERTS			359
HOUSEHOLDING			359
WHERE YOU CAN FIND MORE INFORMATION			360
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS OF GALERA			F-1
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS OF OBSIDIAN			F-1
APPENDIX A - AGREEMENT AND PLAN OF MERGER
APPENDIX B - CONTINGENT VALUE RIGHTS AGREEMENT
APPENDIX C - OPINION OF LUCID CAPITAL MARKETS, LLC
APPENDIX D - GALERA STOCKHOLDER SUPPORT AGREEMENT
APPENDIX E - OBSIDIAN STOCKHOLDER SUPPORT AGREEMENT
APPENDIX F - OBSIDIAN LOCK-UP AGREEMENT
APPENDIX G - REGISTRATION RIGHTS AGREEMENT
APPENDIX H - SECURITIES PURCHASE AGREEMENT

 

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This information statement/prospectus contains forward-looking statements within the meaning of federal securities laws concerning Galera, Obsidian, the combined company, the mergers and other matters that involve material risks, assumptions and uncertainties.

This information statement/prospectus contains expressions of opinions, expectations, beliefs, plans, objectives, assumptions, or projections regarding future events or future results and therefore are, or may be deemed to be, “forward-looking statements.” All statements, other than statements of historical fact, included herein regarding Galera’s, Obsidian’s or the combined company’s strategy, future operations, financial position, future revenues, projected costs, plans, prospects and objectives are forward-looking statements. Words such as “anticipate,” “estimate,” “continue,” “expect,” “project,” “intend,” “plan,” “believe,” “target,” “objective,” “goal,” “positions,” “prospects,” “potential,” “will,” “would,” “should,” “could,” “may” and words and terms of similar substance are intended to identify forward-looking statements. All forward-looking statements are present expectations or forecasts of future events and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Discussions containing these forward-looking statements may be found, among other places herein, in the sections entitled “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Galera” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Obsidian” beginning on pages 24, 206 and 266, respectively, of this information statement/prospectus. In addition to the factors discussed in those sections, the following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements:

 

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the initiation timing, progress, results and cost of OBX-115, as well as research and development programs and current and future preclinical and clinical studies, including statements regarding the timing of initiation and completion of studies or trials and related preparatory work, the period during which the results of the trials will become available and our current and future programs;

 

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the ability to identify research priorities and efficiently discover and develop product candidates, including by applying learnings from one program to other programs and from one modality to other modalities;

 

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the ability and the potential to successfully manufacture drug substances, delivery vehicles, and product candidates for preclinical use, for clinical trials and on a larger scale for commercial use, if approved;

 

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the ability of preclinical studies and clinical trials to demonstrate safety and efficacy of product candidates, and other positive results;

 

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the beneficial characteristics, and the potential safety, efficacy and therapeutic effects of product candidates;

 

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the timing, scope and likelihood of regulatory filings and approvals, including timing of Investigational New Drug applications and final U.S. Food and Drug Administration (“FDA”) approval of current product candidates or any future product candidates;

 

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the timing, scope or likelihood of foreign regulatory filings and approvals;

 

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estimates of the number of patients that will enroll and the ability to initiate, recruit and enroll patients in and conduct and successfully complete clinical trials at the projected pace;

 

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the ability to scale-up manufacturing and processing approaches to appropriately address anticipated commercial needs, which will require significant resources;

 

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the ability to maintain and further develop the specific shipping, storage, handling and administration of OBX-115 at the clinical sites;

 

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the ability and willingness of third-party strategic collaborators to continue research and development activities relating to development candidates and product candidates;

 

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the ability to obtain funding for operations necessary to complete further development and commercialization of product candidates;

 

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the ability to obtain and maintain regulatory approval of product candidates;

 

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the ability to commercialize products, if approved;

 

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the pricing and reimbursement of product candidates, if approved;

 

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the implementation of any business model, and any strategic plans with respect to business, product candidates, and technology;

 

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the establishment and maintenance of protections for intellectual property rights covering product candidates (current or future), including the extensions of existing patent terms where available, the validity of intellectual property rights held by third parties, and the ability not to infringe, misappropriate or otherwise violate any third-party intellectual property rights;

 

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estimates of future expenses, revenues and capital requirements and needs for additional financing;

 

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future agreements with third parties in connection with the development and commercialization of product candidates and any other approved product;

 

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the size and growth potential of the markets for product candidates and the ability to serve those markets;

 

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financial performance;

 

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the rate and degree of market acceptance of product candidates;

 

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regulatory developments in the United States and foreign countries;

 

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

 

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the ability to produce products or product candidates with advantages in turnaround times or manufacturing costs;

 

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

 

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the ability to attract and retain key scientific or management personnel;

 

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the impact of laws and regulations;

 

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estimates of the period of time for which cash, cash equivalents, and marketable securities will be sufficient to fund future operating expenses and capital expenditure requirements;

 

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the anticipated use of the proceeds from the concurrent financing;

 

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developments relating to competitors and the pharmaceutical industry; and

 

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other risks and uncertainties, including those listed under the caption “Risk Factors.”

The foregoing list of factors is not exhaustive. Although these forward-looking statements are based on assumptions that Galera and Obsidian believe are reasonable when made, Galera and Obsidian caution you that forward-looking statements are not guarantees of future performance and that actual results of operations, financial condition and liquidity, and industry developments may differ materially from statements made in or suggested by the forward-looking statements contained in this information statement/prospectus. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this information statement/prospectus. Except as required by applicable law, none of Galera, Obsidian or Parent undertake to update these forward-looking statements to reflect facts, circumstances, assumptions or events that occur after the date the forward-looking statements are made. In the event that a party does update any forward-looking statement, no inference should be made that the parties will make additional updates with respect to that statement, related matters or any other forward-looking statements.

 

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For additional information about factors that could cause actual results to differ materially from those described in the forward-looking statements, please see the reports that Galera has filed with the SEC as described in the section entitled “Where You Can Find More Information” beginning on page 356 of this information statement/prospectus.

 

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QUESTIONS AND ANSWERS

The following answers are intended to briefly address some commonly asked questions that stockholders of Galera may have regarding the transactions contemplated by the merger agreement (the “transactions”). You should read carefully the remainder of this information statement/prospectus because the information in this section does not provide all the information that might be important to you with respect to the transactions. Additional important information is also contained in the appendices to this information statement/prospectus and elsewhere. See the section entitled “Where You Can Find More Information” beginning on page 356 of this information statement/prospectus.

General

 

Q:

Why are Galera stockholders receiving this information statement/prospectus?

 

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On April 14, 2026, Galera entered into the merger agreement with Obsidian, Parent, Merger Sub 1 and Merger Sub 2. A copy of the merger agreement is attached to this information statement/prospectus as Appendix A. Pursuant to the merger agreement, (1) Merger Sub 1 will merge with and into Obsidian, with Obsidian surviving the merger as the surviving corporation and a wholly-owned subsidiary of Parent and (2) Merger Sub 2 will merge with and into Galera, with Galera surviving the Galera merger as the surviving corporation and a wholly-owned subsidiary of Parent.

Holders of approximately [ ]% of the outstanding shares of Galera common stock as of [ ], 2026, executed a written consent in lieu of a meeting, adopting the merger agreement and the transactions contemplated thereby (the “Galera written consent”). As a result, no additional stockholder vote or special meeting is required in connection with the mergers.

This document constitutes both an information statement of Galera and a prospectus of Parent. It is an information statement because Galera is required to provide its stockholders with notice of the Galera written consent. It is a prospectus because Parent is offering shares of Parent common stock to Galera stockholders and Obsidian stockholders in exchange for outstanding shares of Galera common stock and Obsidian common stock, as applicable, as consideration for the mergers and provide important details about Parent and the rights of Galera stockholders and Obsidian stockholders as potential stockholders of Parent.

This information statement/prospectus also constitutes notice to you of the availability of appraisal rights in connection with the Galera merger under Section 262 of the DGCL (“Section 262”), the full text of which may be accessed without subscription or cost at the following publicly available website: https://delcode.delaware.gov/title8/c001/sc09/#262 and is expressly incorporated herein by reference.

 

Q:

Did the Galera Board approve the merger agreement?

 

A:

Yes. After careful consideration, the Galera Board (i) determined that the transactions contemplated by the merger agreement are fair to, advisable and in the best interests of Galera and its stockholders; (ii) determined that the merger agreement and the transactions contemplated thereby and the other actions contemplated by the merger agreement are advisable; (iii) determined that it is in the best interests of Galera and its stockholders to recommend, upon the terms and subject to the conditions set forth in the merger agreement, that the stockholders of the Company vote to approve the Galera merger; (iv) approved the transactions contemplated by the merger agreement, as fair to and in the best interests of Galera and its stockholders; (v) adopted and declared advisable the merger agreement and the consummation by Galera of the transactions contemplated by the merger agreement on the terms and subject to the conditions set forth in the merger agreement; and (vi) recommended, on the terms and subject to the conditions set forth in the merger agreement, that the stockholders of Galera vote to approve the Galera merger.

 

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For the factors considered by the Galera Board in reaching its decision to approve the Galera merger and the merger agreement, see the section entitled “The Mergers—Galera’s Reasons for the Mergers” beginning on page 119 of this information statement/prospectus.

 

Q:

Why are Galera and Obsidian proposing the mergers?

 

A:

The Galera Board and the Obsidian Board believe that the mergers will benefit Galera stockholders and Obsidian stockholders, respectively, by creating a combined company that will be able to leverage the combined company’s business model and growth potential as a publicly listed company, and, where applicable, its cash resources.

For more details on the reasons for the mergers, see the section entitled “The Mergers—Galera’s Reasons for the Mergers” and “—Obsidian’s Reasons for the Mergers” beginning on pages 119 and 122, respectively, of this information statement/prospectus.

 

Q:

What will happen in the mergers?

 

A:

Parent will acquire (1) Obsidian, by merging Merger Sub 1 with and into Obsidian, with Obsidian surviving the merger as a wholly-owned subsidiary of Parent and (2) Galera, by merging Merger Sub 2 with and into Galera, with Galera surviving the merger as a wholly-owned subsidiary of Parent. At the Obsidian merger effective time, each outstanding share of Obsidian common stock (including those resulting from the conversion of the Obsidian preferred stock, the Obsidian Banc of California, Inc. warrants, and Obsidian common stock issued in connection with any interim permitted financings, but excluding dissenting shares and certain excluded shares as described in the accompanying information statement/prospectus) will be converted into the right to receive a number of shares of Parent common stock, calculated as described in the accompanying information statement/prospectus (the “Obsidian merger consideration”). Immediately following the Obsidian merger effective time, at the Galera merger effective time, each outstanding share of Galera common stock (including those resulting from the conversion of the Galera preferred stock and the Galera pre-funded warrants, but excluding dissenting shares and certain excluded shares as described in the enclosed information statement/prospectus) will be converted into the right to receive a number of shares of Parent common stock calculated as described in the accompanying information statement/prospectus (the “Galera merger consideration” and, together with the Obsidian merger consideration, the “merger consideration”). No cash consideration will be received by Galera or Obsidian stockholders in the mergers, including any cash that otherwise would be received for fractional shares. With respect to fractional shares, no fraction of a share of Parent common stock will be issued in the mergers; however, in lieu of fractional shares, each Obsidian or Galera stockholder who would otherwise be entitled to a fraction of a share of Parent common stock (after aggregating all fractional shares of Parent common stock that otherwise would be received by such holder) will be automatically converted into the right to receive one full additional share of Parent common stock.

The percentage of the combined company that pre-closing Galera security holders will own as of the closing of the mergers is subject to adjustment based on the valuation of Galera immediately prior to the closing. The valuation of Galera is subject to a dollar-for-dollar adjustment if Final Galera net cash (as defined in the merger agreement) is above or below the Galera target net cash of $1.8 million, provided that any Permitted Galera Bridge Financing will not cause the Final Galera net cash (as defined in the merger agreement) to exceed $1.8 million.

For every $200,000 decrease in the Final Galera net cash (as defined in the merger agreement) below $(2.00) million, pre-closing Galera security holders (other than those investors participating in the concurrent financing) would own approximately 2.5 basis points (or two and one half hundredths of a percentage point) less, and pre-closing Obsidian security holders and investors in the concurrent financing, collectively, would own approximately 2.5 basis points (or two and one half hundredths of a

 

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percentage point) more, of the outstanding shares of Parent common stock at closing. Final Galera net cash as defined in the merger agreement can be, and likely will be, a negative number and the amount of the adjustment described above is not capped. As an illustration, if the Final Galera net cash is $(2.00) million, the valuation of Galera would be $10.00 million, and (assuming gross proceeds of $350.0 million from the concurrent financing), the pre-closing Galera security holders (other than the investors participating in the concurrent financing) would own approximately 1.29% of the combined company, the pre-closing Obsidian security holders would own approximately 53.46% of the combined company, and investors in the concurrent financing would own approximately 45.25% of the combined company, in each case on a fully-diluted basis, using the treasury stock method.

As of June 22, 2026, the Galera exchange ratio is estimated to be approximately 0.7515 (after giving effect to the Galera Reverse Stock Split (as defined below) and assuming a Galera Reverse Stock Split ratio of 1:200). This estimate is subject to adjustment prior to closing for the number of outstanding shares of Parent common stock and Galera common stock, in each case as of immediately prior to the effective time, and the Final Galera net cash (and as a result, Galera stockholders could own more or less of the combined company than may be implied by the assumed Galera exchange ratio). The assumed Galera exchange ratio is based on (a) a valuation of Galera at $10.00 million, subject to adjustment if Final Galera net cash exceeds or falls below $(2.00) million (with any such difference resulting in a dollar-for-dollar adjustment to Galera’s valuation), and (b) the assumed Galera Reverse Stock Split ratio noted above, although Galera’s board of directors may instead effect the Galera Reverse Stock Split at another ratio within the approved range of 1:75 to 1:200, which would result in a corresponding adjustment to the Galera exchange ratio.

As of June 22, 2026, the Obsidian exchange ratio is estimated to be approximately 0.1375 (after giving effect to the Galera Reverse Stock Split and assuming a Galera Reverse Stock Split ratio of 1:200). This estimate is subject to adjustment prior to closing for the number of outstanding shares of Galera common stock and Obsidian common stock, in each case as of immediately prior to the effective time. The assumed Obsidian exchange ratio is based on a valuation of Obsidian at $413.5 million.

The estimated aggregate number of shares of Parent common stock that Parent expects to issue to Galera’s securityholders at the closing of the Galera merger is 781,649 shares, reflecting an expected per share value of $12.00, assuming the Galera merger occurred as of June 22, 2026 (after giving effect to the Galera preferred stock conversion, the assumed Galera Reverse Stock Split ratio and the assumed Galera exchange ratio). The estimated aggregate number of shares of Parent common stock that Parent expects to issue to Obsidian’s securityholders at the closing of the Obsidian merger is 31,647,468 shares, reflecting an expected per share value of $12.00, assuming the Obsidian merger occurred as of June 22, 2026, the assumed Galera Reverse Stock Split ratio and the assumed Obsidian exchange ratio.

 

Q:

When do you expect to complete the mergers?

 

A:

We currently expect to complete the mergers and the concurrent financing by the third quarter of 2026. However, we cannot assure you when or if the mergers or the concurrent financing will occur. The conditions to the mergers are described in the section entitled “The Merger Agreement—Mutual Conditions to Completion of the Mergers” beginning on page 161 of this information statement/prospectus.

 

Q:

What are the CVRs?

 

A:

In connection with the mergers and immediately prior to the Galera merger effective time, Parent and Obsidian will enter into the CVR agreement with Equiniti Trust Company, LLC (“Rights Agent”), pursuant to which Galera stockholders of record as of immediately prior to the Galera merger effective time (“CVR Holders”) will receive CVRs for each outstanding share of Galera common stock held by such stockholder as of such date. The CVRs represent (1) the right to receive a pro rata portion of 80%

 

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of any potential future net proceeds received by Parent or its affiliates from the development, commercialization, licensing, sale or other disposition of the Legacy Product, or related intellectual property during the five years following the closing of the mergers and (2) the right to receive a pro rata portion of 95% of any potential future net proceeds received by Parent or its affiliates from the Supportive-Care Product Divestiture during the ten years following the closing.

If any amounts become payable pursuant to the CVRs, the Rights Agent will distribute such amounts to the CVR Holders in accordance with the terms of the CVR agreement. There can be no assurance that the CVR Holders will receive any payments with respect to the CVR agreement.

The CVRs are solely contractual rights and do not constitute equity or ownership interests in Parent, Galera, Obsidian or any of their respective affiliates, and Parent, Galera and Obsidian will cooperate, including by making changes to the CVR agreement, as necessary, to ensure that the CVRs are not subject to registration under the Securities Act, the Exchange Act, or applicable state securities or “blue sky” laws. The CVRs are not transferable except in accordance with the terms of the CVR agreement.

The foregoing description of the CVR agreement is qualified in its entirety by reference to the full text of the CVR Agreement, which is attached to this information statement/prospectus as Appendix B.

 

Q:

What happens if the mergers are not completed?

 

A:

If the mergers are not completed, holders of Obsidian common stock and Galera common stock will not receive any consideration for their shares in connection with the Obsidian merger or the Galera merger and holders of Galera common stock will not receive any CVRs. Instead, Galera will remain an independent public company and Galera common stock would be expected to continue to be quoted on the OTCQB. In addition, in certain circumstances, a termination fee may be required to be paid by Galera or Obsidian. See the section entitled “The Merger Agreement—Termination and Termination Fees” beginning on page 163 of this information statement/prospectus for a discussion of the circumstances under which a termination fee will be required to be paid.

 

Q:

Is the Galera merger expected to be taxable to Galera stockholders?

 

A:

No, except for any gain recognized in connection with the issuance of the CVRs. Galera and Obsidian each intend that the merger will qualify as a transaction described in Section 351 and Section 368(a) of the Code. Thus, subject to the limitations and qualifications described in “Material U.S. Federal Income Tax Consequences of the Mergers” beginning on page 176 of this information statement/prospectus, U.S. holders of Galera common stock (“Galera U.S. holders”) will not recognize gain or loss upon the exchange of their Galera common stock for Parent common stock in the Galera merger except for the receipt of the CVRs. The issuance of the CVRs to Galera U.S. holders is expected to be treated as additional consideration paid with respect to such Galera common stock in connection with the Galera merger. As a result, Galera U.S. holders are expected to recognize gain (but not loss) with respect to their shares of Galera common stock held, in an amount equal to the lesser of (i) any gain realized with respect to such shares and (ii) the fair market value of the CVRs. For a more detailed summary of the material U.S. federal income tax consequences of the mergers and the CVRs, see “Material U.S. Federal Income Tax Consequences of the Mergers” and “Material U.S. Federal Income Tax Consequences of the Receipt of CVRs” beginning on pages 176 and 180, respectively, of this information statement/prospectus. For a more detailed discussion of the risks related to the U.S. federal income tax treatment, see the risk factors under “Risks Related to the Mergers” beginning on page 24 of this information statement/prospectus.

 

Q:

Is the Obsidian merger expected to be taxable to Obsidian stockholders?

 

A:

No. Galera and Obsidian each intend that the merger will qualify as a transaction described in Section 351 and Section 368(a) of the Code. Thus, subject to the limitations and qualifications

 

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described in “Material U.S. Federal Income Tax Consequences of the Mergers” beginning on page 176 of this information statement/prospectus, U.S. holders of Obsidian common stock will not recognize gain or loss upon the exchange of their Obsidian common stock for Parent common stock in the Obsidian merger. For a more detailed summary of the material U.S. federal income tax consequences of the mergers, see “Material U.S. Federal Income Tax Consequences of the Mergers” beginning on page 176 of this information statement/prospectus. For a more detailed discussion of the risks related to the U.S. federal income tax treatment, see the risk factors under “Risks Related to the Mergers” beginning on page 24 of this information statement/prospectus.

 

Q:

What are the material U.S. federal income tax consequences of the receipt of CVRs by Galera U.S. holders?

 

A:

The issuance of the CVRs to Galera U.S. holders is expected to be treated as additional consideration paid with respect to such Galera common stock in connection with the Galera merger. As a result, Galera U.S. holders are expected to recognize gain (but not loss) with respect to their shares of Galera common stock held, in an amount equal to the lesser of (i) any gain realized with respect to such shares and (ii) the fair market value of the CVRs. Please review the information in the section entitled “Material U.S. Federal Income Tax Consequences of the Receipt of CVRs” beginning on page 180 of this information statement/prospectus for a more complete description of the material U.S. federal income tax consequences of the receipt of CVRs to Galera U.S. holders, including possible alternative treatments.

 

Q:

Do Galera stockholders have appraisal or dissenters’ rights?

 

A:

Yes. Under applicable Delaware law, Galera stockholders that did not execute the Galera written consent have the right to dissent from the Galera merger and request to receive the “fair value” of their shares of Galera common stock in cash. Perfection of dissenters’ rights is complex. The procedures for exercising dissenters’ rights is described in the section entitled “Appraisal Rights” beginning on page 182 of this information statement/prospectus. Additionally, the full text of the applicable provisions of the DGCL relative to dissenters’ rights may be accessed without subscription or cost at the following publicly available website: https://delcode.delaware.gov/title8/c001/sc09/#262 and is expressly incorporated herein by reference.

 

Q:

Whom should Galera stockholders contact with questions about the mergers?

 

A:

If a Galera stockholder has any questions about this information statement/prospectus or the mergers, please contact Joel Sussman at jsussman@galeratx.com.

 

Q:

What is the concurrent financing?

 

A:

On April 14, 2026, Galera entered into a subscription agreement with certain investors, pursuant to which Galera agreed to sell, and such investors agreed to purchase, shares of Galera Series C preferred stock for an aggregate purchase price of approximately $350.0 million (less any proceeds received by Obsidian in connection with a Permitted Obsidian Bridge Financing), prior to the closing of the mergers. The closing of the concurrent financing is conditioned upon the satisfaction or waiver of each of the conditions to the closing of the mergers (other than those conditions which, by their nature, are to be satisfied at the closing of the transactions contemplated by the merger agreement), as well as certain other conditions. The concurrent financing is more fully described in the section titled “Agreements Related to the Mergers—Concurrent Financing” beginning on page 174 of this information statement/prospectus.

 

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Q:

What information about Galera is available on the Internet?

 

A:

A copy of this information statement/prospectus is available for download free of charge at www.sec.gov.

Additionally, the Galera website address is www.galeratx.com, which is used to distribute important information about Galera. At the “Investors” tab of that website (under the link “SEC Filings”), Galera makes available, free of charge, its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements, ownership reports on Forms 3, 4 and 5 and any amendments to those reports as soon as practicable after they are electronically filed with the SEC.

Information from the Galera website is not incorporated by reference into this information statement/prospectus.

 

Q:

What do Galera stockholders need to do now?

 

A:

After you have carefully read this document, you do not need to take any action to approve the mergers because the merger agreement has already been adopted by the requisite stockholder approval through the Galera written consent.

You do not need to do anything at this time. After the completion of the Galera merger, Parent will cause its exchange agent to send you instructions for receiving the Galera merger consideration and exchanging shares of Galera common stock for shares of Parent common stock.

 

Q:

If the mergers are completed, will the Parent common stock be listed for trading?

 

A:

Yes. The shares of Parent common stock you will receive in the mergers are expected to be listed on Nasdaq following the completion of the mergers. Until the mergers are consummated, the Parent common stock will not be listed on any securities exchange.

Completion of the mergers is subject to, among other conditions, the Parent common stock being approved for listing on Nasdaq, subject to official notice of issuance. There can be no assurance such listing condition will be met or that Parent will obtain such approval from Nasdaq. If such listing condition is not met or if such approval is not obtained, the mergers will not be consummated unless the condition is waived. The Nasdaq condition set forth in the merger agreement is not expected to be waived by the applicable parties.

Shares of Parent common stock received in the mergers are expected to be freely transferable under applicable securities laws, except for any shares of Parent common stock subject to the lock-up agreements entered into by certain executive officers, directors and stockholders of Obsidian.

 

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RISK FACTORS

Investing in Parent common stock involves risks, some of which are related to the mergers. In addition to the other information contained in or incorporated by reference into this information statement/ prospectus, including the matters addressed under the caption entitled “Cautionary Statement Regarding Forward-Looking Statements,” You should carefully consider the following risk factors. Please see the section entitled “Where You Can Find More Information” beginning on page 356 of this information statement/prospectus. These risk factors are not exhaustive, and investors are encouraged to perform their own investigation with respect to each of the businesses of Galera and Obsidian because these risks will relate to the combined business of Galera and Obsidian following the consummation of the mergers. The occurrence of one or more of the events or circumstances described in these risk factors, alone or in combination with other events or circumstances, may adversely affect the ability to complete or realize the anticipated benefits of the mergers, and may have a material adverse effect on the combined company, as well as the respective businesses of Galera and Obsidian, as well as their respective financial condition or results of operations. The risks discussed below may not prove to be exhaustive and are based on certain assumptions made by Galera and Obsidian which later may prove to be incorrect or incomplete. Galera, Obsidian and the combined company may face additional risks and uncertainties that are not presently known to Galera or Obsidian, or that are currently deemed immaterial, which may also impair their business or financial condition.

Risks Related to the Mergers

The Galera exchange ratio will not be adjusted based on the market price of Galera common stock, so the Galera merger consideration received at closing may have a greater or lesser value than at the time the merger agreement was signed.

At the Galera merger effective time, each share of Galera common stock outstanding immediately prior to the Galera merger effective time will be converted into the right to receive a number of shares of Parent common stock equal to the Galera exchange ratio. The Galera exchange ratio is based on a Galera equity value of $13.8 million, subject to dollar-for-dollar adjustment if the Final Galera net cash is above or below the Galera target net cash of $1.8 million (provided in no event will any Permitted Galera Bridge Financing cause the Final Galera net cash to be greater than $1.8 million), but will not be adjusted to reflect changes in the market price of Galera common stock. The Galera exchange ratio will not be determined until the closing of the Galera merger.

The illustrative post-closing ownership percentages described in this information statement/prospectus are based upon a number of assumptions, including (i) a valuation for Galera of $10.00 million (assuming Galera Net Cash of $(2.00) million as of the closing), (ii) a valuation for Obsidian of $413.5 million, and (iii) the relative capitalization of Galera and Obsidian. Any decrease in the amount of Galera Net Cash at closing will decrease the number of shares of Parent common stock that Galera stockholders will be entitled to receive pursuant to the merger agreement (and their corresponding post-closing ownership percentage).

Any changes in the market price of Galera common stock before the completion of the Galera merger will not affect the number of shares of Parent common stock that Galera stockholders will be entitled to receive pursuant to the merger agreement. Therefore, if before the completion of the Galera merger the market price of Galera common stock increases from the market price on the date of the merger agreement, Galera stockholders could receive merger consideration with substantially less value relative to the then-current market price of Galera common stock than the parties had negotiated when they established the Galera exchange ratio. Similarly, if before the completion of the Galera merger the market price of Galera common stock declines, Galera stockholders could receive merger consideration with substantially more value relative to the then-current market price of Galera common stock. The merger agreement does not include a price-based termination right.

For further information regarding the Galera exchange ratio, see the section entitled “The Merger Agreement—Merger Consideration—Galera Exchange Ratio” beginning on page 152 of this information statement/prospectus.

 

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Failure to complete the mergers may result in Galera or Obsidian paying a termination fee to the other party, which could harm the future business and operations of the applicable party.

If the mergers are not completed, each of Galera and Obsidian is subject to the following risks:

 

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if the merger agreement is terminated by Obsidian due to Galera’s material breach, or by Galera upon Galera’s entry into a Permitted Alternative Agreement (as defined below) for a Superior Offer, Galera may be required to pay Obsidian a non-refundable termination fee of $500,000, plus up to $250,000 in reasonable and documented out-of-pocket third-party expenses incurred by Obsidian in connection with the transactions;

 

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if the merger agreement is terminated by Galera due to Obsidian’s material breach, due to an Obsidian Board Adverse Recommendation Change, or by Obsidian upon Obsidian’s entry into a Permitted Alternative Agreement for a Superior Offer, Obsidian may be required to pay Galera a non-refundable termination fee of $1,000,000, plus up to $250,000 in reasonable and documented out-of-pocket third-party expenses incurred by Galera in connection with the transactions;

 

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the price of Galera common stock may decline and could fluctuate significantly; and

 

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costs related to the mergers, such as financial advisor, legal and accounting fees, must be paid by the applicable party even if the mergers are not completed.

The parties to the merger agreement have acknowledged that each termination fee represents a good faith, fair estimate of the damages that the receiving party and its affiliates would suffer upon termination of the merger agreement, and that any amount payable pursuant to the termination fee provisions is not a penalty, but rather liquidated damages. The parties have further agreed that the payment of the applicable termination fee shall be the sole and exclusive remedy of a party following a termination of the merger agreement by the other party.

If the merger agreement is terminated and the Galera Board or the Obsidian Board, as applicable, determines to seek another business combination, there can be no assurance that such party will be able to find a partner with whom a business combination would yield greater benefits than the benefits to be provided under the merger agreement.

If the conditions to the mergers are not satisfied or waived, the mergers may not occur.

Even if the Required Galera Stockholder Approval and the Required Obsidian Stockholder Approval are obtained, specified conditions must be satisfied or waived to complete the mergers. These conditions include, among others: (i) the absence of any law or order prohibiting the consummation of the mergers; (ii) the effectiveness of the registration statement of which this information statement/prospectus forms a part; (iii) the approval for listing of the shares of Parent common stock to be issued in connection with the mergers on Nasdaq; (iv) the accuracy of the representations and warranties of each party, subject to specified materiality standards; (v) the performance in all material respects by each party of its obligations under the merger agreement; (vi) the receipt of the concurrent financing proceeds; and (vii) the absence of a material adverse effect with respect to each of Galera and Obsidian. These conditions are described in more detail in the section entitled “The Merger Agreement—Mutual Conditions to Completion of the Mergers” beginning on page 161 of this information statement/prospectus.

It is a condition of the consummation of the mergers that the shares of Parent common stock to be issued in connection with the mergers is approved for listing on Nasdaq, but such condition can be waived by the parties. If Nasdaq determines not to approve the listing application, Obsidian and Galera have not made a determination as to whether or not to waive this condition and, though they do not expect to waive this condition, they could decide to waive it and complete the merger in such circumstance. Accordingly, there can be no assurance such listing condition will be met.

If Obsidian and Galera agree to waive the requirement that the Nasdaq listing application be accepted for listing prior to the consummation of the mergers, and their respective boards of directors determine to proceed with the closing of the mergers, Nasdaq may determine not to approve the listing of Parent’s common stock

 

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based on a failure to satisfy the applicable initial listing criteria. Parent may appeal such determination to a Nasdaq hearings panel; however, there can be no assurance that such appeal would be successful. If Parent’s common stock is not listed on Nasdaq, there may be no established public trading market for such common stock, which would likely result in limited liquidity and increased volatility, and would adversely affect Parent’s ability to raise additional capital or to enter into strategic transactions. In addition, the absence of a Nasdaq listing would make it more difficult for stockholders to sell Parent’s common stock in the public market.

Neither Galera nor Obsidian can assure you that all of the conditions to the consummation of the mergers will be satisfied or waived. If the conditions are not satisfied or waived, the mergers may not occur or the closing may be delayed, and each of Galera and Obsidian may lose some or all of the intended benefits of the mergers.

If Galera and Obsidian complete the mergers, the combined company will need to raise additional capital by issuing equity securities or additional debt or through licensing arrangements, which may cause significant dilution to the combined company’s stockholders or restrict the combined company’s operations.

Additional financing may not be available to the combined company when it is needed or may not be available on favorable terms. To the extent that the combined company raises additional capital by issuing equity securities, such financing will cause additional dilution to all securityholders of the combined company, including Galera’s pre-merger stockholders, Obsidian’s pre-merger stockholders and investors in the concurrent financing. It is also possible that the terms of any new equity securities may have preferences over the Parent common stock. Any debt financing the combined company enters into may involve covenants that restrict its operations. These restrictive covenants may include limitations on additional borrowing and specific restrictions on the use of the combined company’s assets, as well as prohibitions on its ability to create liens, pay dividends, redeem its stock or make investments. In addition, if the combined company raises additional funds through licensing arrangements, it may be necessary to grant licenses on terms that are not favorable to the combined company.

If the mergers are not completed, the Galera Board may decide to pursue a liquidation and dissolution of Galera. In such an event and in light of Galera’s current capital resource constraints, it is unlikely that substantial resources would be available for distributions to Galera’s stockholders.

Although Galera has entered into the merger agreement, the closing may be delayed or may not occur at all. If for any reason the mergers are not completed, the Galera Board may elect to, among other things, attempt to complete another strategic transaction, attempt to sell or otherwise dispose of the various assets of Galera, or seek to continue to operate Galera’s business. Any of these alternatives would be costly and time-consuming and would require that Galera obtain additional near-term funding. Galera expects that it would be difficult to secure such funding in a timely manner, on favorable terms or at all.

If the mergers are not completed, the Galera Board may decide that it is in the best interests of Galera’s stockholders to dissolve the company and liquidate its assets. In that event, the amount of cash, if any, available for distribution to Galera’s stockholders would depend on the timing of such decision and the timing of such liquidation since the amount of cash available for distribution continues to decrease as Galera funds its operations and incurs fees and expenses related to the mergers. In addition, if the Galera Board were to approve and recommend, and Galera’s stockholders were to approve, a dissolution of Galera, it would be required under the DGCL to pay its outstanding obligations, as well as to make reasonable provision for contingent and unknown obligations, prior to making any distributions in liquidation to Galera’s stockholders. As a result of this requirement, a portion of Galera’s assets may need to be reserved pending the resolution of such obligations. In addition, Galera may be subject to litigation or other claims related to a liquidation and dissolution of the company. If a liquidation and dissolution were pursued, the Galera Board, in consultation with its advisors, would need to evaluate these matters and make a determination about a reasonable amount to reserve. Accordingly, in such a circumstance and in light of Galera’s current capital resources, it is highly unlikely that substantial resources, if any, would be available for distributions to Galera’s stockholders. Galera’s stockholders would likely lose all or a significant portion of their investment.

 

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Certain provisions of the merger agreement may discourage third parties from submitting competing proposals, including proposals that may be superior to the transactions.

The terms of the merger agreement prohibit each of Galera and Obsidian from soliciting competing proposals or cooperating with persons making unsolicited takeover proposals, except in limited circumstances as described in further detail in the section entitled “The Merger Agreement—Non-Solicitation” beginning on page 159 of this information statement/prospectus. In addition, if the merger agreement is terminated under specified circumstances, Galera may be required to pay Obsidian a non-refundable termination fee of $500,000, plus up to $250,000 in reasonable and documented out-of-pocket third party expenses incurred by Obsidian in connection with the transactions (the “Galera Termination Fee”) and Obsidian may be required to pay Galera a non-refundable termination fee of $1,000,000, plus up to $250,000 in reasonable and documented out-of-pocket third party expenses incurred by Galera in connection with the transactions (the “Obsidian Termination Fee”). These termination fees may discourage third parties from submitting competing proposals to Galera or Obsidian or their respective stockholders, and may cause the Galera Board or the Obsidian Board to be less inclined to recommend a competing proposal.

Galera stockholders may not receive any payment on the CVRs, and the CVRs may expire valueless.

The right of Galera stockholders to receive any future payment on or derive any value from the CVRs will be contingent solely upon the occurrence of certain milestone events within the time periods specified in the CVR Agreement and the consideration received being greater than the amounts permitted to be withheld or deducted under the CVR Agreement. Specifically, payments under the CVRs with respect to the Legacy Product Agreement are contingent upon CVR Proceeds being received by Parent or its affiliates under any Legacy Product Agreement prior to the fifth anniversary of the closing, and payments under the CVRs with respect to the Supportive-Care Agreement are contingent upon CVR Proceeds being received by Parent or its affiliates under the Supportive-Care Agreement prior to the tenth anniversary of the closing. There is no guarantee that Parent will receive any proceeds under either CVR Product Agreement within the applicable time periods. In the event that no CVR Proceeds are received within the applicable time periods, no payments will be made under the CVR Agreement, and the CVRs will expire valueless.

Stockholders could file lawsuits relating to the mergers.

As of the date of this information statement/prospectus, there are no pending lawsuits challenging the mergers. However, potential plaintiffs may file lawsuits challenging the mergers. The outcome of any future litigation is uncertain. Such litigation, if not resolved, could prevent or delay consummation of the mergers and result in substantial costs to Galera, Obsidian, or the combined company, including any costs associated with the indemnification of directors and officers. One of the closing conditions is the absence of any order or legal requirement that restrains, enjoins, or otherwise prevents the consummation of the mergers. Therefore, if a plaintiff were successful in obtaining an injunction prohibiting the consummation of the mergers on the agreed-upon terms, then such injunction may prevent the mergers from being consummated, or from being consummated within the expected time frame.

Risks Related to the Combined Company

Following completion of the mergers, the combined company will be susceptible to many of the risks described in the sections titled “Risks Relating to Galera” and “Risks Relating to Obsidian” beginning on pages 31 and 52, respectively, of this information statement/prospectus. To the extent any of the events in the risks described in those sections occur, the potential benefits of the mergers may not be realized and the results of operations and financial condition of the combined company could be adversely affected in a material way. This could cause the market price of the Parent common stock to decline.

 

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The market price of Parent common stock is expected to be volatile, and the market price of the Parent common stock may drop following the mergers.

The market price of the Parent common stock following the mergers could be subject to significant fluctuations. Some of the factors that may cause the market price of the Parent common stock to fluctuate include:

 

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results of clinical trials and preclinical studies of the combined company’s product candidates, or those of the combined company’s competitors or the combined company’s existing or future collaborators;

 

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failure to meet or exceed financial and development projections the combined company may provide to the public;

 

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failure to meet or exceed the financial and development projections of the investment community;

 

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if the combined company does not achieve the perceived benefits of the mergers as rapidly or to the extent anticipated by financial or industry analysts;

 

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announcements of significant acquisitions, strategic collaborations, joint ventures or capital commitments by the combined company or its competitors;

 

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actions taken by regulatory agencies with respect to the combined company’s product candidates, clinical studies, manufacturing process or sales and marketing terms;

 

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disputes or other developments relating to proprietary rights, including patents, litigation matters, and the combined company’s ability to obtain patent protection for its technologies;

 

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additions or departures of key personnel;

 

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significant lawsuits, including patent or stockholder litigation;

 

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if securities or industry analysts do not publish research or reports about the combined company’s business, or if they issue adverse or misleading opinions regarding its business and stock;

 

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changes in the market valuations of similar companies;

 

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general market or macroeconomic conditions or market conditions in the pharmaceutical and biotechnology sectors;

 

•

sales of securities by the combined company or its securityholders in the future;

 

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if the combined company fails to raise an adequate amount of capital to fund its operations or continued development of its product candidates;

 

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trading volume of the Parent common stock;

 

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announcements by competitors of new commercial products, clinical progress or lack thereof, significant contracts, commercial relationships or capital commitments;

 

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the introduction of technological innovations or new therapies that compete with the products and services of the combined company; and

 

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period-to-period fluctuations in the combined company’s financial results.

The combined company may incur losses for the foreseeable future and might never achieve profitability.

The combined company may never become profitable, even if the combined company is able to complete clinical development for one or more product candidates and eventually commercialize such product candidates. The combined company will need to successfully complete significant research, development, testing and regulatory compliance activities that, together with projected general and administrative expenses, are expected to result in substantial increased operating losses for at least the next several years. Even if the combined company does achieve profitability, it may not be able to sustain or increase profitability on a quarterly or annual basis.

 

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The combined company will incur additional costs and increased demands upon management as a result of complying with the laws and regulations affecting public companies.

The combined company will incur significant legal, accounting and other expenses as a public company that Obsidian did not incur as a private company, including costs associated with public company reporting obligations under the Exchange Act. The combined company’s management team will consist of the executive officers of Obsidian prior to the mergers, some of whom have not previously managed and operated a public company. These executive officers and other personnel will need to devote substantial time to gaining expertise related to public company reporting requirements and compliance with applicable laws and regulations to ensure that the combined company complies with all of these requirements. Any changes the combined company makes to comply with these obligations may not be sufficient to allow it to satisfy its obligations as a public company on a timely basis, or at all. These reporting requirements, rules and regulations, coupled with the increase in potential litigation exposure associated with being a public company, could also make it more difficult for the combined company to attract and retain qualified persons to serve on the board of directors or on board committees or to serve as executive officers, or to obtain certain types of insurance, including directors’ and officers’ insurance, on acceptable terms.

The unaudited pro forma condensed combined financial information for Galera and Obsidian included in this information statement/prospectus is preliminary, and the combined company’s actual financial position and operations after the mergers may differ materially from the unaudited pro forma condensed combined financial information included in this information statement/prospectus.

The unaudited pro forma condensed combined financial information for Galera and Obsidian included in this information statement/prospectus is presented for illustrative purposes only and is not necessarily indicative of the combined company’s actual financial condition or results of operations of future periods, or the financial condition or results of operations that would have been realized had the entities been combined during the period presented. The combined company’s actual results and financial position after the mergers may differ materially and adversely from the unaudited pro forma condensed combined financial information included in this information statement/prospectus. The exchange ratio formulas reflected in this information statement/prospectus are preliminary. The final Galera exchange ratio and Obsidian exchange ratio will each be determined in accordance with the applicable formula in the merger agreement and could differ materially from the preliminary exchange ratios used to prepare the pro forma adjustments. For more information, see the section entitled “Unaudited Pro Forma Condensed Combined Financial Information” beginning on page 316 of this information statement/prospectus.

Galera and Obsidian do not anticipate that the combined company will pay any cash dividends in the foreseeable future.

The current expectation is that the combined company will retain its future earnings, if any, to fund the growth of the combined company’s business as opposed to paying dividends. As a result, capital appreciation, if any, of the Parent common stock will be your sole source of gain, if any, for the foreseeable future. An active trading market for the Parent common stock may not develop and its stockholders may not be able to resell their shares of Parent common stock for a profit, if at all.

Prior to the mergers, there had been no public market for shares of Obsidian common stock. An active trading market for the Parent common stock may never develop or be sustained. If an active market for the Parent common stock does not develop or is not sustained, it may be difficult for its stockholders to sell their shares at an attractive price or at all.

Future sales of shares by existing stockholders could cause the Parent common stock price to decline.

If existing securityholders of Galera and Obsidian sell, or indicate an intention to sell, substantial amounts of the Parent common stock in the public market after legal restrictions on resale discussed in this information

 

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statement/prospectus lapse, the trading price of the Parent common stock could decline. Based on shares outstanding as of May 19, after giving effect to the concurrent financing and shares expected to be issued upon completion of the mergers, the combined company is expected to have outstanding a total of approximately 61,595,784 shares of Parent common stock immediately following the completion of the mergers.

Certain of these shares are subject to lock-up agreements entered into by certain securityholders of Obsidian, owning in the aggregate 193,269,632 shares, or 72% of the outstanding shares of Obsidian common stock (on a fully diluted basis), pursuant to which such securityholders have agreed not to transfer shares of Parent common stock (including shares received in the mergers and shares issuable upon exercise of options, warrants or convertible securities) for the 180-day period following the Galera merger effective time, subject to specified exceptions. Following the expiration of these lock-up agreements, the relevant stockholders will not be restricted from selling shares of the Parent common stock held by them, other than by applicable securities laws. Stockholders not subject to these lock-up agreements will not be restricted from selling shares of the Parent common stock held by them, other than by applicable securities laws. In addition, (i) shares of Parent common stock that are subject to outstanding options or warrants of Galera or Obsidian will become eligible for sale in the public market to the extent permitted by the provisions of various vesting agreements and Rules 144 and 701 under the Securities Act and (ii) as of the consummation of the mergers, approximately 29,166,667 shares of Parent common stock will be subject to registration rights. If these shares are sold, the trading price of the Parent common stock could decline.

The Parent Bylaws contain exclusive forum provisions, which may limit a stockholder’s ability to bring a claim in a judicial forum it finds favorable and may discourage lawsuits with respect to such claims.

The Parent Charter and Parent Bylaws provide that, unless Parent consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware is the sole and exclusive forum for any state law claims for any derivative action or proceeding brought on Parent’s behalf alleging state law claims, any action asserting a breach of fiduciary duty, any action asserting a claim against Parent arising pursuant to the DGCL, Parent’s certificate of incorporation or Parent’s bylaws, any action to interpret, apply, enforce, or determine the validity of Parent’s certificate of incorporation or bylaws, or any action asserting a claim against Parent that is governed by the internal affairs doctrine (the “Delaware Forum Provision”). The Delaware Forum Provision does not apply to claims arising under the Exchange Act or the Securities Act. The Parent Bylaws further provide that, unless Parent consents in writing to an alternative forum, the federal district courts of the United States will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act (the “Federal Forum Provision”). Parent has selected the federal district courts of the United States as the exclusive forum for such Securities Act causes of action. The Parent Bylaws provide that any person or entity purchasing or otherwise acquiring any interest in any shares of Parent common stock is deemed to have notice of and consented to the Delaware Forum Provision and the Federal Forum Provision.

The Delaware Forum Provision and the Federal Forum Provision may impose additional litigation costs on stockholders pursuing the claims identified above, particularly if the stockholders bringing a claim that is covered by the Delaware Forum Provision do not reside in or near the State of Delaware. In addition, these forum selection clauses in the Parent Bylaws may limit Parent stockholders’ ability to bring a claim in a judicial forum that they find favorable for disputes with Parent or Parent’s directors, officers or employees, which may discourage such lawsuits against Parent and its directors, officers and employees even though an action, if successful, might benefit Parent stockholders. The Federal Forum Provision may also impose additional litigation costs on stockholders who assert that the provision is not enforceable or is invalid. Alternatively, if the Delaware Forum Provision or Federal Forum Provision is found inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, Parent may incur additional costs associated with resolving such matters in other jurisdictions, which could have an adverse effect on Parent’s business, financial condition or results of operations. The Court of Chancery of the State of Delaware and the federal district courts of the United States may also reach different judgments or results than would other courts, including courts where a stockholder considering an action may be located or would otherwise choose to bring the action, and such judgments may be more or less favorable to Parent than to its stockholders.

 

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Risks Relating to Galera

Throughout these “Risks Relating to Galera,” unless otherwise noted, “our,” “we,” and “the Company” refers to Galera Therapeutics, Inc. and its subsidiaries.

Risks Related to Our Financial Position and Capital Needs

We have incurred significant operating losses since our inception and anticipate that we will incur continued losses for the foreseeable future.

We incurred losses in each year since our inception in 2012 through 2024, driven by expenses for research and development and our ongoing operations. None of our clinical products have been approved for commercialization, and after the sale to Biossil only one product candidate remains. Historically, we invested substantially all of our efforts and financial resources in identifying, acquiring, in-licensing and developing our historical product candidates, including commencing and conducting clinical trials and providing general and administrative support for these operations. Our net loss for the year ended December 31, 2024 was $19.0 million. During the year ended December 31, 2025, we recorded a $151.0 million non-cash gain from the extinguishment of the royalty purchase liability on our consolidated balance sheet, as the result of the assumption by Biossil of our obligations under the Royalty Agreement (as defined below) with Blackstone Life Sciences (as defined below). As a result, our net income for the year ended December 31, 2025 was $149.0 million. Despite this net income for the 2025 fiscal year, we anticipate incurring losses for the foreseeable future. As of December 31, 2025, we had an accumulated deficit of $307.3 million.

To become consistently profitable, we must succeed in developing and eventually commercializing a product candidate that generates significant revenue. Our prior losses, combined with expected future losses, have had and will continue to have an adverse effect on our stockholders’ equity and working capital.

Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidate.

We may seek to finance our cash needs through securities offerings, debt financings and/or private placements, which may possibly be undertaken in conjunction with a merger or reverse merger. The terms of any financing may adversely affect the holdings or the rights of our stockholders and our issuance of additional securities, whether equity or debt, or the possibility of such issuance, may cause the market price of our common stock to decline. The sale of additional equity or convertible securities would dilute all of our stockholders, including their ownership interest. The incurrence of indebtedness would result in increased fixed or variable payment obligations, and we may be required to agree to certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. We could also be required to seek funds through arrangements with collaborators or otherwise at an earlier stage than otherwise would be desirable and we may be required to relinquish rights to some of our technologies, our product candidate or future revenue streams, or otherwise agree to terms unfavorable to us, any of which may have a material adverse effect on our business, operating results and prospects. If we raise funds through research grants, we may be subject to certain requirements, which may limit our ability to use the funds or require us to share information from our research and development. Raising additional capital through any of these or other means could adversely affect our business and the holdings or rights of our stockholders and may cause the market price of our shares to decline.

Risks Related to the Discovery and Development of Our Product Candidate

We are heavily dependent on the success of our product candidate, tilarginine, which has not received regulatory approval. If development of our product candidate is unsuccessful, we may be unable to obtain required regulatory approvals and be unable to commercialize our product candidate on a timely basis, if at all.

Clinical testing is expensive and can take many years to complete, and its outcome is inherently uncertain. Failure or delay can occur at any time during the clinical trial process. Success in preclinical studies and early clinical trials

 

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does not ensure that later clinical trials will be successful. We have suffered significant and unexpected setbacks in certain of our clinical trials with respect to our historical product candidates. These kind of setbacks can potentially recur in the future due to, among other things, preclinical findings made while clinical trials were underway and safety or efficacy observations made in clinical trials, including previously unreported adverse events. The results of preclinical studies and clinical trials of our product candidate may not be predictive of the results of later-stage clinical trials. A product candidate in later stages of clinical trials may fail to show the desired safety and efficacy traits despite having progressed through preclinical studies and initial clinical trials. Notwithstanding any potential promising results in earlier studies, we cannot be certain that we will not face similar setbacks again in the future. Even if our clinical trials are completed, the results may not be sufficient to obtain regulatory approval for our product candidate.

We rely, and will continue to rely, on third parties to conduct our clinical trials for our product candidate, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials.

We have historically relied on contract research organizations (“CROs”) and clinical trial sites to ensure the proper and timely conduct of our clinical trials. While we may have agreements with our CROs governing their committed activities, and the ability to audit their performance, we have limited influence over their actual performance. We have relied on third-party vendors, such as CROs, scientists and collaborators to provide us with significant data and other information related to our preclinical studies or clinical trials and our business. If such third parties provide inaccurate, misleading or incomplete data, which has occurred in one prior instance with regard to a former product candidate, our business, prospects and results of operations could be materially adversely affected.

The National Defense Authorization Act for Fiscal Year 2026 enacted in December 2025 includes a section titled, “Prohibition on Contracting with Certain Biotechnology Providers,” also known as the BIOSECURE Act, aimed at discouraging federal contracting with certain biotechnology companies for biotechnology equipment or services in China and other countries of concern. The statute prohibits federal executive agencies from procuring any biotechnology equipment or service from a biotechnology company of concern (“BCC”), or contracting with any such company or any entity that procures or uses equipment or services from a BCC. Any company on the Department of Defense’s Chinese Military Companies List (1260H list) is considered a BCC under the new law and the White House Office of Management and Budget also is empowered to designate companies as BCCs based on consultations with Cabinet Secretaries and other key leaders from the executive branch. This legislation may have the effect of restricting the ability of biopharmaceutical companies that enter into contracts with or receive funding from U.S. federal agencies from purchasing services or equipment from certain and other foreign Chinese biotechnology companies.

Success in preclinical studies or earlier clinical trials may not be indicative of results in future clinical trials.

Success in preclinical studies and early clinical trials does not ensure that later clinical trials will generate the same results or otherwise provide adequate data to demonstrate the efficacy and safety of a product candidate. Preclinical studies and early-stage clinical trials are primarily designed to test safety, to study pharmacokinetics and pharmacodynamics and to understand the side effects of our product candidate at various doses and schedules. Success in preclinical studies and early clinical trials does not ensure that later, large-scale efficacy trials will be successful, nor does it predict final results. Our product candidate may fail to show the desired safety and efficacy in clinical development despite positive results in preclinical studies or having successfully advanced through initial clinical trials.

Many companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in late-stage clinical trials even after achieving promising results in preclinical studies and earlier-stage clinical trials. Data obtained from preclinical and clinical activities are subject to varying interpretations, which may delay, limit or prevent regulatory approval.

Our product candidate may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval or result in significant negative consequences following marketing approval, if any.

Undesirable side effects caused by our product candidate could cause regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval

 

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by the FDA or comparable foreign regulatory authorities, such as the EMA or the competent authorities of the member states of the European Union, or EU. Results of clinical trials of our product candidate could reveal a high and unacceptable severity and prevalence of side effects or unexpected characteristics.

If unacceptable side effects arise in the development of our product candidate, we, the FDA, the institutional review board, or IRBs, at the institutions in which our studies are conducted, or the Data Safety Monitoring Board (“DSMB”) could suspend or terminate clinical trials or the FDA or comparable foreign regulatory authorities could require clinical trials to stop or deny approval of our product candidate for any or all targeted indications. Treatment-related side effects could also affect patient recruitment or the ability of enrolled patients to complete the trial or result in potential product liability claims. In addition, these side effects may not be appropriately recognized or managed by the treating medical staff.

In addition, if our product candidate receives marketing approval in the future, and we or others later identify undesirable side effects caused by such products, a number of potentially significant negative consequences could result, including:

 

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regulatory authorities may suspend, withdraw or limit their approval of the product, or seek an injunction against its manufacture or distribution;

 

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the product may be recalled or the way such product is administered to patients may be required to change;

 

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additional restrictions may be imposed on the marketing of the particular product or the manufacturing processes for the product or any component thereof;

 

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regulatory authorities may require the addition of labeling statements, such as a “black box” warning or a contraindication, or issue safety alerts, Dear Healthcare Provider letters, press releases or other communications containing warnings or other safety information about the product;

 

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we may be required to implement a Risk Evaluation and Mitigation Strategy (“REMS”) or similar risk management measures, or create a medication guide outlining the risks of such side effects for distribution to patients, or implement other changes to how a product is distributed or administered;

 

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we may be subject to fines, injunctions or the imposition of civil or criminal penalties;

 

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we could be sued and held liable for harm caused to patients; and

 

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the product may become less competitive.

The biopharmaceutical industries are subject to extensive regulatory obligations and policies that may be subject to significant and abrupt change, including due to judicial challenges, election cycles, and resulting regulatory updates and changes in policy priorities.

On June 28, 2024, the U.S. Supreme Court issued an opinion holding that courts reviewing agency action pursuant to the Administrative Procedure Act (“APA”) “must exercise their independent judgment” and “may not defer to an agency interpretation of the law simply because a statute is ambiguous.” The decision may have a significant impact on how lower courts evaluate challenges to agency interpretations of law, including those by HHS, CMS, FDA and other agencies with significant oversight of the biopharmaceutical industries. The new framework is likely to increase both the frequency of such challenges and their odds of success by eliminating one way in which the government previously prevailed in such cases. As a result, significant regulatory policies will be subject to increased litigation and judicial scrutiny.

In addition, federal agency activities, priorities, leadership, policies, rulemaking, communications, spending and staffing may be significantly impacted by election cycles and legislative developments. For example, the current presidential administration has signaled its continued commitment to significantly reduce government spending through cuts to federal healthcare programs and reductions in the workforces of key government agencies, such as HHS, FDA and CMS. Efforts by the current administration to further limit federal agency

 

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budgets or personnel may result in reductions to agency budgets, employees, and operations. The administration and agencies have also made abrupt announcements about new or changed regulatory policies, such as policies related to the use of artificial intelligence to review product applications. And, the recent federal government shutdown may prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews or other regulatory activities, and may significantly impact the ability of the FDA to timely review and process our regulatory submissions. These developments may lead to greater uncertainty regarding FDA policies, slower response times and longer review periods, potentially affecting our ability to progress development of our product candidate or obtain regulatory approval for our product candidate.

The NIH may also be significantly impacted by election cycles and legislative developments, and has experienced instability impacting biomedical research, including the termination of certain research grants and workforce reductions. Any future decrease in the amount of, or delay in the approval of, appropriations to the NIH (and associated decreases in grants provided by the NIH) could result in fewer grants benefiting life sciences research. These reductions or delays could also result in a decrease in the aggregate amount of grants awarded for life sciences research or the redirection of existing funding to other projects or priorities, any of which in turn could affect our current or future clinical trials.

There are also a number of healthcare-related legislative and regulatory initiatives and reforms in the United States that significantly affect the biopharmaceutical industry. For example, there has been heightened governmental scrutiny in the U.S. of pharmaceutical pricing practices in light of the rising cost of prescription drugs and biologics. Such scrutiny has resulted in several congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for products. Any resulting changes in regulation may result in unexpected delays, increased costs, or other negative impacts on our business that are difficult to predict.

Risks Related to Competition, Retaining Key Employees and Managing Growth

Our future success depends on our ability to retain key executives and to attract, retain and motivate qualified personnel.

We have a limited operating history and are highly dependent on the expertise of the few members of our management team. Although we have entered into employment agreements with our executive officers, each of them may terminate their employment with us at any time. We do not maintain “key person” insurance for any of our executives or other employees. In addition, we rely on consultants and advisors. Our consultants and advisors may be employed by employers other than us and may have commitments under consulting or advisory contracts with other entities that may limit their availability to us.

If we are not able to continue to retain, on acceptable terms, the qualified personnel necessary for the continued operation of our business, we may not be able to sustain our operations.

Risks Related to Intellectual Property

If we are unable to adequately protect our proprietary technology and product candidate, if the scope of the patent protection obtained is not sufficiently broad, or if the terms of our patents are insufficient to protect our product candidate for an adequate amount of time, our competitors could develop and commercialize technology and products similar or identical to ours, and our ability to successfully commercialize our product candidate may be materially impaired.

We rely primarily upon a combination of patents, trademarks, trade secret protection, and other intellectual property rights as well as nondisclosure, confidentiality and other contractual agreements to protect the intellectual property related to our brands, product candidate, and other proprietary technologies. Our success depends on our ability to develop, manufacture, market and sell our product candidate, if approved, and use our

 

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proprietary technologies without alleged or actual infringement, misappropriation or other violation of the patents and other intellectual property rights of third parties. There have been many lawsuits and other proceedings asserting patents and other intellectual property rights in the pharmaceutical and biotechnology industries. We cannot assure you that our product candidate will not infringe existing or future third-party patents. Because patent applications can take many years to issue and may be confidential for 18 months or more after filing, there may be applications now pending of which we are unaware and which may later result in issued patents that we may infringe by commercializing our product candidate. There may also be issued patents or pending patent applications that we are aware of, but that we think are irrelevant to our product candidate, which may ultimately be found to be infringed by the manufacture, sale, or use of our product candidate. Moreover, we may face claims from non-practicing entities that have no relevant product revenue and against whom our own patent portfolio may thus have no deterrent effect. In addition, our product candidate has a complex structure that makes it difficult to conduct a thorough search and review of all potentially relevant third-party patents. Because we have not yet conducted a formal freedom to operate analysis for patents related to our product candidate, we may not be aware of issued patents that a third party might assert are infringed by one of our current or future product candidates, which could materially impair our ability to commercialize our product candidate. Even if we diligently search third-party patents for potential infringement by our products or product candidate, we may not successfully find patents that our products or product candidate, may infringe. If we are unable to secure and maintain freedom to operate, others could preclude us from commercializing our product candidate.

The process of obtaining patent protection is expensive and time-consuming, and we may not be able to prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. We may choose not to seek patent protection for certain innovations or products and may choose not to pursue patent protection in certain jurisdictions, and under the laws of certain jurisdictions, patents or other intellectual property rights may be unavailable or limited in scope and, in any event, any patent protection we obtain may be limited. As a result, in some jurisdictions some of our products currently or in the future may not be protected by patents. We generally apply for patents in those countries where we intend to make, have made, use, offer for sale, or sell products and where we assess the risk of infringement to justify the cost of seeking patent protection. However, we may not accurately predict all the countries where patent protection would ultimately be desirable. If we fail to timely file a patent application in any such country or major market, we may be precluded from doing so at a later date. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories in which we have patent protection that may not be sufficient to terminate infringing activities. In addition, 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.

Furthermore, we cannot guarantee that any patents will be issued from any pending or future owned or licensed patent applications, or that any current or future patents will provide us with any meaningful protection or competitive advantage. Even if issued, existing or future patents may be challenged, including with respect to ownership, narrowed, invalidated, held unenforceable or circumvented, any of which could limit our ability to prevent competitors and other third parties from developing and marketing similar products or limit the length of terms of patent protection we may have for our product candidate and technologies. Moreover, should we be unable to obtain meaningful patent coverage for clinically relevant dosages or infusion rates for our product candidate in jurisdictions with commercially significant markets, our ability to extend and reinforce patent protection for this product candidate in those jurisdictions may be adversely impacted, which could limit our ability to prevent competitors and other third parties from developing and marketing similar products or limit the length of terms of patent protection we may have for our product candidate. Other companies may also design around technologies we have patented, licensed or developed. In addition, the issuance of a patent does not give us the right to practice the patented invention. Third parties may have blocking patents that could prevent us from marketing our products or practicing our own patented technology.

 

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The patent positions of biotechnology and pharmaceutical companies can be highly uncertain and involve complex legal, scientific and factual questions for which important legal principles remain unresolved. As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights may be uncertain. The standards that the United States Patent and Trademark Office (the “USPTO”) and its foreign counterparts use to grant patents are not always applied predictably or uniformly. Changes in either the patent laws, implementing regulations or the interpretation of patent laws may diminish the value of our rights. The legal systems of certain countries do not protect intellectual property rights to the same extent as the laws of the United States, and many companies have encountered significant problems in protecting and defending such rights in foreign jurisdictions. For example, patent laws in various jurisdictions, including significant commercial markets such as Europe, restrict the patentability of methods of treatment of the human body more than United States law does. In addition, many countries, including certain countries in Europe, have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties (for example, the patent owner has failed to “work” the invention in that country, or the third party has patented improvements). In addition, many countries limit the enforceability of patents against government agencies or government contractors. In these countries, the patent owner may have limited remedies, which could materially diminish the value of the patent. Moreover, the legal systems of certain countries, particularly certain developing countries, do not favor the aggressive enforcement of patent and other intellectual property protection, which makes it difficult to stop infringement.

Because patent applications in the United States, Europe and many other jurisdictions are typically not published until 18 months after filing, or in some cases not at all, and because publications of discoveries in scientific literature lag behind actual discoveries, we cannot be certain that we were the first to conceive or reduce to practice the inventions claimed in our issued patents or pending patent applications, or that we were the first to file for protection of the inventions set forth in our patents or pending patent applications. We can give no assurance that all of the potentially relevant art relating to our patents and patent applications has been found; overlooked prior art could be used by a third party to challenge the validity, enforceability and scope of our patents or prevent a patent from issuing from a pending patent application. As a result, we may not be able to obtain or maintain protection for certain inventions. Therefore, the validity, enforceability and scope of our patents in the United States, Europe and in other countries cannot be predicted with certainty and, as a result, any patents that we own or license may not provide sufficient protection against our competitors.

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 a competitive advantage. For example:

 

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others may be able to develop products that are similar to, or better than, ours in a way that is not covered by the claims of our patents;

 

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we might not have been the first to conceive or reduce to practice the inventions covered by our patents or pending patent applications;

 

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

 

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any patents that we obtain may not provide us with any competitive advantages or may ultimately be found invalid or unenforceable; or

 

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we may not develop additional proprietary technologies that are patentable.

We are generally also subject to all of the same risks with respect to protection of intellectual property that we license as we are for intellectual property that we own. We currently in-license certain intellectual property from third parties to be able to use such intellectual property in our products and product candidate and to aid in our research activities. In the future, we may in-license intellectual property from additional licensors. We may rely on certain of these licensors to file and prosecute patent applications and maintain, or assist us in the maintenance of, patents and otherwise protect the intellectual property we license from them. We may have limited control over these activities or any other intellectual property that may be related to our in-licensed

 

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intellectual property. For example, we cannot be certain that such activities by these licensors have been or will be conducted diligently or in compliance with applicable laws and regulations or will result in valid and enforceable patents and other intellectual property rights. We may have limited control over the manner in which our licensors initiate, or support our efforts to initiate, an infringement proceeding against a third-party infringer of the intellectual property rights, or defend certain of the intellectual property that is licensed to us. If we or our licensors fail to adequately protect this intellectual property, our ability to commercialize products could suffer.

We may become involved in lawsuits to protect or enforce our patents or other intellectual property, which could be expensive, time-consuming and unsuccessful.

Competitors may infringe, misappropriate or otherwise violate our patents, trademarks, copyrights, trade secrets or other intellectual property, or those of our licensors. To counter infringement, misappropriation, unauthorized use or other violations, we may be required to file legal claims, which can be expensive and time consuming and divert the time and attention of our management and scientific personnel. In some cases, it may be difficult or impossible to detect third-party infringement or misappropriation of our intellectual property rights, even in relation to issued patent claims, and proving any such infringement may be even more difficult.

We may not be able to prevent, alone or with our licensees or any future licensors, infringement, misappropriation or other violations of our intellectual property rights, particularly in countries where the laws may not protect those rights as fully as in the United States. Any claims we assert against perceived infringers could provoke these parties to assert counterclaims against us alleging that we infringe their patents. In patent litigation in the United States, defendant counterclaims alleging invalidity or unenforceability are commonplace. The outcome following legal assertions of invalidity and unenforceability is unpredictable. We cannot be certain that there is no invalidating prior art, of which we and the patent examiner were unaware during prosecution. If a third party or a defendant were to prevail on a legal assertion of invalidity or unenforceability, we would lose at least part, and perhaps all, of any future patent protection on our current or future product candidates. Such a loss of patent protection could harm our business. In addition, in a patent infringement proceeding, there is a risk that a court will decide that a patent of ours is invalid or unenforceable, in whole or in part, and that we do not have the right to stop the other party from exploiting the claimed subject matter at issue. There is also a risk that, even if the validity of such patents is upheld, the court will construe the patent’s claims narrowly or decide that we do not have the right to stop the other party from exploiting its technology on the grounds that our patents do not cover such technology. An adverse outcome in a litigation or proceeding involving our patents could limit our ability to assert our patents against those parties or other competitors and may curtail or preclude our ability to exclude third parties from making, using, importing and selling similar or competitive products. Any of these occurrences could adversely affect our competitive business position, business prospects and financial condition. Similarly, 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.

In any infringement, misappropriation or other intellectual property litigation, any award of monetary damages we receive may not be commercially valuable. 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 litigation. Moreover, there can be no assurance that we will have sufficient financial or other resources to file and pursue such infringement claims, which typically last for years before they are concluded. Even if we ultimately prevail in such claims, the monetary cost of such litigation and the diversion of the attention of our management and scientific personnel could outweigh any benefit we receive as a result of the proceedings. We may not be able to detect or prevent misappropriation of our intellectual property rights, particularly in countries where the laws may not protect those rights as fully as in the United States. Our business could be harmed if in litigation the prevailing party does not offer us a license on commercially reasonable terms. Any litigation or other proceedings to enforce our intellectual property rights may fail, and even if successful, may result in substantial costs and distract our management and other employees.

 

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Our commercial success depends significantly on our ability to operate without infringing upon the intellectual property rights of third parties.

The biotechnology and pharmaceutical industries are subject to rapid technological change and substantial litigation regarding patent and other intellectual property rights. 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 or obtain, patents that will prevent, limit or otherwise interfere with our ability to make, use and sell our product candidate and services. Numerous third-party patents exist in the fields relating to our products and services, and it is difficult for industry participants, including us, to identify all third-party patent rights relevant to our product candidate, services and technologies. As the biotechnology and pharmaceutical industries expand and more patents are issued, the risk increases that our product candidate may give rise to claims of infringement of the patent rights of others. Moreover, because some patent applications are maintained as confidential for a certain period of time, we cannot be certain that third parties have not filed patent applications that cover our product candidate, services and technologies. Therefore, it is uncertain whether the issuance of any third-party patent would require us to alter our development or commercial strategies for our product candidate or processes, or to obtain licenses or cease certain activities.

Patents could be issued to third parties that we may ultimately be found to infringe. Third parties may have or obtain valid and enforceable patents or proprietary rights that could block us from developing products using our technology. If any third-party patents were held by a court of competent jurisdiction to cover the manufacturing process of our product candidate, constructs or molecules used in or formed during the manufacturing process, or any final product itself, the holders of any such patents may be able to block our ability to commercialize the product candidate unless we obtain a license under the applicable patents, or until such patents expire or they are determined to be held invalid or unenforceable. Our failure to obtain or maintain a license to any technology that we require to develop or commercialize our current and future product candidates may materially harm our business, financial condition and results of operations. Furthermore, we would be exposed to a threat of litigation.

From time to time, we may be party to, or threatened with, litigation or other proceedings with third parties, including non-practicing entities, who allege that our product candidate, components of our product candidate, services, and/or proprietary technologies infringe, misappropriate or otherwise violate their intellectual property rights. The types of situations in which we may become a party to such litigation or proceedings include:

 

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we or our collaborators may initiate litigation or other proceedings against third parties seeking to invalidate the patents held by those third parties or to obtain a judgment that our product candidate or processes do not infringe those third parties’ patents;

 

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we or our collaborators may participate at substantial cost in International Trade Commission proceedings to abate importation of third-party products that would compete unfairly with our products;

 

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if our competitors file patent applications that claim technology also claimed by us or our licensors, we or our licensors may be required to participate in interference, derivation or opposition proceedings to determine the priority of invention, which could jeopardize our patent rights and potentially provide a third party with a dominant patent position;

 

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if third parties initiate litigation claiming that our processes or product candidate infringe their patent or other intellectual property rights, we and our collaborators will need to defend against such proceedings;

 

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if third parties initiate litigation or other proceedings, including inter partes reviews, oppositions or other similar agency proceedings, seeking to invalidate patents owned by or licensed to us or to obtain a declaratory judgment that their products, services, or technologies do not infringe our patents or patents licensed to us, we will need to defend against such proceedings;

 

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we may be subject to ownership disputes relating to intellectual property, including disputes arising from conflicting obligations of consultants or others who were involved in developing our product candidate; and

 

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if a license to necessary technology is terminated, the licensor may initiate litigation claiming that our processes or product candidate infringe or misappropriate its patent or other intellectual property rights and/or that we breached our obligations under the license agreement, and we and our collaborators would need to defend against such proceedings.

These lawsuits and proceedings, regardless of merit, are time-consuming and expensive to initiate, maintain, defend or settle, and could divert the time and attention of managerial and technical personnel, which could materially adversely affect our business. Any such claim could also force use to do one or more of the following:

 

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incur substantial monetary liability for infringement or other violations of intellectual property rights, which we may have to pay if a court decides that the product candidate, service, or technology at issue infringes or violates the third party’s rights, and if the court finds that the infringement was willful, we could be ordered to pay up to treble damages and the third party’s attorneys’ fees;

 

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pay substantial damages to our customers or end users to discontinue use or replace infringing technology with non-infringing technology;

 

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stop manufacturing, offering for sale, selling, using, importing, exporting or licensing the product or technology incorporating the allegedly infringing technology or stop incorporating the allegedly infringing technology into such product, service, or technology;

 

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obtain from the owner of the infringed intellectual property right a license, which may require us to pay substantial upfront fees or royalties to sell or use the relevant technology and which may not be available on commercially reasonable terms, or at all;

 

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redesign our product candidate, services, and technology so they do not infringe or violate the third party’s intellectual property rights, which may not be possible or may require substantial monetary expenditures and time;

 

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enter into cross-licenses with our competitors, which could weaken our overall intellectual property position;

 

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lose the opportunity to license our technology to others or to collect royalty payments based upon successful protection and assertion of our intellectual property against others;

 

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find alternative suppliers for non-infringing products and technologies, which could be costly and create significant delay; or

 

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relinquish rights associated with one or more of our patent claims, if our claims are held invalid or otherwise unenforceable.

Some of our competitors may be able to sustain the costs of complex intellectual property litigation more effectively than we can because they have substantially greater resources. In addition, intellectual property litigation, regardless of its outcome, may cause negative publicity, adversely impact prospective customers, cause product shipment delays, or prohibit us from manufacturing, marketing or otherwise commercializing our products, services and technology. Any uncertainties resulting from the initiation and continuation of any litigation could have a material adverse effect on our ability to raise additional funds or otherwise have a material adverse effect on our business, results of operation, financial condition or cash flows.

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, which could have a material adverse effect on the price of our common stock. 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. The occurrence of any of these events may have a material adverse effect on our business, results of operation, financial condition or cash flows.

 

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If we are unable to protect the confidentiality of our trade secrets, our business and competitive position may be harmed.

In addition to patent and trademark protection, we also rely on trade secrets, including unpatented know-how, technology and other proprietary information, to maintain our competitive position. Because we expect to rely on third parties to manufacture our product candidate, and we may collaborate with third parties on the development of our product candidate, we must, at times, share trade secrets with them. We seek to protect our trade secrets, in part, by entering into non-disclosure and confidentiality agreements with parties who have access to them prior to disclosing our proprietary information, such as our consultants and vendors, or our former or current employees. These agreements typically limit the rights of third parties to use or disclose our confidential information, including our trade secrets. We also enter into confidentiality and invention assignment agreements with our employees and consultants. Despite these efforts, however, any of these parties may breach the agreements and disclose our trade secrets and other unpatented or unregistered proprietary information, and once disclosed, we are likely to lose trade secret protection. Monitoring unauthorized uses and disclosures of our intellectual property is difficult, and we do not know whether the steps we have taken to protect our intellectual property will be effective. In addition, we may not be able to obtain adequate remedies for any such breaches. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and time-consuming, and the outcome is unpredictable. In addition, some courts inside and outside the United States are less willing or unwilling to enforce trade secret protection. A competitor’s discovery of our trade secrets would impair our competitive position and have an adverse impact on our business, operating results and financial condition. Additionally, we cannot be certain that competitors will not gain access to our trade secrets and other proprietary confidential information or independently develop substantially equivalent information and techniques.

Changes in patent law could diminish the value of patents in general, thereby impairing our ability to protect our existing and future product candidates and processes.

As is the case with other biotechnology and pharmaceutical companies, our success is heavily dependent on intellectual property, particularly patents. Obtaining and enforcing patents in the biotechnology and pharmaceutical industries involves both technological and legal complexity, and is therefore costly, time consuming, and inherently uncertain. In addition, the United States has recently enacted and is currently implementing wide-ranging patent reform legislation. Recent patent reform legislation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents. On September 16, 2011, the Leahy-Smith Act was signed into law. The Leahy-Smith Act 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, may affect patent litigation, and switched the United States patent system from a “first-to-invent” system to a “first-to-file” system. Under a “first-to-file” system, assuming the other requirements for patentability are met, the first inventor to file a patent application generally will be entitled to the patent on an invention regardless of whether another inventor had conceived or reduced to practice the invention earlier. The USPTO recently developed new regulations and procedures to govern administration of the Leahy-Smith Act, and many of the substantive changes to patent law associated with the Leahy-Smith Act, in particular, the first-to-file provisions, only became effective on March 16, 2013. Accordingly, it is not clear what, if any, impact the Leahy-Smith Act will have on the operation of our business. The Leahy-Smith Act 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 and financial condition.

In addition, patent reform legislation may pass in the future that could lead to additional uncertainties and increased costs surrounding the prosecution, enforcement and defense of our patents and pending patent applications. Recent U.S. Supreme Court rulings have narrowed the scope of patent protection available in certain circumstances and weakened the rights of patent owners in certain situations. Furthermore, the U.S. Supreme Court and the U.S. Court of Appeals for the Federal Circuit have made, and will likely continue to make, changes in how the patent laws of the United States are interpreted. Similarly, foreign courts have made,

 

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and will likely continue to make, changes in how the patent laws in their respective jurisdictions are interpreted. We cannot predict future changes in the interpretation of patent laws or changes to patent laws that might be enacted into law by United States and foreign legislative bodies. Those changes may materially affect our patents or patent applications and our ability to obtain additional patent protection in the future.

The United States federal government retains certain rights in inventions produced with its financial assistance under the Patent and Trademark Law Amendments Act, or the Bayh-Dole Act. The federal government retains a “nonexclusive, nontransferable, irrevocable, paid-up license” for its own benefit. The Bayh-Dole Act also provides federal agencies with “march-in rights.” March-in rights allow the government, in specified circumstances, to require the contractor or successors in title to the patent to grant a “nonexclusive, partially exclusive, or exclusive license” to a “responsible applicant or applicants.” If the patent owner refuses to do so, the government may grant the license itself. We have received, and in the future may receive financial assistance in support of research and development activities that could result in inventions. We also partner with a number of universities, including the University of Iowa, Northwestern University, and the University of Texas Southwestern Medical Center, with respect to certain of our research, development and manufacturing. While it is our policy to avoid engaging our university partners in projects in which there is a risk that federal funds may be commingled, we cannot be sure that any co-developed intellectual property will be free from government rights pursuant to the Bayh-Dole Act. If, in the future, we own, co-own or license in technology which is critical to our business that is developed in whole or in part with federal funds subject to the Bayh-Dole Act, our ability to enforce or otherwise exploit patents covering such technology may be adversely affected.

If we do not obtain patent term extensions in the United States under the Hatch-Waxman Act and in foreign countries under similar legislation with respect to our product candidate, thereby potentially extending the term of marketing exclusivity for such product candidate, our business may be harmed.

In the United States, a patent that covers an FDA-approved drug or biologic may be eligible for a term extension designed to restore the period of the patent term that is lost during the premarket regulatory review process conducted by the FDA. Depending upon the timing, duration and conditions of FDA marketing approval of our product candidate, one or more of our U.S. patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, or the Hatch-Waxman Act, which permits a patent term extension of up to a maximum of five years beyond the normal expiration of the patent if the patent is eligible for such an extension under the Hatch-Waxman Act as compensation for patent term lost during development and the FDA regulatory review process, which is limited to the approved indication (and potentially additional indications approved during the period of extension) covered by the patent. This extension is limited to only one patent that covers the approved product, the approved use of the product, or a method of manufacturing the product. However, the applicable authorities, including the FDA and the USPTO in the United States, and any equivalent regulatory authority in other countries, may not agree with our assessment of whether such extensions are available, and may refuse to grant extensions to our patents, or may grant more limited extensions than we request.

We may not 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. Even if we are granted such extension, the duration of such extension may be less than our request and the patent term may still expire before or shortly after we receive FDA marketing approval. If we are unable to extend the expiration date of our existing patents or obtain new patents with longer expiry dates, our competitors may be able to take advantage of our investment in development and clinical trials by referencing our clinical and preclinical data to obtain approval of competing products following our patent expiration and launch their product earlier than might otherwise be the case.

Obtaining and maintaining 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.

The USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment, and other similar provisions during the patent application process. In

 

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addition, periodic maintenance fees on issued patents often must be paid to the USPTO and foreign patent agencies over the lifetime of the patent. While an unintentional lapse can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules, 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. Non-compliance events that could result in abandonment or lapse of a patent or patent application include, but are not limited to, failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal documents. If we fail to maintain the patents and patent applications covering our product candidate or procedures, we may not be able to stop a competitor from marketing products that are the same as or similar to our own, which would have a material adverse effect on our business.

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.

During trademark registration proceedings, our trademark application(s) may be rejected. Although we are given an opportunity to respond to those rejections, we may be unable to overcome such rejections. In addition, in the USPTO and in comparable agencies in many foreign jurisdictions, third parties can oppose pending trademark applications and seek to cancel registered trademarks. Opposition or cancellation proceedings may be filed against our trademarks, and our trademarks may not survive such proceedings. Moreover, any name we propose to use with our product 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. The FDA typically conducts a review of proposed product names, including an evaluation of potential for confusion with other product names. If the FDA objects to any of our proposed proprietary product 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.

Our registered or unregistered trademarks or trade names may be challenged, infringed, circumvented, declared generic or determined to be infringing on other marks. We may not be able to protect our rights in these trademarks and trade names, which we need in order to build name recognition with potential partners or customers in our markets of interest. In addition, third parties have used trademarks similar and identical to our trademarks in foreign jurisdictions and have filed or may in the future file for registration of such trademarks. If they succeed in registering or developing common law rights in such trademarks, and if we are not successful in challenging such third-party rights, we may not be able to use these trademarks to market our products in those countries. In any case, 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 not be able to adequately protect our intellectual property rights throughout the world.

Certain of our key patent families have been filed in the United States, as well as in numerous jurisdictions outside the United States. However, our intellectual property rights in certain jurisdictions outside the United States may be less robust. The laws of some foreign countries do not protect intellectual property rights to the same extent as the laws of the United States. For example, the requirements for patentability may differ in certain countries, particularly developing countries, and we may be unable to obtain issued patents that contain claims that adequately cover or protect our current or future product candidates. Many companies have encountered significant problems in protecting and defending intellectual property rights in certain foreign jurisdictions. The legal systems of some countries, particularly developing countries, do not favor the enforcement of patents and other intellectual property protection, especially those relating to life sciences. This could make it difficult for us to stop the infringement of our patents or the misappropriation of our other intellectual property rights. For example, many foreign countries have compulsory licensing laws under which a patent owner must grant licenses to third parties. In addition, many 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.

 

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Proceedings to enforce our patent rights in foreign jurisdictions, whether or not successful, could result in substantial costs and divert our efforts and attention from other aspects of our business. Furthermore, while we intend to protect our intellectual property rights in our expected significant markets, we cannot ensure that we will be able to initiate or maintain similar efforts in all jurisdictions in which we may wish to market current or future product candidates. Consequently, we may not be able to prevent third parties from practicing our technology in all countries outside the United States, or from selling or importing products made using our technology in and into those other jurisdictions where we do not have intellectual property rights. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and may also export infringing products to territories where we have patent protection, but where enforcement is not as strong as that in the United States. These products may compete with our product candidate, and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing. Accordingly, our efforts to protect our intellectual property rights in such countries may be inadequate. In addition, changes in the law and legal decisions by courts in the United States and foreign countries may affect our ability to obtain and enforce adequate intellectual property protection for our technology.

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 product candidate.

We cannot guarantee that any of our or our licensors’ 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 product candidate in any jurisdiction. For example, U.S. patent applications filed before November 29, 2000 and certain U.S. patent applications filed after that date that will not be filed outside the United States remain confidential until patents issue. Patent applications in the United States and elsewhere are 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. Therefore, patent applications covering our product candidate could have been filed by others without our knowledge. Additionally, pending patent applications that have been published can, subject to certain limitations, be later amended in a manner that could cover our product candidate or the use of 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, which may negatively impact our ability to market our product candidate. We may incorrectly determine that our product candidate is 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 product candidate and services. Our failure to identify and correctly interpret relevant patents may negatively impact our ability to develop and market our product candidate and services.

If we fail to identify and correctly interpret relevant patents, we may be subject to infringement claims. We cannot guarantee that we will be able to successfully settle or otherwise resolve such infringement claims. If we fail in any such dispute, in addition to being forced to pay damages, we may be temporarily or permanently prohibited from commercializing our product candidate that are held to be infringing. We might, if possible, also be forced to redesign products, product candidate or services so that we no longer infringe the third-party intellectual property rights. Any of these events, even if we were ultimately to prevail, could require us to divert substantial financial and management resources that we would otherwise be able to devote to our business.

Patent terms may be inadequate to protect our competitive position on our product candidate for an adequate amount of time.

Patents have a limited lifespan, and the protection patents afford is limited. In the United States, if all maintenance fees are timely paid, the natural expiration of a patent is generally 20 years from its earliest U.S.

 

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non-provisional filing date. Even if patents covering our product candidate are obtained, once the patent life has expired for patents covering a product or product candidate, we may be open to competition from competitive products and services. As a result, our patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours.

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

While we seek broad coverage under our existing patent applications, there is always a risk that an alteration to products or processes may provide sufficient basis for a competitor to avoid infringing our patent claims. In addition, patents, if granted, expire and we cannot provide any assurance that any potentially issued patents will adequately protect our product candidate. Once granted, patents may remain open to invalidity challenges including opposition, interference, re-examination, post-grant review, inter partes review, nullification or derivation action in court or before patent offices or similar proceedings for a given period after allowance or grant, during which time third parties can raise objections against such grant. In the course of such proceedings, which may continue for a protracted period of time, the patent owner may be compelled to limit the scope of the allowed or granted claims thus attacked or may lose the allowed or granted claims altogether.

In addition, the degree of future protection afforded by our intellectual property rights is uncertain because even granted intellectual property rights have limitations, and may not adequately protect our business, provide a barrier to entry against our competitors or potential competitors or permit us to maintain our competitive advantage. Moreover, if a third party has intellectual property rights that cover the practice of our technology, we may not be able to fully exercise or extract value from our intellectual property rights. The following examples are illustrative:

 

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others may be able to develop and/or practice technology that is similar to our technology or aspects of our technology, but that are not covered by the claims of the patents that we own or control, assuming such patents have issued or do issue;

 

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we or our licensors or any future strategic partners might not have been the first to conceive or reduce to practice the inventions covered by the issued patents or pending patent applications that we own or have exclusively licensed;

 

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we or our licensors or any future strategic partners might not have been the first to file patent applications covering certain of our inventions;

 

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

 

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

 

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issued patents that we own or have exclusively licensed may not provide us with any competitive advantage, or may be held invalid or unenforceable, as a result of legal challenges by our competitors;

 

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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 products for sale in our major commercial markets;

 

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third parties performing manufacturing or testing for us using our product candidate or technologies could use the intellectual property of others without obtaining a proper license;

 

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parties may assert an ownership interest in our intellectual property and, if successful, such disputes may preclude us from exercising exclusive rights over that intellectual property;

 

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we may not develop or in-license additional proprietary technologies that are patentable;

 

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we may not be able to obtain and maintain necessary licenses on commercially reasonable terms, or at all; and

 

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

 

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Should any of these events occur, they could have a material adverse effect on our business, financial condition, results of operations and prospects.

We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of their former employers or other third parties.

We do and may employ individuals who were previously employed at universities or other biotechnology or pharmaceutical companies, including our licensors, competitors or potential competitors. Although we try to ensure that our employees, consultants and independent contractors do not use the proprietary information or know-how of others in their work for us, and we are not currently subject to any claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of third parties, we may in the future be subject to such claims.

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 or personnel. Such intellectual property rights could be awarded to a third party, and we could be required to obtain a license from such third party to commercialize our technology or product candidate. Such a license may not be available on commercially reasonable terms or at all. 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 and could result in customers seeking other sources for the technology or in ceasing from doing business with us.

Our intellectual property agreements with third parties may be subject to disagreements over contract interpretation, which could narrow the scope of our rights to the relevant intellectual property or technology.

Certain provisions in our intellectual property agreements may be susceptible to multiple interpretations. The resolution of any contract interpretation disagreement that may arise could affect the scope of our rights to the relevant intellectual property or technology or affect 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.

In addition, while we typically require our employees, consultants and contractors who may be involved in the conception or development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who in fact conceives or develops intellectual property that we regard as our own. To the extent that we fail to obtain such assignments, such assignments do not contain a self-executing assignment of intellectual property rights or such assignment agreements are breached, we may be forced to bring claims against third parties, or defend claims they may bring against us, to determine the ownership of what we regard as our intellectual property and this may interfere with our ability to capture the commercial value of such intellectual property. If we fail in prosecuting or defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. Such intellectual property rights could be awarded to a third party, and we could be required to obtain a license from such third party to commercialize our technology or products. Such a license may not be available on commercially reasonable terms or at all. Even if we are successful in prosecuting or defending against such claims, litigation could result in substantial costs and be a distraction to our management and scientific personnel. Disputes regarding ownership or inventorship of intellectual property can also arise in other contexts, such as collaborations and sponsored research. We may be subject to claims that former collaborators or other third parties have an ownership interest in our patents or other intellectual property. If we are subject to a dispute challenging our rights in or to patents or other intellectual property, such a dispute could be expensive and time-consuming. If we are unsuccessful, we could lose valuable rights in intellectual property that we regard as our own.

 

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Other Risks Related to Our Business

The successful commercialization of our product candidate will depend in part on the extent to which third-party payors, including governmental authorities and private health insurers, provide coverage and adequate reimbursement levels, as well as implement pricing policies favorable for our product candidate.

Our ability to successfully commercialize our product candidate for which we may receive regulatory approval will depend in significant part on the availability of coverage and reimbursement from third-party payors, including governmental healthcare programs, such as the Medicare and Medicaid programs in the U.S., private health insurers, managed care organizations, and other entities. Third-party payors may limit coverage to specific products on an approved list, or formulary, which might not include our product candidate. Third-party payors, together with regulators and others, are increasingly challenging the prices charged for pharmaceutical products and related services, in addition to their cost-effectiveness, safety, and efficacy.

Moreover, obtaining coverage and adequate reimbursement is a time-consuming and costly process. We may be required to provide scientific and clinical support for the use of any product to each third-party payor separately with no assurance that approval will be obtained, and we may need to conduct expensive pharmacoeconomic studies in order to demonstrate the cost-effectiveness of our products. We cannot be certain that our product candidate will be considered cost-effective by third-party payors. This process could delay the market acceptance of our product candidate for which we may receive approval and could have a negative effect on our future revenues and operating results.

Our business operations and current and future relationships with investigators, healthcare professionals, consultants, third-party payors, patient organizations, customers and others will be subject to applicable healthcare regulatory laws, which could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm, administrative burdens, and diminished profits and future earnings.

Our business operations and current and future arrangements with investigators, healthcare professionals, consultants, third-party payors, patient organizations, customers and others may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations. These laws may constrain the business or financial arrangements and relationships through which we conduct our operations, including how we research, market, sell and distribute our product candidate, if approved.

Ensuring that our internal operations and future business arrangements with third parties comply with applicable healthcare laws and regulations will involve substantial costs. It is possible that governmental authorities will conclude that our business practices do not comply with current or future statutes, regulations, agency guidance or case law involving applicable fraud and abuse or other healthcare laws and regulations. If our operations are found to be in violation of any of the laws described above or any other governmental laws and regulations that may apply to us, we may be subject to significant penalties, including civil, criminal and administrative penalties, damages, fines, exclusion from government-funded healthcare programs, such as Medicare and Medicaid or similar programs in other countries or jurisdictions, integrity oversight and reporting obligations to resolve allegations of non-compliance, disgorgement, individual imprisonment, contractual damages, reputational harm, diminished profits and the curtailment or restructuring of our operations. If any of the physicians or other providers or entities with whom we expect to do business are found to not be in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs and imprisonment, which could affect our ability to operate our business. Further, defending against any such actions can be costly, time-consuming and may require significant personnel resources. Therefore, even if we are successful in defending against any such actions that may be brought against us, our business may be impaired.

 

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Unfavorable U.S. and global economic conditions could adversely affect our business, financial condition or results of operations.

Our results of operations could be adversely affected by general conditions in the U.S. and global economy and in the U.S. and global financial markets. The global economy, including credit and financial markets, has experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, rising interest and inflation rates, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability. A severe or prolonged economic downturn could result in a variety of risks to our business, including, our ability to raise additional capital when needed on acceptable terms, if at all.

Our business and operations may suffer in the event of information technology system failures, cyberattacks or deficiencies in our cybersecurity.

Despite the implementation of security measures, our information technology systems and those of our third-party CDMOs, CROs, contractors and consultants are vulnerable to attack, interruption and damage from computer viruses and malware (e.g. ransomware), malicious code, natural disasters, terrorism, war, telecommunication and electrical failures, hacking, cyberattacks, phishing attacks and other social engineering schemes, employee theft or misuse, human error, fraud, denial or degradation of service attacks, sophisticated nation-state and nation-state-supported actors or unauthorized access or use by persons inside our organization, or persons with access to systems inside our organization. Some of these vulnerabilities have increased with the widespread use of artificial intelligence technology. Attacks upon information technology systems are increasing in their frequency, levels of persistence, sophistication and intensity, and are being conducted by sophisticated and organized groups and individuals with a wide range of motives and expertise. Furthermore, because the techniques used to obtain unauthorized access to, or to sabotage, systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures. We may also experience security breaches that may remain undetected for an extended period. Even if identified, we may be unable to adequately investigate or remediate incidents or breaches due to attackers increasingly using tools and techniques that are designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic evidence. There can be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, will be fully implemented, complied with or effective in protecting our systems and information.

While we do not believe that we have experienced any significant failure or accident of our systems, from time to time, we have been the target of cybersecurity breach attempts and we expect them to continue as cybersecurity threats have been rapidly evolving in sophistication and becoming more prevalent. We do not believe that these cybersecurity breaches have had a material impact on our operations, but future breaches may have such impact. If such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our programs. For example, the loss of clinical trial data for our product candidate could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. To the extent that any disruption or security breach results in a loss of or damage to our data or applications or other data or applications relating to our technology or product candidate, or inappropriate disclosure or theft of confidential or proprietary information, and we could incur liabilities. Federal, state and international laws and regulations could expose us to enforcement actions and investigations by regulatory authorities, and potentially result in regulatory penalties, fines and significant legal liability, if our information technology security efforts fail. We maintain cyber liability insurance; however, this insurance may not be sufficient to cover the financial, legal, business or reputational losses that may result from an interruption or breach of our systems.

 

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Actual or perceived failures to comply with applicable data protection, privacy and security laws, regulations, standards and other requirements could adversely affect our business, results of operations, and financial condition.

The global data protection landscape is rapidly evolving, and we are or may become subject to numerous state, federal and foreign laws, requirements and regulations governing the collection, use, disclosure, retention, and security of personal data, such as information that we may collect in connection with clinical trials in the U.S. and abroad. Implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future, and we cannot yet determine the impact future laws, regulations, standards, or perception of their requirements may have on our business. This evolution may create uncertainty in our business, affect our ability to operate in certain jurisdictions or to collect, store, transfer use and share personal information, necessitate the acceptance of more onerous obligations in our contracts, result in liability or impose additional costs on us. The cost of compliance with these laws, regulations and standards is high and is likely to increase in the future. Any failure or perceived failure by us to comply with federal, state or foreign laws or regulation, our internal policies and procedures or our contracts governing our processing of personal information could result in negative publicity, government investigations and enforcement actions, claims by third parties and damage to our reputation, any of which could have a material adverse effect on our operations, financial performance and business.

Most healthcare providers, including research institutions from which we obtain patient health information, are subject to privacy and security regulations promulgated under HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or collectively, HIPAA. HIPAA imposes, among other things, certain standards relating to the privacy, security, transmission and breach reporting of individually identifiable health information. While we do not believe we are currently acting or regulated as a covered entity or business associate under HIPAA and thus are not directly regulated under HIPAA, any person may be prosecuted under HIPAA’s criminal provisions either directly or under aiding-and-abetting or conspiracy principles. Consequently, depending on the facts and circumstances, we could face substantial criminal penalties if we knowingly receive individually identifiable health information.

Certain states have also adopted comparable privacy and security laws and regulations, which govern the privacy, processing and protection of health-related and other personal information. For example, the California Consumer Privacy Act, or CCPA, went into effect on January 1, 2020. The CCPA creates individual privacy rights for California consumers and increases the privacy and security obligations of entities handling certain personal information. The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches has increased the likelihood of, and risks associated with data breach litigation. Further, the CPRA generally went into effect on January 1, 2023 and significantly amends the CCPA. The CPRA imposes additional data protection obligations on covered businesses, including additional consumer rights processes, limitations on data uses, new audit requirements for higher risk data, and opt outs for certain uses of sensitive data. It also creates a new California data protection agency authorized to issue substantive regulations and could result in increased privacy and information security enforcement. Additional compliance and business process changes may be required. Similar laws have passed in Virginia, Connecticut, Utah and Colorado and have been proposed in other states and at the federal level, reflecting a trend toward more stringent privacy legislation in the United States. The enactment of such laws could have potentially conflicting requirements that would make compliance challenging. In the event that we are subject to or affected by HIPAA, the CCPA, the CPRA or other domestic privacy and data protection laws, any liability from failure to comply with the requirements of these laws could adversely affect our financial condition.

While we do not currently have any operations outside the United States, should we have any in the future our operations abroad may also be subject to increased scrutiny or attention from data protection authorities. Activities outside the United States impose additional compliance requirements and generate additional risks of enforcement for noncompliance. In Europe, the General Data Protection Regulation, or GDPR, went into effect in May 2018 and imposes strict requirements for processing the personal data of individuals within the European Economic Area, or EEA. Companies that must comply with the GDPR face increased compliance obligations

 

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and risk, including more robust regulatory enforcement of data protection requirements and potential fines for noncompliance of up to €20 million or 4% of the annual global revenues of the noncompliant company, whichever is greater. In addition to fines, a breach of the GDPR may result in regulatory investigations, reputational damage, orders to cease/ change our data processing activities, enforcement notices, assessment notices (for a compulsory audit) and/ or civil claims (including class actions). Among other requirements, the GDPR regulates transfers of personal data subject to the GDPR to third countries that have not been found to provide adequate protection to such personal data, including the United States; in July 2020, the Court of Justice of the EU, or CJEU, limited how organizations could lawfully transfer personal data from the EU/EEA to the United States by invalidating the Privacy Shield for purposes of international transfers and imposing further restrictions on the use of standard contractual clauses, or SCCs. In March 2022, the US and EU announced a new regulatory regime intended to replace the invalidated regulations; however, this new EU-US Data Privacy Framework has not been implemented beyond an executive order signed by former President Biden on October 7, 2022 on Enhancing Safeguards for United States Signals Intelligence Activities. European court and regulatory decisions subsequent to the CJEU decision of July 16, 2020 have taken a restrictive approach to international data transfers. As supervisory authorities issue further guidance on personal data export mechanisms, including circumstances where the SCCs cannot be used, and/or start taking enforcement action, we could suffer additional costs, complaints and/or regulatory investigations or fines, and/or if we are otherwise unable to transfer personal data between and among countries and regions in which we operate, it could affect the manner in which we conduct our business, the geographical location or segregation of our relevant systems and operations, and could adversely affect our financial results.

Further, from January 1, 2021, companies have had to comply with the GDPR and also the United Kingdom GDPR, or UK GDPR, which, together with the amended UK Data Protection Act 2018, retains the GDPR in UK national law. The UK GDPR mirrors the fines under the GDPR, i.e., fines up to the greater of €20 million (£17.5 million) or 4% of global turnover. As we continue to expand into other foreign countries and jurisdictions, we may be subject to additional laws and regulations that may affect how we conduct business.

Although we work to comply with applicable laws, regulations and standards, our contractual obligations and other legal obligations, these requirements are evolving and may be modified, interpreted and applied in an inconsistent manner from one jurisdiction to another, and may conflict with one another or other legal obligations with which we must comply. Claims that we have violated individuals’ privacy rights 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. Any threatened or actual government enforcement action could also generate adverse publicity and require that we devote substantial resources that could otherwise be used in other aspects of our business. Increasing use of social media could give rise to liability, breaches of data security or reputational damage.

Violations of or liabilities under environmental, health and safety laws and regulations could subject us to fines, penalties or other costs that could have a material adverse effect on the success of our business.

We are subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures, the handling, use, storage, treatment and disposal of hazardous materials and wastes and the cleanup of contaminated sites. Our operations involve the use of potentially hazardous and flammable materials, including chemicals and biological materials. Our operations also produce hazardous waste products. We could incur substantial costs as a result of violations of or liabilities under environmental requirements in connection with our operations or property, including fines, penalties and other sanctions, investigation and cleanup costs and third-party claims. Although we generally contract with third parties for the disposal of hazardous materials and wastes from our operations, 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.

Furthermore, environmental laws and regulations are complex, change frequently and have tended to become more stringent. We cannot predict the impact of changes to applicable laws and regulations and cannot

 

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be certain of our future compliance. In addition, we may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations.

Although we maintain workers’ compensation insurance to cover us for costs and expenses we may incur due to injuries to our employees resulting from the use of hazardous materials, this insurance may not provide adequate coverage against potential liabilities. We do not maintain insurance for environmental liability or toxic tort claims that may be asserted against us in connection with our storage or disposal of biological, hazardous or radioactive materials.

Insurance policies are expensive and protect us only from some business risks, which leaves us exposed to uninsured liabilities.

Some of the insurance policies we currently maintain include general liability, employment practices liability, workers’ compensation, umbrella, and directors’ and officers’ liability insurance. These policies may not adequately cover all categories of risk that our business may encounter.

Insurance coverage may become more expensive over time and in the future we may not be able to maintain insurance coverage at a reasonable cost or in sufficient amounts to protect us against certain losses. We do not currently maintain product liability insurance. A successful product liability claim or series of claims brought against us could cause our share price to decline and, if judgments exceed our insurance coverage, could adversely affect our results of operations and business, including preventing or limiting the development and commercialization of any product candidates we develop. We also do not carry specific biological or hazardous waste insurance coverage, and our casualty and general liability insurance policies specifically exclude coverage for damages and fines arising from biological or 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.

We do not know if we will be able to maintain existing insurance with adequate levels of coverage. Any significant uninsured liability may require us to pay substantial amounts, which would adversely affect our cash position and results of operations.

Our employees and independent contractors, including consultants, vendors, and any third parties we may engage in connection with development and commercialization may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could harm our business.

Misconduct by our employees and independent contractors, including consultants, vendors, and any third parties we may engage in connection with development and commercialization, could include intentional, reckless or negligent conduct or unauthorized activities that violate: (i) the laws and regulations of the FDA and other comparable regulatory authorities, including those laws that require the reporting of true, complete and accurate information to such authorities; (ii) manufacturing standards; (iii) data privacy, security, fraud and abuse and other healthcare laws and regulations; or (iv) laws that require the reporting of true, complete and accurate financial information and data. Specifically, sales, marketing and business arrangements in the healthcare 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. Activities subject to these laws could also involve the improper use or misrepresentation of information obtained in the course of clinical trials, creation of fraudulent data in preclinical studies or clinical trials or illegal misappropriation of drug product, which could result in regulatory sanctions and cause serious harm to our reputation. It is not always possible to identify and deter misconduct by employees and other third parties, 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 comply with such laws or regulations. Additionally, we are subject to the risk

 

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that a person or government could allege such fraud or other misconduct, even if none occurred. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business and results of operations, including the imposition of significant civil, criminal and administrative penalties, damages, monetary fines, disgorgements, possible exclusion from participation in Medicare, Medicaid, other U.S. federal healthcare programs or healthcare programs in other jurisdictions, integrity oversight and reporting obligations to resolve allegations of non-compliance, individual imprisonment, other sanctions, contractual damages, reputational harm, diminished profits and future earnings, and curtailment of our operations.

We or the third parties upon whom we depend may be adversely affected by natural disasters and our business continuity and disaster recovery plans may not adequately protect us from a serious disaster.

Natural disasters could severely disrupt our operations and have a material adverse effect on our business, results of operations, financial condition and prospects. If a natural disaster, power outage, public health emergency, such as the novel coronavirus, or other event occurred that prevented us from using all or a significant portion of our headquarters, that damaged critical infrastructure, such as the manufacturing facilities on which we rely, or that otherwise disrupted operations, it may be difficult or, in certain cases, impossible for us to continue our business for a substantial period of time. The disaster recovery and business continuity plans we have in place may prove inadequate in the event of a serious disaster or similar event. We may incur substantial expenses as a result of the limited nature of our disaster recovery and business continuity plans, which could have a material adverse effect on our business.

Our ability to use our net operating losses to offset future taxable income is subject to certain limitations.

In general, under Section 382 of the Code, a corporation that undergoes an “ownership change,” generally defined as a greater than 50% change by value in its equity ownership over a three-year period, is subject to limitations on its ability to utilize its pre change tax attributes (net operating losses, or NOLs, and research and development tax credits) to offset future taxable income. Our existing tax attributes are subject to limitations arising from ownership changes that we have undergone in the past.

The tax treatment of both the issuance of, and the CVRs themselves, is uncertain.

There is no authority directly on point addressing the U.S. federal income tax treatment of the issuance of the contingent value rights. While in form, the CVRs are issued to Galera U.S. holders by Galera by means of an in-kind distribution in respect to each outstanding share of Galera common stock, Galera intends to treat the issuance of the CVRs consistent with the substance of the overall transaction, as additional consideration paid with respect to such Galera common stock in connection with the Galera merger.

Similarly, there is no authority directly on point addressing the U.S. federal income tax treatment of contingent value rights with characteristics similar to the CVRs. Galera intends to treat the CVRs as a distribution of property with respect to its stock. However, it is possible that the issuance may be treated as a distribution of equity with respect to its stock, as an “open transaction,” or as a “debt instrument” for U.S. federal income tax purposes, and such questions are inherently factual in nature. For more information regarding the U.S. federal income tax consequences of the CVRs, see the section entitled “Material U.S. Federal Income Tax Consequences of the Receipt of CVRs” beginning on page 180 of this information statement/prospectus.

If the Galera merger and the Obsidian merger, taken together, do not qualify as a transaction described in Section 351 of the Code (or, in the case of the Galera stockholders, if the Galera merger, by itself, does not qualify as a reorganization within the meaning of Section 368(a) of the Code), Galera stockholders may recognize substantial taxable gain as a result of the mergers, and may be required to pay substantial additional U.S. federal income taxes, in the taxable year in which the transactions occur.

The Galera merger and the Obsidian merger, taken together, are intended to qualify as a transaction described in Section 351 of the Code. The Galera merger, by itself, is intended to qualify as a reorganization

 

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within the meaning of Section 368(a) of the Code. The positions of Galera and Obsidian are not binding on the IRS or the courts, and the parties do not intend to request a ruling from the IRS with respect to the transactions described in the merger agreement. Accordingly, there can be no assurance that the IRS will not challenge the qualification of the Galera merger and the Obsidian merger taken together, as a transaction described in Section 351 of the Code or that a court will not sustain such a challenge. If the IRS were to be successful in any such contention, or if for any other reason the Galera merger and the Obsidian merger, taken together, were not treated as a transaction described in Section 351 of the Code (and if the Galera merger did not qualify as a reorganization within the meaning of Section 368(a) of the Code), then the Galera stockholders would not be entitled to defer any portion of the gain realized as a result of receiving shares of Parent common stock in the transactions and may be required to pay substantial additional U.S. federal income taxes with respect to the taxable year in which such transactions occur.

Risks Relating to Obsidian

Unless the context otherwise requires, references in this section to “we,” “us,” “our” and the “Company” refer to Obsidian.

Risks Related to Our Financial Condition, Need for Additional Capital and Manufacturing and Commercialization Efforts

We are a clinical-stage biopharmaceutical company and have incurred significant financial losses since our inception and anticipate that we will continue to incur significant financial losses for the foreseeable future. We may never achieve or maintain profitability.

We are a clinical-stage biopharmaceutical company with a limited operating history and have incurred losses since our inception. We were formed in September 2015, and our operations to date have been limited to pre-commercial activities. We have not yet demonstrated an ability to generate revenue, obtain regulatory approvals, manufacture any product on a commercial scale or arrange for a third party to do so on our behalf, or conduct sales and marketing activities necessary for successful product commercialization. We will encounter risks and difficulties frequently experienced by clinical-stage biopharmaceutical companies in rapidly evolving fields, and we have not yet demonstrated an ability to successfully overcome such risks and difficulties. If we do not address these risks and difficulties successfully, our business will suffer.

We have no products approved for commercial sale and have not generated any revenue from product sales to date. We will continue to incur significant research and development and other expenses related to our preclinical and clinical development and ongoing operations. As a result, we are not profitable and have incurred losses in each period since our inception. Net losses and negative cash flows have had, and will continue to have, an adverse effect on our stockholders’ equity and working capital. Our net losses totaled $100.6 million and $83.1 million for the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025, we have not yet generated revenues. We expect to continue to incur significant losses for the foreseeable future, and we expect these losses to increase as we continue our research and development of, and seek regulatory approvals for, our product candidate.

We anticipate that our expenses will increase substantially if, and as, we:

 

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continue to advance our product candidate through clinical development, including conducting our ongoing clinical trials;

 

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seek regulatory approvals for our product candidate or any future product candidates that successfully complete clinical trials;

 

•

expand our operational, financial and management systems and increase personnel, including personnel to support our clinical and preclinical development, manufacturing and commercialization efforts;

 

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undertake any pre-commercial or commercial activities to establish sales, marketing, and distribution capabilities;

 

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advance any future product candidates into clinical development;

 

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seek to identify, acquire, and develop additional product candidates, including through business development efforts to invest in or in-license other technologies or product candidates;

 

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maintain, expand, and protect our intellectual property portfolio;

 

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make milestone, royalty, or other payments due under our license and collaboration agreements and any future license, collaboration or other agreements;

 

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make milestone, royalty, interest, or other payments due under any future financing or other arrangements with third parties;

 

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incur additional legal, accounting or other expenses in operating our business, including the additional costs associated with operating as a public company;

 

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establish sales, marketing, distribution, manufacturing, supply chain and other commercial infrastructure in the future to commercialize any product candidates for which we may obtain regulatory approval; and

 

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add equipment and physical infrastructure to support our research and development.

Biopharmaceutical product development entails substantial up-front capital expenditures and significant risk that any potential product candidate will fail to demonstrate adequate efficacy or an acceptable safety profile, gain regulatory approval, secure market access and reimbursement, or become commercially viable, and therefore any investment in us is highly speculative. Accordingly, before making an investment in us, you should consider our prospects, factoring in the costs, uncertainties, delays, and difficulties frequently encountered by companies in clinical development, especially clinical-stage biopharmaceutical companies such as ours. Any predictions you make about our future success or viability may not be as accurate as they would otherwise be if we had a longer operating history or a history of successfully developing and commercializing biopharmaceutical products. We may encounter unforeseen expenses, difficulties, complications, delays, and other known or unknown factors in achieving our business objectives.

Additionally, our expenses could increase beyond our expectations if we are required by the FDA, the European Medicines Agency (the “EMA”), or other comparable regulatory authorities to perform clinical trials in addition to those that we currently expect, or if there are any delays in establishing appropriate manufacturing arrangements for or in completing our clinical trials or the development of our product candidate or any future product candidates.

There is substantial doubt regarding our ability to continue as a going concern.

In its report on our consolidated financial statements for the year ended December 31, 2025, our independent registered public accounting firm included an explanatory paragraph that expressed substantial doubt about our ability to continue as a going concern. Our current cash level and current operating plans raise substantial doubt about our ability to continue as a going concern. In addition, our future consolidated financial statements may include similar qualifications about our ability to continue as a going concern. Our consolidated financial statements were prepared assuming that we will continue as a going concern and do not include any adjustments that may result from the outcome of this uncertainty. If we are unable to meet our current operating costs, we will need to seek additional financing or modify or cease our operational plans. If we seek additional financing to fund our business activities in the future and there remains substantial doubt about our ability to continue as a going concern, investors or other financing sources may be unwilling to provide additional funding to us on commercially reasonable terms or at all.

 

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Even if the mergers and concurrent financing are successful, we will require additional funding in order to finance operations. If we are unable to raise capital when needed, or on acceptable terms, we could be forced to delay, reduce, or eliminate our product development programs or commercialization efforts.

Developing biopharmaceutical products, including conducting preclinical studies and clinical trials, is a very time-consuming, expensive, and uncertain process that takes years to complete. We expect our expenses to continue to increase in connection with our ongoing activities, particularly as we conduct clinical trials of, and seek regulatory and marketing approval for, our product candidate. Even if our current or future product candidates are approved for commercial sale, we anticipate incurring significant costs associated with commercializing any approved product candidate. To date, we have funded our operations principally through private financings. We expect our expenses to increase in connection with our ongoing activities, particularly as we continue the clinical and preclinical development of our product candidate, commence additional preclinical studies and clinical trials, and continue to identify and develop additional product candidates either through internal development or through acquisitions or in-licensing product candidates.

As of December 31, 2025, we had $80.5 million of cash, cash equivalents, and marketable securities. Based upon our current operating plan, we believe that our existing cash, cash equivalents, and marketable securities, together with the estimated net proceeds from the mergers and concurrent financing, will enable us to fund our operating expenses and capital expenditure requirements into the third quarter of 2026. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect. We may also raise additional financing on an opportunistic basis in the future. For example, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. Attempting to secure additional financing may divert our management from our day-to-day activities, which may adversely affect our ability to develop our product candidate. Our future capital requirements will depend on many factors, including but not limited to:

 

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the scope, timing, progress, costs, and results of discovery, preclinical development, and clinical trials for our current or future product candidates;

 

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the number of clinical trials required for regulatory approval of our current or future product candidates;

 

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the costs, timing, and outcome of regulatory review of our current or any future product candidates;

 

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the costs associated with acquiring or licensing additional product candidates, technologies, or assets, including the timing and amount of any milestones, royalties, or other payments due in connection with our acquisitions and licenses;

 

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the cost of manufacturing clinical and commercial supplies of our current or future product candidates;

 

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the costs and timing of preparing, filing, and prosecuting patent applications, maintaining and enforcing our intellectual property rights, and defending any intellectual property-related claims, including any claims by third parties that we are infringing upon their intellectual property rights;

 

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the effectiveness of our approach at identifying target patient populations and utilizing our approach to enrich our patient population in our clinical trials;

 

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our ability to maintain existing, and establish new, strategic collaborations or other arrangements and the financial terms of any such agreements, including the timing and amount of any future milestone, royalty, or other payments due under any such agreement;

 

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the costs and timing of future commercialization activities, including manufacturing, marketing, sales, and distribution, for our product candidate or any future product candidates for which we receive marketing approval;

 

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the revenue, if any, received from commercial sales of our product candidate or any future product candidates for which we receive marketing approval;

 

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expenses to attract, hire, and retain skilled personnel;

 

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the costs of operating as a public company;

 

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our ability to establish a commercially viable pricing structure and obtain approval for coverage and adequate reimbursement from third-party and government payors;

 

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the effect of macroeconomic trends including inflation, tariffs, and interest rates;

 

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addressing any potential supply chain interruptions or delays;

 

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the effect of competing technological and market developments; and

 

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the extent to which we acquire or invest in business, products, and technologies.

Because of the numerous risks and uncertainties associated with research and development of product candidates, we are unable to predict the timing or amount of our working capital requirements. In addition, if we obtain regulatory approval for our product candidate, we expect to incur significant commercialization expenses related to product manufacturing, marketing, sales, and distribution which make it difficult to predict when or if we will be able to achieve or maintain profitability. Furthermore, upon the completion of the mergers and concurrent financing, we expect to incur additional costs associated with operating as a public company. Accordingly, we will need to obtain substantial additional funding in order to support our continuing operations. Our ability to raise additional funds will depend on financial, economic, political, and market conditions and other factors, over which we may have no or limited control. Additional funds may not be available when we need them, on terms that are acceptable to us, or at all. If we fail to obtain necessary capital when needed on acceptable terms, or at all, it could force us to delay, limit, reduce, or terminate our product development programs, future commercialization efforts, or other operations.

Raising additional capital may cause dilution to our stockholders, restrict our operations, or require us to relinquish rights to our product candidate.

Until such time, if ever, as we can generate substantial product revenue, we expect to finance our operations with our existing cash, cash equivalents, and marketable securities, the net proceeds from the mergers and concurrent financing, any future equity or debt financings, and upfront and milestone and royalties payments, if any, received under any future licenses or collaborations. If we raise additional capital through the sale of equity or convertible debt securities, or issue any equity or convertible debt securities in connection with a collaboration agreement or other contractual arrangement, your ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a holder of our common stock. In addition, the possibility of such issuance may cause the market price of our common stock to decline. Debt financing, if available, may result in increased fixed payment obligations and involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, declaring dividends, or acquiring, selling, or licensing intellectual property rights or assets, which could adversely impact our ability to conduct our business. If we raise additional funds through collaborations, strategic alliances, or marketing, distribution, or licensing arrangements with third parties, we may have to relinquish valuable rights to our intellectual property, technologies, future revenue streams, or product candidates or grant licenses on terms that may not be favorable to us. We could also be required to seek funds through arrangements with collaborators or others at an earlier stage than otherwise would be desirable. Any of these occurrences may have a material adverse effect on our business, operating results and prospects.

We maintain the majority of our cash and cash equivalents in accounts with major U.S. and multi-national financial institutions, and our deposits at certain of these institutions exceed insured limits. Market conditions and changes in financial regulations and policies can impact the viability of these institutions. In the event of failure of any of the financial institutions where we maintain our cash and cash equivalents, there can be no assurance that we would be able to access uninsured funds in a timely manner or at all. Any inability to access or delay in accessing these funds could adversely affect our business and financial position. In addition, changes in

 

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regulations governing financial institutions are beyond our control and difficult to predict; consequently, the impact of such changes on our business and results of operations is difficult to predict and may have an adverse effect on us.

Risks Related to Our Business Operations and Industry

Our business is highly dependent on the success of our product candidate, OBX-115. If we are unable to successfully complete clinical development, obtain regulatory approval for or commercialize our product candidate, or if we experience delays in doing so, our business will be materially harmed.

To date, as an organization, we have not completed the development of any product candidates and our current product candidate remains in clinical development. Our future success and ability to generate revenue from our product candidate is dependent on our ability to successfully develop, obtain regulatory approval for, and commercialize our product candidate or any future product candidate. Our product candidate and any future product candidates will require substantial additional investment for clinical development, regulatory review, and approval in one or more jurisdictions. If our product candidate or any future product candidates encounter safety or efficacy problems, development delays or regulatory issues or other problems, our development plans and business would be materially harmed.

We may not have the financial resources to continue development of our product candidate if we experience any issues that delay or prevent regulatory approval of, or our ability to commercialize, our product candidate, including:

 

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our ability to demonstrate to the satisfaction of the FDA, EMA, or other comparable regulatory authorities that our product candidate is safe and effective for one or more intended uses;

 

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the sufficiency of our financial and other resources to complete the necessary clinical trials and preclinical studies;

 

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negative or inconclusive results from our clinical trials, preclinical studies, or the clinical trials of others for product candidates similar to ours, leading to a decision or requirement to conduct additional clinical trials or preclinical studies or abandon a program;

 

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product-related adverse events experienced by subjects in our clinical trials, including unexpected toxicity results, or by individuals using drugs or therapeutic biologics similar to our product candidate;

 

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delays in submitting an Investigational New Drug application (“IND”), or other regulatory submission to the FDA, EMA, or other comparable regulatory authorities, or delays or failure in obtaining the necessary approvals from regulators to commence a clinical trial or a suspension, termination, or hold, of a clinical trial once commenced, including any delays caused by prolonged government shutdowns, inadequate funding, loss of employees, changes in regulations, leadership, or policies by a new administration or other disruptions of regulatory authorities;

 

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conditions imposed by the FDA, the EMA, or other comparable regulatory authorities regarding the scope or design of our clinical trials;

 

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poor effectiveness of our product candidate during clinical trials;

 

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better than expected performance of control arms, such as placebo groups, which could lead to negative or inconclusive results from our clinical trials;

 

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delays in recruiting or enrolling subjects in our clinical trials;

 

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high drop-out rates of subjects from our clinical trials;

 

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inadequate supply or quality of our product candidate or other materials necessary for the conduct of our clinical trials;

 

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higher than anticipated clinical trial or manufacturing costs;

 

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unfavorable FDA, EMA, or other comparable regulatory authority inspections and review of our clinical trial sites;

 

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failure of our third-party contractors or investigators to comply with regulatory requirements or the clinical trial protocol or otherwise to meet their contractual obligations in a timely manner, or at all;

 

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delays and changes in regulatory requirements, policies, leadership, and guidelines, including the imposition of additional regulatory oversight around clinical testing generally or with respect to our investigational therapies in particular; or

 

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varying interpretations of data by the FDA, EMA, and other comparable regulatory authorities.

We face significant competition from other biotechnology and pharmaceutical companies, and our operating results will suffer if we fail to compete effectively.

The biotechnology industry is intensely competitive and subject to rapid and significant technological change. Our current or future product candidates may face competition from major pharmaceutical companies, specialty pharmaceutical companies, universities, and other research institutions and from products and therapies that currently exist or are being developed, some of which products and therapies we may not currently know about. Many of our competitors have significantly greater financial, manufacturing, marketing, product development, technical, and human resources than we do. Large pharmaceutical companies, in particular, have extensive experience in clinical testing, obtaining marketing approvals, recruiting patients, and manufacturing pharmaceutical products, and they may also have products that have been approved or are in late stages of development, and collaborative arrangements in our target markets with leading companies and research institutions. Established pharmaceutical companies may also invest heavily to accelerate discovery and development of novel cell therapies or to in-license novel cell therapies that could make the product candidates that we develop obsolete. Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of our competitors. As a result of all of these factors, our competitors may succeed in obtaining patent protection and/or FDA or other regulatory approval or discovering, developing, and commercializing products in our field before we do, which could result in our competitors establishing a strong market position before we are able to enter the market.

Our competitors may obtain FDA or other regulatory approval of their product candidates more rapidly than we may or may obtain patent protection or other intellectual property rights that limit our ability to develop or commercialize our product candidates or platform technologies. Our competitors may also develop cell therapies or other platform technologies that are more effective, more convenient, more widely used, or less costly than our product candidate or, in the case of drugs, have a better safety profile than our product candidate. These competitors may also be more successful than us in manufacturing and marketing their products and have significantly greater financial resources and expertise in research and development.

There are a large number of companies developing or marketing treatments for cancer, including many major pharmaceutical and biotechnology companies. We may compete with other cell therapy or immunotherapy companies such as Iovance Biotherapeutics Inc., AbelZeta Inc., Biosyngen Pte Ltd, GRIT Biotechnology Co., Ltd., Shanghai Juncell Therapeutics Co., Ltd., Immatics N.V., Immunocore Holdings plc, Intima Bioscience, Inc., KSQ Therapeutics, Inc., Marker Therapeutics, Inc., TILT Biotherapeutics Ltd, and others. In addition, numerous compounds are in clinical development for cancer treatment. Many of these companies are well-capitalized and have significant clinical experience.

Smaller and other early-stage companies may also prove to be significant competitors. These third parties compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our current and any future product candidates. In addition, the biopharmaceutical industry is characterized by rapid technological change. If we fail to stay at the forefront of technological change, we may be unable to compete effectively. Technological advances or products developed by our competitors may render our product candidates obsolete, less competitive, or not economical.

 

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Universities and public and private research institutions in the United States and Europe are also potential competitors. For example, a Phase 3 M14TIL clinical trial comparing TIL to standard ipilimumab in patients with metastatic melanoma is currently being conducted in Europe by the Netherlands Cancer Institute, the Copenhagen County Herlev University Hospital, and the University of Manchester. Results from the M14TIL clinical trial were presented at the European Society for Medical Oncology Congress in September 2022. In patients with advance melanoma, progression-free survival was significantly longer among those who received TIL cell therapy than among those who received ipilimumab. While these universities and public and private research institutions primarily have educational objectives, they may develop proprietary technologies that lead to other FDA approved therapies or that secure patent protection that we may need for the development of our technologies and products.

Our commercial opportunities could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient, have a broader label, are marketed more effectively, are reimbursed, or are less expensive than any products that we may develop. Even if our product candidates achieve marketing approval, they may be priced at a significant premium over competitive products if any, which have been approved by then, resulting in reduced competitiveness. If we do not compete successfully, we may not generate or derive sufficient revenue from any product candidate for which we obtain marketing approval and may not become and remain profitable.

Due to the significant resources required for the development of our pipeline, and depending on our ability to access capital, we must prioritize the development of certain product candidates over others. Moreover, we may fail to expend our limited resources on product candidates or indications that may be more profitable or for which there is a greater likelihood of success.

Our lead product candidate, OBX-115, is currently in Phase 2 clinical development for the treatment of advanced melanoma and is currently in Phase 1 clinical development for the treatment of non-small cell lung cancer (“NSCLC”), and our other product candidates and programs are at various stages of preclinical development. We seek to develop engineered TIL cell therapies for the treatment of patients with solid tumors.

Due to the significant resources required for the development of OBX-115, we must decide which product candidates and indications to pursue and advance and the amount of resources to allocate to each. Our decisions concerning the allocation of research, development, collaboration, management, and financial resources toward particular product candidates, therapeutic areas, or indications may not lead to the development of viable commercial products and may divert resources away from better opportunities. Similarly, our decisions to delay, terminate, or collaborate with third parties in respect of certain product development programs may also prove not to be optimal and could cause us to miss valuable opportunities. If we make incorrect determinations regarding the viability or market potential of our current or future product candidates or misread trends in the pharmaceutical industry, our business, financial condition, and results of operations could be materially and adversely affected. As a result, we may fail to capitalize on viable commercial products or profitable market opportunities, be required to forego or delay pursuit of opportunities with other product candidates or other diseases and disease pathways that may later prove to have greater commercial potential than those we choose to pursue, or relinquish valuable rights to such product candidates through collaboration, licensing, or royalty arrangements in cases in which it would have been advantageous for us to invest additional resources to retain sole development and commercialization rights.

We may seek to grow our business through acquisitions or investments in new or complementary businesses, products, or technologies, through the licensing of products or technologies from third parties or other strategic alliances. The failure to manage acquisitions, investments, licenses, or other strategic alliances, or the failure to integrate them with our existing business, could have a material adverse effect on our operating results, dilute our stockholders’ ownership, increase our debt, or cause us to incur significant expense.

Our success depends on our ability to continually enhance and broaden our product offerings in response to changing clinician and patients’ needs, competitive technologies, and market pressures. Accordingly, from time

 

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to time we may consider opportunities to acquire, make investments in, or license other technologies, products, and businesses that may enhance our capabilities, complement our existing products and technologies, or expand the breadth of our markets or customer base. Potential and completed acquisitions, strategic investments, licenses, and other alliances involve numerous risks, including difficulty integrating acquired or licensed technologies, products, employees, or business operations, unanticipated costs associated with acquisitions or strategic alliances, and diversion of management’s attention from our core business and disruption of ongoing operations.

We do not know if we will be able to identify acquisitions or strategic relationships we deem suitable, whether we will be able to successfully complete any such transactions on favorable terms, if at all. Our ability to successfully grow through strategic transactions depends upon our ability to identify, negotiate, complete, and integrate suitable target businesses, technologies, or products and to obtain any necessary financing. These efforts could be expensive and time-consuming and may disrupt our ongoing business and prevent management from focusing on our operations. To finance any acquisitions, investments, or strategic alliances, we may choose to issue shares of our common stock as consideration, which could dilute the ownership of our stockholders. Additional funds may not be available on terms that are favorable to us, or at all.

Our employees, independent contractors, consultants, including CDMOs and CROs, and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.

We are exposed to the risk of employee fraud or other illegal activity by our current and any future employees, independent contractors, consultants, CDMOs, and vendors including but not limited to CROs. Misconduct by these parties could include intentional, unintentional, reckless, and/or negligent conduct that fails to comply with FDA or other comparable regulations, provide true, complete and accurate information to the FDA and other comparable regulatory authorities, comply with manufacturing standards we may establish, comply with healthcare fraud and abuse laws and regulations, report financial information or data accurately, or disclose unauthorized activities to us. If we obtain FDA approval of our product candidate or any future product candidates and begin commercializing those products in the United States, our potential exposure under these laws will increase significantly, and our costs associated with compliance with these laws are likely to increase. 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. Additionally, we are subject to the risk that a person could allege such fraud or other misconduct, even if none occurred. 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 comply with such laws or regulations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a material and adverse effect on our business, financial condition, results of operations, and prospects.

We, our collaborators, and our service providers are subject to a variety of privacy and data security laws, regulations, and contractual obligations, which may require us to incur substantial compliance costs, and any failure or perceived failure by us to comply with them could expose us to significant fines and other penalties and otherwise harm our business and operations.

The legislative and regulatory framework for the collection, use, safeguarding, sharing, transfer, and other processing of personal information worldwide is rapidly evolving and is likely to remain uncertain for the foreseeable future. Globally, numerous jurisdictions, including those in which we operate or collect personal information, have established their own data security and privacy frameworks with which we must comply. In the United States, numerous federal and state laws and regulations, including federal health information privacy laws, state information security and data breach notification laws, state health information privacy laws, and federal and state consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act), that govern

 

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the collection, use, disclosure, and protection of health-related and other personal information, could apply to our operations or the operations of our collaborators and service providers. In particular, regulations promulgated pursuant to the Health Insurance Portability and Accountability Act (“HIPAA”), establish privacy and security standards that limit the use and disclosure of individually identifiable health information, or protected health information, and impose requirements regarding the privacy and security of individually identifiable health information, including mandatory contractual terms, for covered entities, or certain healthcare providers, health plans and healthcare clearinghouses, and their business associates that provide services to the covered entity that involve individually identifiable health information and their subcontractors that use, disclose or otherwise process individually identifiable health information. While pharmaceutical and biotechnology companies are typically not directly regulated by HIPAA, our business may be indirectly impacted by HIPAA in our interactions with providers, payors, and others that have HIPAA compliance obligations. If we are unable to properly protect the privacy and security of protected health information, we could be found to have violated these privacy and security laws and/or breached certain contracts. Further, if we fail to comply with applicable privacy laws, including applicable HIPAA privacy and security standards, we could face significant civil and criminal penalties. U.S. Department of Health & Human Services (“HHS”), enforcement activity can result in financial liability and reputational harm, and responses to such enforcement activity can consume significant internal resources.

At the state level, numerous states have or are in the process of enacting or considering comprehensive data privacy and security laws, rules, and regulations while other states have focused on more narrow aspects of privacy. Such proposed legislation, if enacted, may add additional complexity, variation in requirements, restrictions and potential legal risk, require additional investment of resources in compliance programs, impact strategies and the availability of previously useful data and could result in increased compliance costs and/or changes in business practices and policies. The existence of comprehensive privacy laws in different states in the country would make our compliance obligations more complex and costly and may increase the likelihood that we may be subject to enforcement actions or otherwise incur liability for noncompliance. In the state of Washington, for example, the My Health My Data Act, which has a private right of action that further increases the relevant compliance risk, requires regulated entities to obtain consent to collect health-related information and grants consumers certain rights, including to request deletion of their information. Connecticut and Nevada have also passed similar laws regulating consumer health data. In addition, other states have proposed and/or passed legislation that regulates the privacy and/or security of certain specific types of information. For example, a small number of states, such as Illinois and Texas, have passed laws that regulate biometric data specifically. Although many of the existing state privacy laws exempt clinical trial information and health information governed as “protected health information” by HIPAA, future privacy and data protection laws may be broader in scope. Taken together, these state and federal laws may be subject to varying interpretations by the courts and government agencies and are subject to frequent change. Further, these varying interpretations could create complex compliance issues for us and our partners and potentially expose us to additional expense, liability, penalties, negatively impact our business, and lead to adverse publicity, and all of these risks could adversely affect our business in the short and long term. In addition, contractual obligations and in the future, legislation may limit, forbid or regulate the use or transmission of health information outside of the United States or across other national borders, which could make reliance on non-U.S. resources for work related to such processing personal information impracticable or substantially more expensive.

All of these evolving compliance and operational requirements impose significant costs, such as costs related to organizational changes, implementing additional protection technologies, training employees and engaging consultants and legal advisors, which are likely to increase over time. In addition, such requirements may require us to modify our data processing practices and policies, utilize management’s time and/or divert resources from other initiatives and projects. Any failure or perceived failure by us to comply with any applicable federal, state or foreign laws and regulations relating to data privacy and security could result in damage to our reputation, as well as proceedings or litigation by governmental agencies or other third parties, including class action privacy litigation in certain jurisdictions, which would subject us to significant fines, sanctions, awards,

 

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injunctions, penalties or judgments. Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and prospects.

If we are unable to protect the confidentiality of our proprietary information, the value of our technology and products could be adversely affected.

In addition to patent protection, we also rely on other proprietary rights, including protection of trade secrets and/or confidential know-how, unpatented know-how, and/or other proprietary information. We may rely on other proprietary rights, including protection of trade secrets, confidential know-how, unpatented know-how, and/or other proprietary information to protect our technology, especially where patent protection is believed to be of limited value. However, trade secrets and/or confidential know-how can be difficult to maintain as confidential.

To maintain the confidentiality of this type of information, it is our policy to enter into confidentiality agreements with our employees, consultants, advisors, collaborators, contractors (including CDMOs and CROs) and others upon the commencement of their relationships with us. These agreements require that all confidential information developed by the individual(s) or made known to the individual by us during the course of the individual’s relationship or work with us be kept confidential and not disclosed to third parties. Our agreements with employees and our personnel policies also provide that any inventions conceived by the individual in the course of rendering services to us shall be our exclusive property. However, we may not obtain these agreements in all circumstances, and/or individuals with whom we have these agreements may not comply with their terms, intentionally or unintentionally. Thus, despite such agreements, inventions may become assigned to third parties. In the event of unauthorized use or disclosure of our trade secrets or proprietary information, these agreements, even if obtained, may not provide meaningful protection, particularly for our trade secrets or other confidential information. To the extent that our employees, consultants, contractors, or others use technology or know-how owned by third parties in their work for us, disputes may arise between us and those third parties as to the rights in related inventions. To the extent that an individual who is not obligated to assign rights in intellectual property to us or a current or future licensor is rightfully an inventor of intellectual property, we may need to obtain an assignment or a license to that intellectual property from that individual, or a third party, or from that individual’s assignee. Such assignment or license may not be available at all or on commercially reasonable terms. The disclosure of our trade secrets could impair our competitive position and may materially harm our business, financial condition, and results of operations.

Enforcing a claim that a third party illegally obtained our trade secrets and/or confidential know-how and is using these is expensive, time consuming, and unpredictable. The enforceability of confidentiality agreements and theft of trade secret claims may vary from jurisdiction to jurisdiction. Additionally, if the steps taken to maintain our trade secrets are deemed inadequate, we may have insufficient recourse against third parties for misappropriating the trade secret. As such, adequate remedies may not exist in the event of unauthorized use or disclosure of our proprietary information.

In addition, others may independently discover or develop our trade secrets and proprietary information, and the existence of our own trade secrets afford no protection against such independent discovery. Such persons may even apply for patent protection in respect of the same. If successful in obtaining such patent protection, such persons could limit our use of our trade secrets and/or confidential know-how. Under certain circumstances and to guarantee our freedom to operate, we may also decide to publish some know-how to prevent others from obtaining patent rights covering such know-how.

Risks Related to the Discovery and Development of Our Current or Future Product Candidates

Our business is dependent on our ability to advance our current and future product candidates through clinical trials, obtain marketing approval, and ultimately commercialize them.

Our ability to generate product revenues, which we do not expect will occur for several years, if ever, will depend heavily on the successful development and eventual regulatory approval and commercialization of our

 

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current product candidate or future product candidates we develop, which may never occur. Our current product candidate and any future product candidates we develop will require significant preclinical or clinical development, management of clinical, preclinical, and manufacturing activities, efforts toward obtaining marketing approval in the United States and other jurisdictions, and if approved, demonstration of effectiveness to pricing and reimbursement authorities, sufficient manufacturing supply for both preclinical and clinical development and, if approved, for commercial production, as well as investments to build a commercial organization, and substantial investment and significant marketing efforts before we generate any revenues from product sales.

The clinical and commercial success of our current and future product candidates will depend on several factors, including the following:

 

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timely and successful completion of our preclinical studies and clinical trials;

 

•

sufficiency of our financial and other resources to complete the necessary preclinical studies and clinical trials;

 

•

our plans to successfully submit amendments to existing INDs or new INDs with the FDA for our current and future product candidates;

 

•

our ability to complete preclinical studies for current or future product candidates;

 

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successful enrollment of subjects in, and completion of clinical trials;

 

•

successful data from our clinical program that supports an acceptable risk-benefit profile of our product candidate in the intended patient populations;

 

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our ability to establish and maintain agreements with third-party manufacturers on a timely and cost-efficient manner;

 

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whether we are required by the FDA or comparable foreign regulatory authorities to conduct additional clinical trials or other studies beyond those planned or anticipated to support approval of our lead product candidate OBX-115;

 

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acceptance of our proposed indications and the primary endpoint assessments evaluated in the clinical trials of our product candidate by the FDA and comparable foreign regulatory authorities;

 

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timely receipt and maintenance of marketing approvals from applicable regulatory authorities;

 

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successfully launching commercial distribution and sales of our product candidate, if approved;

 

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the prevalence, duration, and severity of potential side effects or other safety issues experienced with our product candidate, if approved;

 

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entry into collaborations to further the development of our product candidate;

 

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obtaining and maintaining patent and trade secret protection or regulatory exclusivity for our product candidate;

 

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acceptance of the benefits and uses of our product candidate, if approved, by patients, the medical community, and third-party payors;

 

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maintaining an acceptable safety, tolerability, and efficacy profile of the product candidates following approval;

 

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our compliance with any post-approval requirements imposed on our products, such as post-marketing studies, a REMS, or additional requirements that might limit the promotion, advertising, distribution, or sales of our products or make the products cost prohibitive;

 

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competing effectively with other therapies;

 

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obtaining and maintaining healthcare coverage and adequate reimbursement from third-party payors; and

 

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enforcing and defending intellectual property rights and claims.

These factors, many of which are beyond our control, could cause us to fall behind our competitors, experience significant delays or an inability to obtain regulatory approvals or commercialize our current or future product candidates, and could otherwise materially harm our business. Successful completion of preclinical studies and clinical trials does not mean that any other current or future product candidates we develop will receive regulatory approval. Even if regulatory approvals are obtained, we could experience significant delays or an inability to successfully commercialize our current and any future product candidates we develop, which would materially harm our business. If we are not able to generate sufficient revenue through the sale of any current or future product candidate, we may not be able to continue our business operations or achieve profitability.

Clinical development involves a lengthy and expensive process with uncertain outcomes. We may incur additional costs and experience delays in developing and commercializing or be unable to develop or commercialize our current and future product candidates.

To obtain the requisite regulatory approvals to commercialize our product candidates or any future product candidates, we must demonstrate through data from extensive preclinical studies and clinical trials that our product candidate and any future product candidates are safe, pure, and potent in humans. Clinical trials are expensive and can take many years to complete, with a highly uncertain outcome. Failure can occur at any time during the clinical trial process and our current or future clinical trial results may not be successful. We may experience delays in completing our clinical trials or preclinical studies and initiating or completing additional clinical trials. We cannot be certain the ongoing and planned preclinical studies or clinical trials for our current or any other future product candidates will begin on time, not require redesign, enroll an adequate number of eligible subjects on time, or be completed on schedule, if at all. We may also experience numerous unforeseen events during our clinical trials that could delay or prevent our ability to receive marketing approval or commercialize the product candidates we develop, including:

 

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results from preclinical studies or clinical trials may not be predictive of results from later clinical trials of any product candidate;

 

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the FDA or other regulatory authorities, Institutional Review Boards (“IRBs”), or independent ethics committees may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site;

 

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the FDA or other regulatory authorities may require us to submit additional data such as long-term toxicology studies, or impose other requirements on us, before permitting us to initiate a clinical trial;

 

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we may experience delays in reaching, or fail to reach, agreement on acceptable terms with prospective trial sites and prospective CROs, as the terms of these agreements can be subject to extensive negotiation and vary significantly among different CROs and trial sites;

 

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clinical trials of any product candidate may fail to show safety, purity or potency, or may produce negative or inconclusive results, which may cause us to decide, or regulators to require us, to conduct additional nonclinical studies or clinical trials or which may cause us to decide to abandon product candidate development programs;

 

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the number of patients required for clinical trials may be larger than we anticipate, or we may have difficulty in recruiting and enrolling patients to participate in clinical trials, including as a result of the size and nature of the patient population, the proximity of patients to clinical trial sites, eligibility criteria for the clinical trial, the nature of the clinical trial protocol, the availability of approved effective treatments for the relevant disease and competition from other clinical trial programs for similar indications and clinical trial subjects;

 

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enrollment in these clinical trials may be slower than we anticipate or participants may drop out of these clinical trials or may fail to return for post-treatment follow-up at a higher rate than we anticipate;

 

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our CROs and other third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all, or may deviate from the clinical trial protocol or drop out of the trial, which may require that we add new clinical trial sites or investigators;

 

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we may elect to, or regulators, IRBs, or ethics committees may require, that we or our investigators, suspend or terminate clinical research or trials for various reasons, including noncompliance with regulatory requirements or a finding that participants are being exposed to unacceptable health risks;

 

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our product candidates could cause undesirable side effects that could result in significant negative consequences, including the inability to enter clinical development or receive regulatory approval;

 

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the cost of preclinical or nonclinical testing and studies and clinical trials of any product candidates may be greater than we anticipate;

 

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we may face hurdles in addressing subject safety concerns that arise during the course of a trial, causing us or our investigators, regulators, IRBs or ethics committees to suspend or terminate trials, or reports may arise from nonclinical or clinical testing of other cancer therapies that raise safety or efficacy concerns about our product candidates;

 

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the supply, quality, or timeliness of delivery of materials for product candidates we develop or other materials necessary to conduct clinical trials may be insufficient or inadequate; and

 

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we may need to change the manufacturing site and potentially the CDMO for our product candidates from those that are able to produce clinical supply for our clinical trials to those with the capacity and ability to perform commercial manufacturing and/or the production of clinical material for our later stage clinical trials.

We could encounter delays if a clinical trial is suspended or terminated by us, or by the IRBs of the institutions in which such trials are being conducted, ethics committees, or the Safety Review Committee (“SRC”), the DSMB, for such trial or by the FDA, the EMA, or other regulatory authorities. Such authorities may impose a suspension or termination due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA, the EMA, or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a product candidate, changes in governmental regulations or administrative actions, or lack of adequate funding to continue the clinical trial. Many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of marketing approval of our product candidate. The FDA, the EMA, or other regulatory authorities may change the expectations for approval even after they have reviewed and commented on the design for our clinical trials. Further, the FDA, the EMA, or other regulatory authorities may disagree with our clinical trial design or our interpretation of data from clinical trials. For example, we are conducting and may in the future continue to conduct “open-label” clinical trials. An “open-label” clinical trial is one where both the patient and investigator know whether the patient is receiving the investigational product candidate or either an existing approved drug or placebo. Most typically, open-label clinical trials test only the investigational product candidate and sometimes may do so at different dose levels. Open-label clinical trials are subject to various limitations that may exaggerate any therapeutic effect because patients may be subject to a “patient bias” where they perceive their symptoms to have improved merely due to their awareness of receiving an experimental treatment. Moreover, patients selected for early clinical trials often include the most severe sufferers and their symptoms may have been bound to improve notwithstanding the new treatment. In addition, open-label clinical trials may be subject to an “investigator bias” where those assessing and reviewing the physiological outcomes of the clinical trials are aware of which patients have received treatment and may interpret the information of the treated group more favorably given this knowledge.

 

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Principal investigators for our clinical trials may serve as scientific advisors or consultants to us from time to time and may receive cash or equity compensation in connection with such services. If these relationships and any related compensation result in perceived or actual conflicts of interest, or a regulatory authority concludes that the financial relationship may have affected the interpretation of the trial results, the integrity of the data generated at the applicable clinical trial site may be questioned and the utility of the clinical trial itself may be jeopardized, which could result in the delay or rejection of any future marketing application we submit. Any such delay or rejection could prevent or delay us from commercializing our current or future product candidates.

If we experience delays in the completion, or termination, of any clinical trial of our lead product candidate OBX-115, the commercial prospects of our product candidate will be harmed and our ability to generate product revenues from our product candidate will be delayed. In addition, any delays in completing our clinical trials will increase our costs, slow down the development and approval process for our product candidate, and jeopardize our ability to commence product sales and generate revenues. Significant clinical trial delays could also allow our competitors to bring products to market before we do or shorten any periods during which we have the exclusive right to commercialize our product candidate.

Any such events would impair our ability to successfully commercialize our product candidate and may harm our business and results of operations. Any of these occurrences may significantly harm our business, financial condition, and prospects. In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of our product candidate or result in the development of our product candidate stopping early.

Preclinical development is uncertain. Any preclinical programs we pursue may experience delays or may never advance to clinical trials, which would adversely affect our ability to obtain regulatory approvals or commercialize these programs on a timely basis or at all.

The risk of failure for product candidates still in the discovery or preclinical stage is high. In addition, any one or more of our product candidates that have not yet entered the clinic may never advance into clinical development. In order to obtain FDA approval to market a new biologic we must demonstrate proof of safety, purity, and potency, including efficacy, in humans. To meet these requirements, we will have to conduct adequate and well-controlled clinical trials. Before we can commence clinical trials for a product candidate, we must complete extensive preclinical testing and studies that support our planned clinical trials in humans. We cannot be certain of the timely completion or outcome of our preclinical testing and studies and cannot predict if the FDA will accept our proposed clinical programs or if the outcome of our preclinical testing and studies will ultimately support the further development of our current or future product candidates. As a result, we cannot be sure that we will be able to submit INDs or similar applications for our preclinical candidates on the timelines we expect, if at all, and we cannot be sure that submission of INDs or similar applications will result in the FDA, the EMA, or other regulatory authorities allowing clinical trials to begin.

Conducting preclinical testing is a lengthy, time-consuming, and expensive process. The length of time of such testing may vary substantially according to the type, complexity, and novelty of the program, and often can be several years or more per program. The commencement and rate of completion of preclinical studies and clinical trials for a product candidate may be delayed by many factors, including but not limited to:

 

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failure of animal studies to generate compelling toxicity data;

 

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failure of new non-animal methods for preclinical work to be accepted by regulators; and

 

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delays or failures by third party CROs conducting the nonclinical studies on our behalf.

Delays associated with programs for which we are conducting preclinical testing and studies may cause us to incur additional operating expenses.

 

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We may in the future conduct clinical trials for current or future product candidates outside the United States, and the FDA and comparable foreign regulatory authorities may not accept data from such trials.

We may in the future conduct clinical trials for current or future product candidates outside the United States, and the FDA and comparable foreign regulatory authorities may not accept data from such trials. We are currently conducting clinical trials in the United States. The acceptance of data from clinical trials conducted outside the United States or another jurisdiction by the FDA or comparable foreign regulatory authority may be subject to certain conditions or may not be accepted at all. In cases where data from foreign clinical trials are intended to serve as the basis for marketing approval in the United States, the FDA will generally not approve the application on the basis of foreign data alone unless (i) the data are applicable to the U.S. population and U.S. medical practice, (ii) the trials were performed by clinical investigators of recognized competence and pursuant to good clinical practice, or GCP, regulations and (iii) the FDA is able to validate the data through an on-site inspection or other appropriate means. Additionally, the FDA’s clinical trial requirements, including sufficient size of patient populations and statistical powering, must be met. Many foreign regulatory authorities have similar approval requirements. In addition, foreign clinical trials are subject to the applicable local laws of the foreign jurisdictions where such trials are conducted. There can be no assurance that the FDA or any comparable foreign regulatory authority will accept data from trials conducted outside of the United States or the applicable jurisdiction. If the FDA or any comparable foreign regulatory authority does not accept such data, it would result in the need for additional trials, which could be costly and time-consuming, and which may result in current or future product candidates that we may develop being delayed or not receiving approval for commercialization in the applicable jurisdiction.

Positive results from preclinical studies and early-stage clinical trials may not be predictive of future results. Initial positive results in any of our clinical trials may not be indicative of results obtained when the trial is completed or in later stage trials.

The results of preclinical studies may not be predictive of the results of clinical trials. Preclinical studies and early-stage clinical trials are primarily designed to (i) test safety, (ii) study pharmacokinetics and pharmacodynamics, and (iii) understand the side effects of product candidates at various doses and schedules, and the results of any early-stage clinical trials may not be predictive of the results of later-stage, large-scale efficacy clinical trials. In addition, initial success in clinical trials may not be indicative of results obtained when such trials are completed. There can be no assurance that any of our current or future clinical trials will ultimately be successful or support further clinical development our product candidates. There is a high failure rate for drugs and biological products proceeding through clinical trials. A number of companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in clinical development even after achieving promising results in earlier studies, and any such setbacks in our clinical development could have a material adverse effect on our business and operating results.

Even if our clinical trials are completed, the results may not be sufficient to obtain regulatory approval for our product candidates. Data obtained from preclinical and clinical activities are subject to varying interpretations, which may delay, limit, or prevent regulatory approval. In addition, the results of our preclinical studies may not be predictive of the results of outcomes in human clinical trials. For example, our current or future product candidates may demonstrate different chemical, biological, and pharmacological properties in patients than they do in laboratory studies or may interact with human biological systems in unforeseen or harmful ways. Product candidates in later stages of clinical trials may fail to show desired pharmacological properties or produce the necessary safety and efficacy results despite having progressed through preclinical studies and initial clinical trials. In addition, we may experience regulatory delays or rejections as a result of many factors, including changes in regulatory policy during the period of our product candidate development. Any such delays could negatively impact our business, financial condition, results of operations, and prospects.

 

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

From time to time, we may publish interim data, including interim, top-line, or preliminary data from our preclinical studies and clinical trials. Any interim data and results from our preclinical studies and clinical trials 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. We also may make assumptions, estimations, calculations and conclusions as part of our analyses of preliminary or topline data and we may not have received or had the opportunity to fully and carefully evaluate all data. Preliminary or top-line results also remain subject to audit, validation, and verification procedures that may result in the final data being materially different from the interim and preliminary data we previously published. As a result, interim and preliminary data may not be predictive of final results and should be viewed with caution until the final data are available. Material differences between preliminary or interim data and final data could significantly harm our business prospects and may cause the trading price of our common stock to fluctuate significantly.

Furthermore, third parties, including regulatory authorities, 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 delay or prevent regulatory approval of, or limit commercial prospects for, the particular product candidate. 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 to disclose. If regulatory authorities disagree with the conclusions reached, our ability to obtain approval for, and commercialize, our product candidates may be harmed, which could harm our business, financial condition, results of operations and prospects.

Our current or future product candidates may cause undesirable, unacceptable, or serious adverse side effects or have other properties when used alone or in combination with other approved products or investigational new drugs that could halt their clinical development, delay or prevent their regulatory approval, limit their commercial potential, or result in significant negative consequences.

Before obtaining regulatory approvals for the commercial sale of our product candidate, we must demonstrate through lengthy, complex, and expensive preclinical testing and clinical trials that our product candidate are safe, pure, and potent for use in each target indication, and failures can occur at any stage of testing. As with most biological products, use of our current or future product candidates could be associated with side effects or adverse events which can vary in severity from minor reactions to death and in frequency from infrequent to prevalent. There have been serious adverse side effects reported in response to engineered TIL cell therapies in oncology.

Immuno-oncology drugs have been observed to cause side effects, generally related to over activation of the immune system. These include colitis, diabetes, pituitary inflammation, thyroiditis, myocarditis, liver inflammation, thrombocytopenia, pneumonitis, hypoxia, cytokine release syndrome, late autoimmune side effects/autoimmune disease states, and risk of death, among others. Our immuno-oncology product candidates, and combination drug regimens may have similar or additional side effects including late autoimmune side effects, autoimmune disease states or secondary malignancies. Treatment-related side effects may emerge at a later time in our trials. In addition to any potential side effects caused by the product candidate or combination regimen, the administration process or related procedures also can cause adverse side effects. If unacceptable adverse events occur, our clinical trials could be suspended or terminated, or any future marketing authorization could be suspended, revoked, or varied. Additionally, we may be required to repeat or conduct additional clinical trials or nonclinical studies for our product candidate beyond those that we currently contemplate. There can be no assurance that any of our current or future product candidates will not demonstrate unacceptable toxicities in later testing that may render them unsafe or intolerable.

 

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If unacceptable side effects arise in the development of our product candidates, we, the FDA, the IRBs at the institutions in which our trials are conducted or the DSMB or SRC could suspend or terminate our clinical trials or the FDA or comparable foreign regulatory authorities could order us to cease clinical trials or deny approval of our product candidates for any or all targeted indications. Treatment-related side effects could also affect patient recruitment or the ability of enrolled patients to complete any of our clinical trials or result in potential product liability claims. In addition, these side effects may not be appropriately recognized or managed by the treating medical staff. We expect to have to train medical personnel using our product candidates to understand the side effect profiles for our clinical trials and upon any commercialization of any of our product candidates and train them in the tumor procurement surgical and core needle biopsy processes. There are additional risks of complications from tumor tissue procurement, including surgical complications and core needle biopsy complications, including the risk of death Inadequate training in recognizing or managing the potential side effects of our product candidates could result in patient injury or death. Any of these occurrences may harm our business, financial condition, and prospects significantly.

Although our current and future product candidates have undergone and will undergo safety testing to the extent possible and, where applicable, under such conditions discussed with regulatory authorities, not all adverse effects of drugs can be predicted or anticipated. Engineered TIL cell therapeutics and their method of action of harnessing the body’s immune system are powerful and could lead to serious side effects that we only discover in clinical trials or during commercial marketing. Unforeseen side effects could arise either during clinical development or after a product candidate has been approved by regulatory authorities and the approved product has been marketed, following the exposure of additional patients. So far, we have not demonstrated that our current product candidate is safe in humans, and we cannot predict if ongoing or future clinical trials will do so. If any of our current or future product candidates fail to demonstrate safety and efficacy in clinical trials or do not gain marketing approval, we will not be able to generate revenue and our business will be harmed.

In addition, we intend to pursue our product candidate in combination with other therapies and may develop future product candidates in combination with other therapies, which exposes us to additional risks relating to undesirable side effects or other properties. For example, the other therapies may lead to toxicities that are improperly attributed to our product candidate or the combination of our product candidate with other therapies may result in toxicities that the product candidate or other therapy does not produce when used alone. The other therapies we are using in combination may be removed from the market, or we may not be able to secure adequate quantities of such materials for which we have no guaranteed supply contract, and thus such therapies may be unavailable for testing or commercial use with any of our approved products. The other therapies we may use in combination with our product candidate may also be supplanted in the market by newer, safer, or more efficacious products or combinations of products.

Even if we successfully advance our lead product candidate OBX-115 or any future product candidates through clinical trials, such trials will likely only include a limited number of subjects and limited duration of exposure to the candidate. As a result, we cannot be assured that adverse effects of our product candidates will not be uncovered when a significantly larger number of patients are exposed to the product candidate. Further, any clinical trial may not be sufficient to determine the effect and safety consequences of taking a particular candidate over a multi-year period.

 

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Even if we successfully develop a product candidate and it receives marketing approval, the FDA could require us to adopt a REMS to ensure that the benefits of treatment outweigh the risks for each potential patient, which may include, among other things, a medication guide outlining the risks of the product for distribution to patients, a communication plan to health care practitioners, extensive patient monitoring, or distribution systems and processes that are highly controlled, restrictive, and more costly than what is typical for the industry. If our current product candidate or any of our future product candidates receives marketing approval, and we or others later identify undesirable side effects caused by such products, a number of potentially significant negative consequences could result in the following, including but not limited to:

 

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regulatory authorities may limit, suspend, or withdraw their approval of the product or may refuse to approve supplemental applications for such product; regulatory authorities may refuse to approve pending applications or supplements to approved applications we file;

 

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we may be required to recall a product or change the way such product is administered to patients;

 

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additional restrictions may be imposed on the marketing of the particular product or the manufacturing processes for the product or any component thereof;

 

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regulatory authorities may require the addition of labeling statements, such as a “boxed” warning or a contraindication;

 

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we may be required to implement a REMS or create a medication guide outlining the risks of such side effects for distribution to patients;

 

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we could be sued and held liable for harm caused to patients;

 

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the product may become less competitive; and

 

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our reputation may suffer.

Any of the foregoing events could prevent us from achieving or maintaining market acceptance of the particular product candidate, if approved, and result in the loss of significant revenues, which would materially harm our business. In addition, if our product candidates or our engineered TIL cell therapeutic development approach generally proves to be unsafe, our entire technology platform and pipeline could be affected, which would also materially harm our business.

If we or our collaborators encounter difficulties enrolling eligible patients in our clinical trials, our clinical development activities could be delayed or otherwise be adversely affected.

The successful and timely completion of clinical trials in accordance with their protocols depends on, among other things, our ability to recruit and enroll a sufficient number of eligible patients who remain in the trial until the trial’s conclusion, including any follow-up period. We may experience difficulties in patient enrollment in our clinical trials for a variety of reasons. The enrollment of patients depends on many factors, including:

 

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the patient eligibility criteria defined in the protocol;

 

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the nature and size of the patient population required for analysis of the trial’s primary endpoints and the process for identifying patients;

 

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the number and location of participating and available clinical sites or patients;

 

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delays in the ability or failure to add new clinical trial sites;

 

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the design of the trial;

 

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our ability to recruit qualified clinical trial investigators with the appropriate competencies and experience;

 

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clinicians’ and patients’ perceptions as to the potential advantages and risks of the product candidate being studied in relation to other available therapies, including any new products that may be approved for the indications we are investigating;

 

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the availability of competing commercially available therapies;

 

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our ability to obtain and maintain patient informed consents for participation in our clinical trials; and

 

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the risk that patients enrolled in clinical trials will drop out of the trials before completion or, because they may be late-stage cancer patients, will not survive the full terms of the clinical trials.

In addition, our clinical trials will compete with other clinical trials for product candidates that are in the same therapeutic areas as our current and potential future product candidates. It is also likely that we may compete with competitors developing product candidates in the same therapeutic areas for clinical trial sites. This competition will reduce the number and types of patients available to us, because some patients who might have opted to enroll in our trials may instead opt to enroll in a trial conducted by one of our competitors. Since the number of qualified clinical investigators is limited, we expect to conduct some of our clinical trials at the same clinical trial sites that some of our competitors use, which will reduce the number of patients who are available for our clinical trials at such sites. Moreover, because our current and potential future product candidates may represent a departure from more commonly used methods for cancer treatment, potential patients and their doctors may be inclined to use conventional therapies, such as chemotherapy, rather than enroll in our ongoing or any future clinical trial.

Delays or difficulties in patient enrollment may result in increased costs or may affect the timing, outcome, or completion of clinical trials, which would adversely affect our ability to advance the development of the product candidates we develop.

Because the number of subjects in our clinical trials are small, the results from these trials, once completed, may be less reliable than results achieved in larger clinical trials.

A trial design that is considered appropriate includes a sufficiently large sample size with appropriate statistical power, as well as proper control of bias, to allow a meaningful interpretation of the results. The preliminary results of trials with smaller sample sizes and heterogeneous patient populations, can be disproportionately influenced by the impact the treatment had on a few individuals, which limits the ability to generalize the results across a broader community, thus making the trial results less reliable than trials with a larger number of subjects and with more homogeneous patient populations. As a result, there may be less certainty that our product candidates would achieve a statistically significant effect in any future clinical trials. If we conduct any future clinical trials, we may not achieve a statistically significant result or the same level of statistical significance seen, if any, in our clinical trials.

Risks Related to Our Dependence on and Work with Third Parties

We rely, and expect to continue to rely, on third parties, including independent clinical investigators, CROs and CDMOs to conduct certain aspects of our preclinical studies and clinical trials. If these third parties do not successfully carry out their contractual duties, comply with applicable regulatory requirements or meet expected deadlines, we may not be able to obtain regulatory approval for or commercialize our current and future product candidates and our business could be substantially harmed.

We have relied upon and plan to continue to rely upon third parties, including independent clinical investigators, third-party CROs and CDMOs to conduct certain aspects of our preclinical studies and clinical trials and to monitor and manage data for our ongoing preclinical and clinical programs. We rely on these parties for execution of our preclinical studies and clinical trials, and control only certain aspects of their activities. Nevertheless, we are responsible for ensuring that each of our studies and trials is conducted in accordance with the applicable protocol, legal, regulatory, and scientific standards, and our reliance on these third parties does not

 

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relieve us of our regulatory responsibilities. We and our third-party contractors and CROs are required to comply with GCP requirements, which are regulations and guidelines enforced by the FDA, the competent authorities of the member states of the European Economic Area (“EEA”), and comparable foreign regulatory authorities for our current and future product candidates in clinical development. Regulatory authorities enforce these GCPs through periodic inspections of trial sponsors, principal investigators and trial sites. If we or any of these third parties or our CROs fail to comply with applicable GCPs, the clinical data generated in our clinical trials may be deemed unreliable and the FDA, the EMA, or comparable foreign regulatory authorities, may require us to perform additional clinical trials before approving our marketing applications. We cannot assure you that upon inspection by a given regulatory authority, such regulatory authority will determine that any of our clinical trials comply with GCP regulations. In addition, our clinical trials must be conducted with the product candidate produced under the FDA’s current good manufacturing practice, or cGMP, regulations or similar foreign regulations. Our failure to comply with these regulations may require us to repeat clinical trials, which would delay the regulatory approval process.

Further, these investigators and CROs are not our employees and we will not be able to control, other than by contract, the amount of resources, including time, which they devote to our current and future product candidates and clinical trials. These third parties may also have relationships with other commercial entities, including our competitors, for whom they may also be conducting clinical trials or other product development activities, which could affect their performance on our behalf. If independent investigators or CROs fail to devote sufficient resources to the development of our current and future product candidates, or if their performance is substandard, it may delay or compromise the prospects for approval and commercialization of any product candidates that we develop. In addition, the use of third-party service providers may require us to disclose our proprietary information to these parties, which could increase the risk that this information will be misappropriated.

Our CROs have the right to terminate their agreements with us in the event of an uncured material breach. In addition, some of our CROs have an ability to terminate their respective agreements with us if it can be reasonably demonstrated that the safety of the subjects participating in our clinical trials warrants such termination, if we make a general assignment for the benefit of our creditors or if we are liquidated.

If any of our relationships with these third-party CROs terminate, we may not be able to enter into arrangements with alternative CROs or to do so on commercially reasonable terms. If CROs do not successfully carry out their contractual duties or obligations, comply with applicable regulatory requirements or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols, regulatory requirements or for other reasons, our clinical trials may be extended, delayed, or terminated and we may not be able to obtain regulatory approval for or successfully commercialize our product candidate and any of our future product candidates. As a result, our results of operations and the commercial prospects for our product candidate or any future product candidates would be harmed, our costs could increase, and our ability to generate revenues could be delayed.

Switching or adding additional CROs involves additional cost and requires management time and focus. In addition, there is a natural transition period when a new CRO commences work. As a result, delays occur, which can materially impact our ability to meet our desired clinical development timelines. Additionally, CROs may lack the capacity to absorb higher workloads or take on additional capacity to support our needs. Though we carefully manage our relationships with our CROs, there can be no assurance that we will not encounter similar challenges or delays in the future or that these delays or challenges will not have a material adverse impact on our business, financial condition, and prospects.

 

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We may depend on other third-party collaborators for the discovery, development, and commercialization of certain of our current and future product candidates. If our collaborations are not successful, we may not be able to capitalize on the market potential of these product candidates.

We have formed, and in the future, we may form or seek strategic alliances, joint ventures, or collaborations, or enter into licensing arrangements with third parties that we believe will complement or augment our development and commercialization efforts with respect to product candidates we develop. Such potential future collaborations involving our product candidates may pose various risks to us, including:

 

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collaborators may have significant discretion in determining the efforts and resources that they will apply to these collaborations and collaborators may not perform their obligations as expected. In some situations, we may not be able to influence our collaborators’ decisions regarding the development of our product candidates, and as a result, our collaborators may not pursue or prioritize the development of those product candidates in a manner that is in our best interest or that we agree with;

 

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

 

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collaborators may not properly obtain, enforce, maintain, or defend our intellectual property rights or proprietary rights or may use our proprietary information in a way that gives rise to actual or threatened litigation or that could jeopardize or invalidate our intellectual property or proprietary information, exposing us to potential litigation or other intellectual property proceedings;

 

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collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability;

 

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disputes may arise between a collaborator and us that cause the delay or termination of the research, development, or commercialization of the product candidate, or that result in costly litigation or arbitration that diverts management attention and resources. Such disputes may also impact our intellectual property ownership and other rights;

 

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a collaborator with marketing and distribution rights to our product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of such products;

 

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collaborators may fail to comply with applicable regulatory requirements regarding the development, manufacture, distribution or marketing of the product candidate, potentially leading to regulatory investigations or proceedings that may slow down product development;

 

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collaborators may delay clinical trials, provide insufficient funding or resources for clinical trials or marketing and distribution of a product, stop a clinical trial, abandon a product candidate or repeat or conduct new clinical trials;

 

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we may lose certain valuable rights under circumstances identified in our collaborations, including if we undergo a change of control;

 

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if a present or future collaborator of ours were to be involved in a business combination, the continued pursuit and emphasis on our product development or commercialization program under such collaboration could be delayed, diminished, or terminated; and

 

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collaboration agreements may restrict our right to independently pursue new product candidates.

If we enter into collaboration agreements and strategic partnerships or license our intellectual property, products, or businesses, we may not be able to realize the benefit of such transactions if we are unable to successfully integrate them with our existing operations, which could delay our timelines or otherwise adversely affect our business. We also cannot be certain that, following a strategic transaction or license, we will achieve the revenue or net income that justifies the entry into such transaction. Any of the factors set forth above, among others, could delay the development and commercialization of our product candidate, which would harm our business prospects, financial condition, and results of operations.

 

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We may seek to establish collaborations, and, if we are not able to establish them on commercially reasonable terms, we may have to alter our development and commercialization plans.

The advancement of our product candidate and development programs and the potential commercialization of our current and future product candidates will require substantial additional cash to fund expenses. For some of our current or future product candidates, we may decide to collaborate with pharmaceutical and biotechnology companies with respect to development and potential commercialization. Any of these relationships may require us to incur non-recurring and other charges, increase our near- and long-term expenditures, issue securities that dilute our existing stockholders, or disrupt our management and business.

We face significant competition in seeking appropriate collaborators and the negotiation process is time-consuming and complex. Whether we reach a definitive agreement for other collaborations will depend, among other things, upon our assessment of the collaborator’s resources and expertise, the terms and conditions of the proposed collaboration and the collaborator’s evaluation of a number of factors. Those factors may include the design or results of clinical trials, the progress of our clinical trials, the likelihood of approval by the FDA, the EMA, or similar regulatory authorities outside the United States, the potential market for the subject product candidate, the costs and complexities of manufacturing and delivering such product candidate to patients, the potential of competing products, the existence of uncertainty with respect to our ownership of technology, which can exist if there is a challenge to such ownership without regard to the merits of the challenge, and industry and market conditions generally. The collaborator may also consider alternative product candidates or technologies for similar indications that may be available to collaborate on and whether such a collaboration could be more attractive than the one with us for our product candidate. The terms of any collaboration or other arrangements that we may establish may not be favorable to us.

Further, we may not be successful in our efforts to establish a strategic partnership or other alternative arrangements for future product candidates because they may be deemed to be at too early of a stage of development for collaborative effort and third parties may not view them as having the requisite potential to demonstrate safety and efficacy.

We may also be restricted under existing collaboration agreements from entering into future agreements on certain terms with potential collaborators. Such exclusivity could limit our ability to enter into strategic collaborations with future collaborators. In addition, there have been a significant number of recent business combinations among large pharmaceutical companies that have resulted in a reduced number of potential future collaborators.

We may not be able to negotiate collaborations on a timely basis, on acceptable terms, or at all. If we are unable to do so, we may have to curtail the development of the product candidate for which we are seeking to collaborate, reduce or delay its development program or one or more of our other development programs, delay its potential commercialization or reduce the scope of any marketing or sales activities, or increase our expenditures and undertake development or commercialization activities at our own expense. If we elect to increase our expenditures to fund development or commercialization activities on our own, we may need to obtain additional capital, which may not be available to us on acceptable terms or at all. If we do not have sufficient funds, we may not be able to further develop our product candidate or any future product candidates or bring them to market and generate product revenue.

In addition, any future collaboration that we enter into may not be successful. The success of future collaboration arrangements will depend heavily on the efforts and activities of our collaborators. Collaborators generally have significant discretion in determining the efforts and resources that they will apply to these collaborations. Disagreements between parties to a collaboration arrangement regarding clinical development and commercialization matters can lead to delays in the development process or commercializing the applicable product candidate and, in some cases, termination of the collaboration arrangement. These disagreements can be difficult to resolve if neither of the parties has final decision-making authority. Collaborations with

 

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pharmaceutical or biotechnology companies and other third parties can often be terminated by the other party. Any such termination or expiration would adversely affect us financially and could harm our business reputation.

We are required to pay royalty and milestone payments under our license agreement with M.D. Anderson, and we must also meet certain development milestones to maintain our license rights.

In October 2021, we entered into a license agreement with The Board of Regents (the “Board of Regents”), of The University of Texas System, on behalf of M.D. Anderson Cancer Center (“M.D. Anderson”), for our engineered TIL cell therapy (the “M.D. Anderson License Agreement”). Under the M.D. Anderson License Agreement, we are required to pay both substantial milestone payments and royalties to M.D Anderson based on the net sales of our products utilizing the licensed technologies. These payments could adversely affect the overall profitability for us of any products that we may seek to commercialize under the M.D. Anderson License Agreement. In order to maintain our license rights under the M.D. Anderson License Agreement, we also need to meet certain specified development milestones, subject to certain cure or extension provisions. There is no assurance that we will continue to be able to meet these development milestones on a timely basis, or at all.

Risks Related to Manufacturing of Our Product Candidates

We currently rely on and expect to continue to rely on a network of third-party suppliers and other third parties for production of our current and future product candidates including TIL products and viral vectors as well as custom critical materials such as anti-41BB and iFeeders, and our dependence on these third parties may impair the advancement of our research and development programs and the development of our current and future product candidates.

We rely on and expect to continue to rely on a network of third-party CDMOs for the supply of cGMP-grade clinical trial materials and commercial quantities of our current and future product candidates as well as custom critical materials. Specifically, we collaborate with a network of leading CDMOs to manufacture OBX-115 including membrane-bound IL15 carbonic anhydrase 2 (“mbIL15-CA2”), DRD, viral vector, anti-41BB and iFeeders. Reliance on a network of third-party providers may expose us to more risk than if we were to manufacture our product candidates and the associated critical materials ourselves. The facilities used by our CDMOs to manufacture our engineered TIL candidates and the associated materials must be approved by the FDA and foreign regulatory authorities pursuant to inspections that will be conducted after we submit our BLA to the FDA, or similar applications to foreign regulatory authorities. We have limited control over the manufacturing process of, and beyond contractual terms, we are largely dependent on our CDMOs for compliance with cGMP, and applicable product tracking and tracing requirements, or similar foreign requirements for the manufacture of our product candidate. If our CDMOs cannot successfully manufacture material that conforms to our specifications and the strict regulatory requirements of the FDA or comparable foreign regulatory authorities, or are unable to do so in a timely manner, they may not be able to secure or maintain regulatory approval for their manufacturing facilities and could result in delay of our ability to obtain marketing authorization of our current and future product candidates. In addition, we have limited control over the ability of our CDMOs to maintain adequate quality control, quality assurance and qualified personnel. If the FDA or a comparable foreign regulatory authority does not approve these facilities for the manufacture of our current and future product candidates or if it withdraws any such approval in the future, we may need to find alternative manufacturing facilities, which would significantly impact our ability to develop, obtain regulatory approval for, or if approved, market our product candidate. In addition, any failure to achieve and maintain compliance with these laws, regulations, and standards could subject us to the risk that we may have to suspend the manufacturing of our product candidate or that obtained approvals could be revoked, which would adversely affect our business and reputation. Furthermore, third-party providers may breach existing agreements they have with us because of factors beyond our control. They may also terminate or refuse to renew their agreement with us because of their own financial difficulties or business priorities, at a time that is costly or otherwise inconvenient for us. If we were unable to find an adequate replacement or another acceptable solution in time, our clinical trials could be delayed or our commercial activities could be harmed. Any such changes could cause

 

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our current and future product candidates to perform differently and affect the results of clinical trials conducted with the altered materials, and limit our ability to rely on data from clinical trials conducted with an earlier version of our product candidates. In addition, the fact that we are dependent on our collaborators, our CDMOs, and other third parties for the manufacture, filling, storage, and distribution of our current and future product candidates means that we are subject to the risk that the products may have manufacturing defects that we have limited ability to prevent or control. The sale of products containing such defects could adversely affect our business, financial condition, and results of operations.

We rely on our CDMOs to purchase from third-party suppliers the materials necessary to produce our current product candidate for our clinical trials, and will rely on our existing and future collaborators to purchase from third-party suppliers the materials necessary to develop and produce our product candidates for future clinical trials and, upon approval, our products for commercialization.

Moreover, if approved, we intend to rely on third parties to produce commercial supplies of our engineered TIL candidates and viral vectors as well as custom critical materials such as anti-41BB and iFeeders. Our commercialization of any of our product candidate could be stopped, delayed, or made less profitable if those third parties fail to obtain approval of the FDA or comparable foreign regulatory authorities following inspection of their facilities and procedures to manufacture our product candidate and products, fail to provide us with sufficient quantities of product or product components and materials, or fail to do so at acceptable timing, quality levels, or prices, or fail to otherwise complete their duties in compliance with their obligations to us or other parties.

We are dependent on a limited number of suppliers and, in some instances, a sole supplier, for some of our components and materials used in our product candidates.

There are a limited number of suppliers for raw materials that we use to manufacture our product candidates and there may be a need to assess alternate suppliers to prevent a possible disruption of the manufacture of the materials necessary to produce our product candidate for our clinical trials, and if approved, ultimately for commercial sale. Apart from contractual measures, we do not have any control over the process or timing of the acquisition of these raw materials by our manufacturers or manufacturers paid by our collaborators. Moreover, we currently do not have any agreements for the commercial production of these raw materials. Although we generally do not begin a clinical trial unless we believe we have a sufficient supply of our product candidate to complete the clinical trial or have secured resupply capacity, any significant delay in the supply of our product candidate, or the raw material components thereof, for a planned or an ongoing clinical trial due to the need to replace a third-party manufacturer could considerably delay completion of our clinical trials, product testing, and potential regulatory approval of our product candidate.

In addition, the manufacturing of our product candidate is expensive and time-consuming. If we are successful in obtaining regulatory approval for any of our product candidates, we might have limited quantities of such product candidates available to us in connection with a potential commercial launch, and these supplies may be further limited by our ongoing clinical development activities. If our manufacturers, collaborators or we are unable to purchase or produce sufficient quantities of raw materials or of our product candidate after regulatory approval has been obtained for our product candidate, the commercial launch of our product candidate could be delayed or there could be a shortage in supply, which in either case, would impair our ability to generate revenues from the sale of our product candidate.

We rely on our manufacturers and other subcontractors to comply with and respect the proprietary rights of others in conducting their contractual obligations for us. If our manufacturers or other subcontractors fail to acquire the proper licenses or otherwise infringe third-party proprietary rights in the course of completing their contractual obligations to us, we may have to find alternative manufacturers or defend against claims of infringement, either of which would significantly impact our ability to develop, obtain regulatory approval for, or market our product candidate, if approved.

 

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The operations of our suppliers are subject to additional risks that are beyond our control and that could harm our business, financial condition, results of operations and prospects.

We currently rely on and engage third-party manufacturers to provide critical raw materials, all of the active pharmaceutical ingredients (“APIs”), and the final drug product formulation of our product candidate that are being used in our clinical trials and preclinical studies. If a replacement manufacturer became necessary in the future, we may incur added costs and delays in identifying and qualifying another manufacturer. As a result of our global suppliers, we may be subject to risks associated with doing business abroad, including:

 

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geopolitical tensions, political unrest, terrorism, labor disputes, and economic instability resulting in the disruption of trade from foreign countries in which our products are manufactured;

 

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the imposition of new laws and regulations, including those relating to labor conditions, quality, and safety standards, information and data transfer, imports, duties, taxes, and other charges on imports, as well as trade restrictions and restrictions on currency exchange or the transfer of funds, particularly new or increased tariffs imposed on imports from countries where our suppliers operate,

 

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greater challenges and increased costs with enforcing and periodically auditing or reviewing our suppliers’ and manufacturers’ compliance with cGMPs or status acceptable to the FDA or comparable foreign regulatory authorities;

 

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reduced protection for intellectual property rights, including trademark protection, in some countries,;

 

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disruptions in operations due to global, regional, or local epidemics, pandemics, public health crises or other emergencies or natural disasters;

 

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disruptions or delays in shipments; and

 

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changes in local economic conditions in countries where our manufacturers or suppliers are located.

The National Defense Authorization Act for Fiscal Year 2026 enacted in December 2025 includes a section titled, “Prohibition on Contracting with Certain Biotechnology Providers,” also known as the BIOSECURE Act, aimed at discouraging federal contracting with certain biotechnology companies for biotechnology equipment or services in China and other countries of concern. The statute prohibits federal executive agencies from procuring any biotechnology equipment or service from a biotechnology company of concern, or BCC, or contracting with any such company or any entity that procures or uses equipment or services from a BCC. Any company on the Department of Defense’s Chinese Military Companies List (1260H list) is considered a BCC under the new law and the White House Office of Management and Budget also is empowered to designate companies as BCCs based on consultations with Cabinet Secretaries and other key leaders from the executive branch. This legislation may have the effect of restricting the ability of biopharmaceutical companies that enter into contracts with or receive funding from U.S. federal agencies from purchasing services or equipment from certain and other foreign Chinese biotechnology companies.

These and other factors beyond our control could interrupt our suppliers’ production, influence the ability of our suppliers to export our clinical supplies cost-effectively or at all, and inhibit our supplier’s ability to procure certain materials, any of which could delay our clinical trials or otherwise harm our business, financial condition, results of operations, and prospects.

Changes in methods of product candidate manufacturing or formulation may result in additional costs or delay.

As product candidates proceed through preclinical studies to late-stage clinical trials towards potential approval and commercialization, it is common that various aspects of the development program, such as manufacturing methods and formulation, are altered along the way in an effort to optimize processes and results. In addition, we will likely need to change or expand our CDMO network for manufacturing our product candidates to one that can support commercial-scale manufacturing. Such changes carry the risk that they will

 

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not achieve these intended objectives. Any of these changes could cause our product candidate to perform differently and affect the results of planned clinical trials or other future clinical trials conducted with the materials manufactured using altered processes. Such changes may also require additional testing, FDA notification, or FDA approval. This could delay completion of clinical trials, require the conduct of bridging clinical trials or the repetition of one or more clinical trials, increase clinical trial costs, delay approval of our product candidate, and jeopardize our ability to commence sales, if approved, and generate revenue.

We are subject to multiple manufacturing risks, any of which could substantially increase our costs and limit supply of our product candidate.

The process of manufacturing our engineered TIL product candidates is complex, time-consuming, highly regulated, and subject to several risks, including:

 

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Manufacturing cellular therapies is complicated and tightly regulated by the FDA and comparable regulatory authorities around the world, and although alternative third-party suppliers with the necessary manufacturing and regulatory expertise and facilities exist, it could be expensive and take a significant amount of time to arrange for alternative suppliers, transfer manufacturing procedures to these alternative suppliers, and demonstrate comparability of material produced by such new suppliers. New manufacturers of any product candidate or intermediate would be required to qualify under applicable regulatory requirements. These manufacturers may not be able to manufacture our product candidates at costs, or in sufficient quantities, or in a timely manner necessary to complete development of our product candidates or make commercially successful products. If we are unable to arrange for alternative third-party manufacturing sources, or to do so on commercially reasonable terms or in a timely manner, we may not be able to complete development of our product candidates, or market or distribute them. In addition, should the FDA or comparable regulatory authorities not agree with our product candidate specifications and comparability assessments for these materials, further clinical development of our product candidates could be substantially delayed and we would incur substantial additional expenses.

 

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product loss during the manufacturing process, including loss caused by contamination, equipment failure or improper installation or operation of equipment, or operator error. Even minor deviations from normal manufacturing processes could result in reduced production yields, product defects, and other supply disruptions. If microbial, viral, or other contaminations are discovered in our products or in the manufacturing facilities in which our products are made, such manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the contamination;

 

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we will likely continue to expand our CDMO network for manufacturing our product candidate to meet clinical and commercial demand;

 

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we will need to expand and develop relationships with suppliers of critical starting materials or reagents, increase the scale of production and demonstrate comparability of the material produced at these facilities to the material that was previously produced. Transferring manufacturing processes and know-how is complex and involves review and incorporation of both documented and undocumented knowledge that may have evolved over time. In addition, transferring production to different facilities may require utilization of new or different processes to meet the specific requirements of a given facility. We would expect additional comparability work will also need to be conducted to support the transfer of certain manufacturing processes and process improvements. We cannot be certain that all relevant know-how and data have been adequately incorporated into the manufacturing process until the completion of studies and the related evaluations intended to demonstrate the comparability. If we are not able to successfully transfer and produce comparable product candidates, our ability to further develop and manufacture our product candidates may be negatively impacted;

 

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the manufacturing facilities in which our products are made could be adversely affected by equipment failures, labor and raw material shortages, natural disasters, power failures, and numerous other factors;

 

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differences in tumor procurement across sites may give us a suboptimal starting material;

 

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it may be difficult to meet comparability standards across multiple CDMOs; and

 

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any adverse developments affecting manufacturing operations for our products may result in shipment delays, inventory shortages, lot failures, product withdrawals or recalls, or other interruptions in the supply of our products. We may also have to take inventory write-offs and incur other charges and expenses for products that fail to meet specifications, undertake costly remediation efforts, or seek more costly manufacturing alternatives.

Our OBX-115 product candidate comprises a live cell suspension of autologous TIL derived from the patient’s tumor that have been engineered to express mbIL15. As an autologous cell therapy, the manufacture of our OBX-115 product candidate involves complex processes, including tumor collection, tumor processing, pre-Rapid Expansion Protocol (“Pre-REP”), harvest and cryopreservation, LN2 storage, Pre-REP thaw, activation, transduction, Rapid Expansion Protocol (“REP”), harvest, and cryopreservation, LN2 storage, quality testing and release, LN2 shipment, clinical site receipt, thaw and patient administration. Our manufacturing process may be susceptible to product loss or failure due to logistical issues associated with collection of the patients’ tumor materials, shipping such material to the manufacturing site, shipping the final product back to the patient, and infusing the patient with the finished cell therapy product. Product loss or failure may also be caused by manufacturing issues associated with the variability in patient starting material, differences in tumor procurement across clinical sites, interruptions in the manufacturing process, contamination, equipment or utility failure, assay failures, improper installation or operation of equipment, vendor or operator error, GMP issues, inconsistency in cell growth, and variability in product characteristics. Even minor deviations from normal manufacturing processes could result in reduced production yields, product defects, and other supply disruptions.

We may also make changes to our manufacturing processes at various points during development, for a number of reasons, such as improving process performance, introducing new raw materials, decreasing processing time, increasing manufacturing success rate, costs improvement, achieving scale, or other reasons. Such changes carry the risk that they will not achieve their intended objectives, and any of these changes could cause our product candidate to perform differently and affect the results of our ongoing or future clinical trials. In some circumstances, changes in the manufacturing process may require us to perform ex vivo comparability studies and to collect additional data from patients prior to undertaking more advanced clinical trials. For instance, changes in our process during the course of clinical development may require us to show the comparability of the product used in earlier clinical phases or at earlier portions of a trial to the product used in later clinical phases or later portions of the trial.

Risks Related to Government Regulation

The regulatory approval processes of the FDA and comparable foreign authorities are lengthy, time-consuming, and inherently unpredictable, and if we are ultimately unable to obtain regulatory approval for our product candidate, our business will be materially harmed.

The time required to obtain approval by the FDA and comparable foreign authorities is unpredictable but typically takes many years following the commencement of clinical trials and depends upon numerous factors, including the substantial discretion of the regulatory authorities. In addition, approval policies, regulations, or the type and amount of clinical data necessary to gain approval, or maintain approval, may change during the course of a product candidate’s clinical development and may vary among jurisdictions. For example, the Oncology Center of Excellence within the FDA has advanced Project Optimus, which is an initiative to reform the dose optimization and dose selection paradigm in oncology drug development to emphasize selection of an optimal dose, which is a dose or doses that maximizes not only the efficacy of a drug but the safety and tolerability as well. This shift from the prior approach, which generally determined the maximum tolerated dose, may require sponsors to spend additional time and resources to further explore a product candidate’s dose-response relationship to facilitate optimum dose selection in a target population. Other recent Oncology Center of

 

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Excellence initiatives have included Project FrontRunner, a new initiative with a goal of developing a framework for identifying candidate drugs for initial clinical development in the earlier advanced setting rather than for treatment of patients who have received numerous prior lines of therapies or have exhausted available treatment options; and Project Confirm, which is an initiative to promote the transparency of outcomes related to accelerated approvals for oncology indications and provide a framework to foster discussion, research, and innovation in approval and post-marketing processes, with the goal to enhance the balance. We are considering these and other policy changes as they relate to our programs.

We have not obtained regulatory approval for any of our product candidates. Neither we nor any future collaborator is permitted to market any biological product in the United States until we or the future collaborator receives regulatory approval of a BLA, from the FDA. It is possible that none of our current or future product candidates will ever obtain regulatory approval from the FDA or comparable foreign regulatory authorities.

Our current and future product candidates could fail to receive regulatory approval for many reasons, including the following:

 

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the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials;

 

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we may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that a product candidate has an acceptable risk-benefit profile in the proposed indication;

 

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we may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that the facility in which a product candidate is manufactured meets standards designed to assure that the product candidate is safe, pure, and potent;

 

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the results of clinical trials may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities for approval;

 

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the FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from clinical trials or preclinical studies;

 

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the data collected from clinical trials of our product candidate may not be sufficient to support the submission of a BLA to the FDA or regulatory submissions to comparable regulatory authorities to obtain regulatory approval in such jurisdiction; and

 

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the FDA or comparable foreign regulatory authorities may find deficiencies with or fail to approve our manufacturing processes or facility or the manufacturing processes or facilities of third-party manufacturers with which we contract for clinical and commercial supplies.

This lengthy approval process as well as the unpredictability of clinical trial results may result in our failing to obtain regulatory approval to market any product candidate we develop, which would significantly harm our business, results of operations, and prospects. The FDA and other comparable foreign authorities have substantial discretion in the approval process and in determining when or whether regulatory approval will be granted for any product candidate that we develop. Even if we believe the data collected from ongoing and future clinical trials of our product candidates are promising, such data may not be sufficient to support approval by the FDA or any other regulatory authority.

In addition, even if we were to obtain approval, the FDA may approve any of our product candidates for fewer or more limited indications, or a more limited patient population, than we request, may grant approval contingent on the performance of costly clinical trials or other post-marketing requirements, or may approve a product candidate with a label that does not include the labeling claims we believe are necessary or desirable for the successful commercialization of such product candidates. Even if we obtain regulatory approval for our product candidate, we will be required to submit new or supplemental applications and obtain approval for certain changes to the approved product, product labeling, or manufacturing process and the FDA or comparable foreign regulatory authority may refuse to approve such applications or supplements.

 

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In addition, the FDA or comparable foreign regulatory authorities may change their policies, promulgate additional regulations, revise existing regulations, or take other actions that may prevent or delay approval of our future products under development on a timely basis. Such policy or regulatory changes could impose additional requirements upon us that could delay our ability to obtain approvals, increase the costs of compliance, or restrict our ability to maintain any marketing authorizations we may have obtained. Any of the foregoing scenarios could materially harm the commercial prospects for our product candidate.

Disruptions at the FDA and other government agencies caused by funding shortages or global health concerns could hinder their ability to hire, retain, or deploy personnel, and substantial leadership, personnel and policy changes or otherwise, could prevent new or modified products from being developed, approved, or commercialized in a timely manner or at all, which could negatively impact our business.

The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, statutory, regulatory, and policy changes, the FDA’s ability to hire and retain key personnel and accept the payment of user fees, and other events that may otherwise affect the FDA’s ability to perform routine functions. Average review times at the agency have fluctuated in recent years as a result. In addition, government funding of other government agencies that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable. Without the appropriation of adequate funding to federal agencies, our business operations related to our product development activities for the U.S. market could be impacted.

Disruptions at the FDA and other agencies, including substantial leadership, personnel, and policy changes, may also slow the time necessary for biological products or modifications to approved biological products to be reviewed and/or approved by necessary government agencies, which would adversely affect our business. Changes and cuts in FDA staffing during 2025 have been seen as resulting in delays in the FDA’s responsiveness or in its ability to review IND submissions or marketing applications, issue regulations or guidance, or implement or enforce regulatory requirements in a timely fashion.

With the change in the U.S. presidential administration in 2025, there is substantial uncertainty as to the extent and manner in which the administration will continue to seek to modify or revise the requirements and policies of the FDA and other regulatory agencies with jurisdiction over our product candidates any products for which we obtain approval. This uncertainty could present new challenges and/or opportunities as we navigate development and approval of our product candidates. Additionally, the administration could issue or promulgate executive orders, regulations, policies or guidance that adversely affect us or create a more challenging or costly environment to pursue the development of new therapeutics candidates. Also, state governments may seek to address or react to changes at the federal level with changes to their regulatory frameworks in a manner that could impact our operations.

We may be required to suspend, repeat, or terminate our clinical trials if they are not conducted in accordance with regulatory requirements, the results are negative or inconclusive, or the trials are not well designed.

Clinical trials must be conducted in accordance with GCP requirements, which are regulations and guidelines enforced by the FDA, the competent authorities of the member states of the EEA, and comparable foreign regulatory authorities. Clinical trials are subject to oversight by the FDA, other foreign governmental agencies, and IRBs or ethical committees at the trial sites where the clinical trials are conducted. In addition, clinical trials must be conducted with product candidates manufactured in accordance with applicable cGMP requirements. Clinical trials may be suspended by the FDA, other foreign regulatory authorities, us, or by an IRB or ethics committee with respect to a particular clinical trial site, for various reasons, including:

 

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deficiencies in the conduct of the clinical trials, including failure to conduct the clinical trial in accordance with regulatory requirements or trial protocols;

 

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deficiencies in the clinical trial operations or trial sites;

 

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unforeseen adverse side effects or the emergence of undue risks to trial subjects;

 

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deficiencies in the trial design necessary to demonstrate efficacy;

 

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the product candidate may not appear to offer benefits over current therapies; or

 

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the quality or stability of the product candidate may fall below acceptable standards.

Even if we receive marketing approval of our product candidate, we will be subject to ongoing regulatory obligations and continued regulatory review, which may result in significant additional expenses. If we fail to comply or experience unanticipated problems with our products, we may be subject to administrative and judicial enforcement, including monetary penalties, for non-compliance and our approved products, if any, could be deemed misbranded or adulterated and prohibited from continued distribution.

Any marketing approvals that we receive for any current or future product candidates may be subject to limitations on the approved indicated uses for which the product may be marketed or the conditions of approval, or contain requirements for potentially costly post-market testing and surveillance to monitor the safety and efficacy of the product candidate. The FDA may also require implementation of a REMS as a condition of approval of any product candidate, which could include requirements for a medication guide, physician communication plans or additional elements to ensure safe use, such as restricted distribution methods, patient registries, and other risk minimization tools. In addition, if the FDA or a comparable foreign regulatory authority approves a product candidate, the manufacturing processes, quality control, labeling, packaging, distribution, tracking and tracing, adverse event and deviation reporting, storage, advertising, promotion, import and export, and record keeping for the product candidate will be subject to extensive and ongoing regulatory requirements. These requirements include submissions of safety and other post-marketing information and reports, registration, as well as continued compliance with cGMP regulations and with GCP requirements for any clinical trials that we may conduct post-approval. Problems with our or our third-party manufacturers’ manufacturing processes or facilities, or failure to comply with regulatory requirements, may result in, among other things:

 

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suspension of, or imposition of restrictions on, the marketing or manufacturing of the product, withdrawal of the product from the market, or product recalls;

 

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adverse inspectional observations (FDA Form 483s), Warning Letters or Untitled Letters, or holds on clinical trials;

 

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suspension of production or distribution;

 

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product seizure or detention, monetary penalties, refusal to permit the import or export of the product, or placement on Import Alert; and

 

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permanent injunctions and consent decrees including the imposition of civil or criminal penalties.

Given the nature of biological product manufacturing, there is a risk of contamination. Any contamination could materially adversely affect our ability to produce product candidates on schedule and could, therefore, harm our results of operations and cause reputational damage. Some of the raw materials and other components required in our manufacturing process are derived from biologic sources. Such raw materials are difficult to procure and may be subject to contamination or recall. A material shortage, contamination, recall or restriction on the use of biologically derived substances in the manufacture of our product or product candidates could adversely impact or disrupt the commercial manufacturing or the production of clinical material, which could materially and adversely affect our development and commercialization timelines and our business, financial condition, results of operations and prospects and could adversely affect our ability to meet our supply obligations.

Moreover, the FDA and the U.S. Department of Justice strictly regulate the promotional claims that may be made about drug and biological products. In particular, an approved product may not be promoted for uses that are not approved by the FDA as reflected in the product’s approved labeling, or off-label uses. The FDA and

 

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other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses. The FDA has issued guidance on the factors that it will consider in determining whether a firm’s product communication is consistent with the FDA-required labeling for that product, and those factors contain complexity and potential for overlap and misinterpretation. A company that is found to have improperly promoted off-label uses of their products may be subject to significant civil, criminal, and administrative penalties.

The FDA and other regulatory authorities’ policies may change and additional government regulations may be enacted that could prevent, limit or delay marketing approval of a product. 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. 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 marketing approval that we may have obtained and we may not achieve or sustain profitability.

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 products. If regulatory sanctions are applied or if regulatory approval is withdrawn, the value of our company and our operating results will be adversely affected.

In addition, 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 marketing approval that we may have obtained and we may not achieve or sustain profitability.

While we intend to seek designations for our potential product candidates with the FDA and comparable foreign regulatory authorities that are intended to confer benefits such as a faster development process or an accelerated regulatory pathway, there can be no assurance that we will successfully obtain such designations. In addition, even if one or more of our potential product candidates are granted such designations, we may not be able to realize the intended benefits of such designations or maintain such designations.

The FDA and comparable foreign regulatory authorities offer certain designations for product candidates that are designed to encourage the research and development of product candidates that are intended to address conditions with significant unmet medical need. These designations may confer benefits such as additional interaction with regulatory authorities, a potentially accelerated regulatory pathway, and priority review.

OBX-115 has been granted Fast Track and RMAT designation from the FDA for the treatment of patients with unresectable or metastatic melanoma that is resistant ICI therapy. We may seek designations for other indications, or for future product candidates. However, there can be no assurance that we will successfully obtain such designations for any additional indications or future product candidates, or that we will be able to maintain the designations we have been granted. In addition, while such designations could expedite the development or approval process, they generally do not change the standards for approval. Even if we obtain such designations for one or more of our potential product candidates, there can be no assurance that we will realize their intended benefits. For example, we may seek fast track designation for additional indications or for our other potential product candidates. If a therapy is intended for the treatment of a serious or life-threatening condition and its nonclinical or clinical data demonstrates the potential to address unmet medical needs for this condition, the therapy sponsor may apply for Fast Track Designation. The FDA has broad discretion whether to grant this designation, so even if we believe a particular product candidate is eligible for this designation, there can be no assurance that the FDA would decide to grant it. Even if Fast Track Designation has been granted, we may not experience a faster development process, review or approval compared to conventional FDA procedures, and receiving a Fast Track Designation does not provide assurance of the product’s ultimate FDA approval. In addition, the FDA may withdraw Fast Track Designation if it believes that the designation is no longer supported by data from our clinical development program.

 

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Additionally, we may seek a Breakthrough Therapy designation for some of our potential product candidates. A breakthrough therapy is defined as a therapy that is intended, alone or in combination with one or more other therapies, to treat a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the therapy may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. For therapies that have been designated as breakthrough therapies, interaction and communication between the FDA and the sponsor of the trial can help to identify the most efficient path for clinical development while minimizing the number of patients placed in ineffective control regimens. Therapies designated as breakthrough therapies by the FDA may also be eligible for accelerated approval. Designation as a breakthrough therapy is within the discretion of the FDA. Accordingly, even if we believe one of our potential product candidates meets the criteria for designation as a breakthrough therapy, the FDA may disagree and instead determine not to make such designation. In any event, the receipt of a breakthrough therapy designation for a product candidate may not result in a faster development process, review, or approval compared to therapies considered for approval under conventional FDA procedures and does not assure ultimate approval by the FDA. In addition, even if one or more of our potential product candidates qualify as breakthrough therapies, the FDA may later decide that such product candidates no longer meet the conditions for qualification.

In addition, we may seek a RMAT designation for additional indications or for our other potential product candidates. RMAT is defined as cell therapies, therapeutic tissue engineering products, human cell and tissue products, and combination products using any such therapies or products, with limited expectations. Gene therapies, including genetically modified cells that lead to a durable modification of cells or tissues may meet the definition of a regenerative medicine therapy. The RMAT program is intended to facilitate efficient development and expedite review of RMATs, which are intended to treat, modify, reverse, or cure a serious or life-threatening disease or condition. A BLA for an RMAT may be eligible for priority review or accelerated approval through (1) surrogate or intermediate endpoints reasonably likely to predict long-term clinical benefit or (2) reliance upon data obtained from a meaningful number of sites. Benefits of such designation also include early interactions with the FDA to discuss any potential surrogate or intermediate endpoint to be used to support accelerated approval. A regenerative medicine therapy that is granted accelerated approval and is subject to post-approval requirements may fulfill such requirements through the submission of clinical evidence, clinical trials, patient registries, or other sources of real world evidence, such as electronic health records; the collection of larger confirmatory data sets; or post-approval monitoring of all patients treated with such therapy prior to its approval. RMAT designation is within the discretion of the FDA. Accordingly, even if we believe one of our potential product candidates meets the criteria for designation as a regenerative medicine advanced therapy, the FDA may disagree and instead determine not to make such designation. In any event, the receipt of RMAT designation for a product candidate may not result in a faster development process, review, or approval compared to drugs considered for approval under conventional FDA procedures and does not assure ultimate approval by the FDA. In addition, even if one or more of our potential product candidates qualify as for RMAT designation, the FDA may later decide that the biological products no longer meet the conditions for qualification.

We may also seek rare pediatric disease designation for some of our potential product candidates. The FDA defines “rare pediatric disease” as a (i) serious or life-threatening disease in which the serious or life-threatening manifestations primarily affect individuals aged from birth to 18 years, including age groups often called neonates, infants, children, and adolescents; and (ii) a rare disease or condition within the meaning of the Orphan Drug Act. Designation of a product candidate as a product for a rare pediatric disease does not guarantee that a marketing application for such product candidate will meet the eligibility criteria for a rare pediatric disease priority review voucher (“PRV”), at the time the application is approved. Under the U.S. Federal Food, Drug, and Cosmetic Act (“FDCA”), we will need to request a rare pediatric disease PRV in our original marketing application for any eligible potential product candidates. The FDA may determine that a marketing application for any such product candidate, if approved, does not meet the eligibility criteria for a PRV. Vouchers for rare pediatric disease drugs are awarded for qualifying applications when the drug receives approval. Under current law, after September 30, 2029, the FDA may not award any rare pediatric disease priority review vouchers, although the FDA’s authority to do so could be extended by Congress in the future.

 

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In the future, we may also seek approval of product candidates under the FDA’s accelerated approval pathway. A product may be eligible for accelerated approval if it is designed to treat a serious or life-threatening disease or condition and generally provides a meaningful advantage over available therapies upon a determination that the product candidate has an effect on a surrogate endpoint or intermediate clinical endpoint that is reasonably likely to predict clinical benefit or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality (“IMM”), that is reasonably likely to predict an effect on IMM or other clinical benefit. The FDA considers a clinical benefit to be a positive therapeutic effect that is clinically meaningful in the context of a given disease, such as IMM. For the purposes of accelerated approval, a surrogate endpoint is a marker, such as a laboratory measurement, radiographic image, physical sign, or other measure that is thought to predict clinical benefit, but is not itself a measure of clinical benefit. An intermediate clinical endpoint is a clinical endpoint that can be measured earlier than an effect on irreversible morbidity or mortality that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit. The accelerated approval pathway may be used in cases in which the advantage of a new biologic over available therapy may not be a direct therapeutic advantage, but is a clinically important improvement from a patient and public health perspective. If granted, accelerated approval may be contingent on the sponsor’s agreement to conduct, in a diligent manner, additional post-approval confirmatory studies to verify and describe the biologic’s clinical benefit. In case of an accelerated BLA approval, FDA may mandate a Phase 4 clinical trial prior to full approval. Under the Food and Drug Omnibus Reform Act of 2022 (“FDORA”), the FDA is permitted to require, as appropriate, that a post-approval confirmatory study or studies be underway prior to approval or within a specified time period after the date of approval for a product granted accelerated approval.

FDORA also requires sponsors to send updates to the FDA every 180 days on the status of such studies, including progress toward enrollment targets, and the FDA must promptly post this information publicly. FDORA also gives the FDA increased authority to withdraw approval of a biologic granted accelerated approval on an expedited basis if the sponsor fails to conduct such studies in a timely manner, send the necessary updates to the FDA, or if such post-approval studies fail to verify the drug’s predicted clinical benefit. Under FDORA, the FDA is empowered to take action, such as issuing fines, against companies that fail to conduct with due diligence any post-approval confirmatory study or submit timely reports to the agency on their progress. There can be no assurance that the FDA would allow any of the product candidates we may develop to proceed on an accelerated approval pathway, and even if the FDA did allow such pathway, there can be no assurance that such submission or application will be accepted or that any expedited development, review or approval will be granted on a timely basis, or at all. Moreover, even if we received accelerated approval, any post-approval studies required to confirm and verify clinical benefit may not show such benefit, which could lead to withdrawal of any approvals we have obtained. Receiving accelerated approval does not assure that the product’s accelerated approval will eventually be converted to a traditional approval.

If the FDA determines that a product candidate offers a treatment for a serious condition and, if approved, the product would provide a significant improvement in safety or effectiveness, the FDA may designate the product candidate’s marketing application for priority review. A priority review designation means that the goal for the FDA to review an application is six months from the filing date, rather than the standard review period of ten months. We may request priority review for the product candidates that we develop. The FDA has broad discretion with respect to whether to grant priority review status to a product candidate, so even if we believe a particular product candidate is eligible for such designation or status, the FDA may decide not to grant it. Moreover, a priority review designation does not necessarily result in an expedited regulatory review or approval process or necessarily confer any advantage with respect to approval compared to conventional FDA procedures. Receiving priority review from the FDA does not guarantee approval within the six-month review cycle or at all.

In addition, in the European Union, we may seek to participate in the PRIority Medicines (“PRIME”), scheme for our potential product candidates. The PRIME scheme is intended to encourage development of products in areas of unmet medical need and provides accelerated assessment of products representing substantial innovation, where the marketing authorization application will be made through the centralized procedure in the European Union. Products from small-and medium-sized enterprises may qualify for earlier entry into the

 

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PRIME scheme than larger companies on the basis of compelling non-clinical data and tolerability data from initial clinical trials. Eligible products must target conditions for which there is an unmet medical need (no treatment option exists in the European Union or, they can offer a major therapeutic advantage over existing treatments). Many 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 accelerated marketing authorization application assessment once a dossier has been submitted. There is no guarantee, however, that our potential product candidates would be deemed eligible for the PRIME scheme and even if we do participate in the PRIME scheme, where during the course of development a product no longer meets the eligibility criteria, support under the PRIME scheme may be withdrawn. PRIME eligibility does not change the standards for product approval, and there is no assurance that any such designation or eligibility will result in expedited review or approval.

Risks Related to Commercialization

The commercial success of our product candidate or any future product candidates will depend upon the degree of market acceptance of such product candidates by physicians, patients, healthcare payors, and others in the medical community.

Our product candidate and any future product candidates may not be commercially successful. Even if our product candidate or any future product candidates receive regulatory approval, they may not gain market acceptance among physicians, patients, healthcare payors, or the medical community. The commercial success of our lead product candidate OBX-115 or any future product candidates will depend significantly on the broad adoption and use of the resulting marketed product by these individuals and organizations for approved indications. The degree of market acceptance of our products will depend on a number of factors, including:

 

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demonstration of clinical efficacy and safety, including as compared to any more-established products;

 

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the indications for which our product candidate or any future product candidates are approved, if any;

 

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the limitation of our targeted patient population and other limitations or warnings contained in any FDA-approved labeling;

 

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acceptance of a new drug for the relevant indication by healthcare providers and their patients;

 

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the pricing and cost-effectiveness of our products, as well as the cost of treatment with our products in relation to alternative treatments and therapies;

 

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our ability to obtain and maintain sufficient third-party coverage and adequate reimbursement from government healthcare programs, including Medicare and Medicaid, private health insurers, and other third-party payors;

 

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the willingness of patients to pay all, or a portion of, out-of-pocket costs associated with our products in the absence of sufficient third-party coverage and adequate reimbursement;

 

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any restrictions on the use of our products, and the prevalence and severity of any adverse effects;

 

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potential product liability claims;

 

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the timing of market introduction of our products as well as availability, safety, and efficacy of competitive drugs;

 

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the effectiveness of our or any current or future collaborators’ sales and marketing strategies; and

 

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unfavorable publicity relating to the product.

If our product candidate or any future product candidates is approved but does not achieve an adequate level of acceptance by physicians, hospitals, healthcare payors, or patients, we may not generate sufficient revenue from that product and may not become or remain profitable. Our efforts to educate the medical community and third-party payors regarding the benefits of our products may require significant resources and may never be successful.

 

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The market opportunities for any current or future product candidate we develop, if approved, may be limited to those patients who are ineligible for established therapies or for whom prior therapies have failed, and may be small.

Any revenue we are able to generate in the future from product sales will be dependent, in part, upon the size of the market in the United States and any other jurisdiction for which we gain regulatory approval and have commercial rights. If the markets or patient subsets that we are targeting are not as significant as we estimate, we may not generate significant revenues from sales of such products, even if approved. The number of patients who have the types of cancer or autoimmune diseases we are targeting may turn out to be lower than expected. Additionally, the potentially addressable patient population for our current or future product candidates may be limited, if and when approved. Even if we obtain significant market share for any product candidate, if and when approved, if the potential target populations are small, we may never achieve profitability without obtaining marketing approval for additional indications, including to be used as first- or second-line therapy.

Cancer therapies are sometimes characterized as first-line, second-line, or third-line, and the FDA often approves new therapies initially only for third-line use. When cancer is detected early enough, first-line therapy, usually chemotherapy, hormone therapy, surgery, radiation therapy or a combination of these, is sometimes adequate to cure the cancer or prolong life without a cure. Second- and third-line therapies are administered to patients when prior therapy is not effective. The number of patients who receive second- and third-line treatment is significantly smaller than the number of patients who receive first-line treatment, and the prognosis of patients who receive second- or third-line treatment is often poorer than that of patients who receive first-line treatment.

We may initially seek approval for any other product candidates we develop as second- or third-line therapies. If we do so, for those products that prove to be sufficiently beneficial, if any, we would expect potentially to seek approval as a first-line therapy, but there is no guarantee that any product candidate we develop, even if approved, would be approved for first-line therapy, and, prior to any such approvals, we may have to conduct additional clinical trials.

If approved, our product candidate that is regulated as a biological product, or biologic, may face competition from biosimilars approved through an abbreviated regulatory pathway.

The Biologics Price Competition and Innovation Act of 2009 (“BPCIA”), established an abbreviated pathway for the approval of biosimilar and interchangeable biologics with an FDA-licensed reference biologic product. Under the BPCIA, a reference biological product is granted 12 years of non-patent data exclusivity from the time of first licensure of the product, and the FDA will not accept an application for a biosimilar or interchangeable product based on the reference biological product until four years after the date of first licensure of the reference product. In addition, the approval of a biosimilar product may not be made effective by the FDA until 12 years from the date on which the reference product was first licensed. During this 12-year period of exclusivity, another company may still develop and receive approval of a competing biologic, so long as their BLA does not rely on the reference product or sponsor’s data and is not submitted as a biosimilar application. Certain changes and supplements to an approved BLA, and subsequent applications filed by the same sponsor, manufacturer, licensor, predecessor in interest, or other related entity do not qualify for the 12-year exclusivity period. The law is complex and any new policies or processes adopted by the FDA could have a material adverse effect on the future commercial prospects for our biological products.

We believe that any of the product candidates we develop that is approved in the United States as a biological product under a BLA should qualify for the 12-year period of exclusivity. However, there is a risk that this exclusivity could be shortened due to congressional action or otherwise, or that the FDA will not consider the subject product candidate to be a reference product for competing products, potentially creating the opportunity for biosimilar competition sooner than anticipated. Moreover, biosimilars compete with, and in some circumstances may be deemed under state law to be substitutable for, the previously approved reference product. The approval of a biosimilar of our product candidate could have a material adverse impact on our business due

 

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to increased competition and pricing pressure. It is also possible that payors will give reimbursement preference to biosimilars over reference biological products, even absent a determination of interchangeability.

Laws and regulations outside the United States differ, including the length and extent of patent and exclusivity protection and pathways for competition to enter the market. Other countries may have significantly shorter or longer periods of exclusivity. In addition, other countries may have different standards in determining similarity to a reference biological product. Any market entry of competing products to our product candidate in these other regions could adversely affect our business in those regions.

To the extent that we do not receive any anticipated periods of regulatory exclusivity for our current product candidate or any future product candidates it could adversely affect our business, financial condition, results of operations and prospects.

We currently have no marketing and sales organization and have no experience as a company in marketing products. If we are unable to establish marketing and sales capabilities or enter into agreements with third parties to market and sell our product candidates, if approved, we may not be able to generate product revenue.

We currently have no sales, marketing or distribution capabilities and have no experience in marketing products. We intend to develop an in-house marketing organization and sales force, which will require significant capital expenditures, management resources and time. We will have to compete with other pharmaceutical and biotechnology companies to recruit, hire, train and retain marketing and sales personnel.

If we are unable or decide not to establish internal sales, marketing and distribution capabilities, we will pursue arrangements with third-party sales, marketing and distribution collaborators regarding the sales and marketing of our products, if approved. However, there can be no assurance that we will be able to establish or maintain such arrangements on favorable terms or if at all, or if we are able to do so, that these third-party arrangements will provide effective sales forces or marketing and distribution capabilities. Any revenue we receive will depend upon the efforts of such third parties, which may not be successful. We may have little or no control over the marketing and sales efforts of such third parties and our revenue from product sales may be lower than if we had commercialized our product candidates ourselves. We also face competition in our search for third parties to assist us with the sales and marketing efforts of our product candidates. If we are not successful in commercializing any approved products, our future product revenue will suffer and we may incur significant additional losses.

There can be no assurance that we will be able to develop in-house sales and distribution capabilities or establish or maintain relationships with third-party collaborators to commercialize any product in the United States, Canada or overseas. Any failure or delay in the development of our internal or a third parties’ sales, marketing and distribution capabilities would adversely impact the commercialization of our product candidates.

Off-label use or misuse of our product candidate may harm our reputation in the marketplace or result in injuries that lead to costly product liability suits.

If our product candidate OBX-115 or any future product candidates are approved by the FDA, we may only promote or market such product candidates in a manner consistent with their FDA-approved labeling. We will train our marketing and sales force against promoting our product candidates for uses outside of the approved indications for use, known as “off-label uses.” We cannot, however, prevent a physician from using our product candidates off-label, when in the physician’s independent professional medical judgment he or she deems it appropriate. Furthermore, the use of our product candidates for indications other than those approved by the FDA may not effectively treat such conditions. Any such off-label use of our product candidates could harm our reputation in the marketplace among physicians and patients. There may also be increased risk of injury to patients if physicians attempt to use our product candidates for these uses for which they are not approved, which

 

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could lead to product liability suits that might require significant financial and management resources and that could harm our reputation.

If we or any third-party manufacturer we engage now or in the future fails to comply with environmental, health, and safety laws and regulations, we could become subject to fines or penalties or incur costs or liabilities that could have a material adverse effect on our business.

We and third-party manufacturers we engage now are, and any third-party manufacturer we may engage in the future will be, subject to numerous environmental, health, and safety laws and regulations, including those governing laboratory procedures and the handling, use, storage, treatment, and disposal of hazardous materials and wastes. Our operations involve the use of hazardous and flammable materials, including chemicals and biological materials. Our operations also produce hazardous waste products. We generally contract with third parties for the disposal of these materials and waste. We cannot eliminate the risk of contamination or injury from these materials. In the event of contamination or injury resulting from our use of hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources. We also could incur significant costs associated with civil or criminal fines and penalties.

Although we maintain general liability insurance as well as 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.

In addition, we may incur substantial costs in order to comply with current or future environmental, health, and safety laws and regulations. These current or future laws and regulations may impair our research, development, or commercialization efforts. Failure to comply with these laws and regulations also may result in substantial fines, penalties, or other sanctions.

Further, with respect to the operations of our current and any future third-party contract manufacturers, it is possible that if they fail to operate in compliance with applicable environmental, health, and safety laws and regulations or properly dispose of wastes associated with our products, we could be held liable for any resulting damages, suffer reputational harm, or experience a disruption in the manufacture and supply of our product candidate or products. In addition, our supply chain may be adversely impacted if any of our third-party contract manufacturers become subject to injunctions or other sanctions as a result of their non-compliance with environmental, health, and safety laws and regulations.

Risks Related to Our Intellectual Property

Our ability to compete may decline if we do not adequately protect our proprietary rights.

Our commercial success depends, in part, on obtaining and maintaining patents and other forms of intellectual property rights for our technology, including product candidates (including clinical product candidates and preclinical product candidates), methods used to produce, purify, and manufacture those product candidates, and methods of utilizing the product candidates, including methods for treating patients, among other aspects of our technology or on licensing-in such rights. Failure to protect or to obtain, maintain, or extend adequate patent and other intellectual property rights could materially adversely affect our ability to develop and market our product candidates or future product candidates.

Our strategy depends in part on our ability to identify and seek patent protection for our discoveries. The patent prosecution process is time-consuming and expensive, and we and our current or future licensors, licensees, or collaborators may not be able to prepare, file, and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner in all jurisdictions where protection may be commercially advantageous. It is also possible that we or our current or future licensors, licensees, or collaborators will fail to identify patentable aspects of inventions made in the course of development activities before it is too late to obtain patent protection on them.

 

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The standards which the USPTO and its foreign counterparts use to grant patents are not always applied predictably or uniformly and can change in the future. There is also no uniform, worldwide policy regarding the subject matter and scope of claims granted or allowable. The laws of some foreign countries do not protect proprietary information to the same extent as the laws of the United States. Outside the United States, patent protection must be sought in individual jurisdictions, further adding to the cost and uncertainty of obtaining adequate patent protection outside of the United States. Accordingly, the issuance, scope, validity, enforceability, and commercial value of our and our current or future licensors’, licensees’, or collaborators’ current and future patent rights are highly uncertain. We cannot predict whether additional patents protecting our technology will issue in the United States or in foreign jurisdictions, or whether any patents that do issue will have claims of adequate scope to provide a competitive advantage. Our and our current or future licensors’, licensees’, or collaborators’ pending and future patent applications may not result in patents being issued which protect our product candidates or other technology, in whole or in part, or which effectively prevent others from commercializing competitive products and technology. The patent examination process may require us or our current or future licensors, licensees, or collaborators to narrow the scope of the claims of our or our current or future licensors’, licensees’, or collaborators’ pending and future patent applications, which may limit the scope of patent protection that may be obtained.

We cannot confirm that all of the potentially relevant prior art relating to our patents and patent applications has been found. If such prior art exists, it can invalidate a patent or prevent a patent from issuing from a pending patent application. Even if patents do successfully issue, or have issued and even if such patents cover a product candidate, and/or other technologies, third parties may initiate an adversarial proceeding including opposition, interference, re-examination, post-grant review, inter partes review, litigation, nullification, or derivation action before patent offices or in court, or similar proceedings challenging the validity, enforceability, or scope, inventorship, or ownership of such patents, which may result in the patent claims being narrowed, invalidated, or held unenforceable or unavailable to us.

Patent applications in the United States and many foreign jurisdictions are typically not published until 18 months after the filing of the first priority application, or in some cases not at all, and publications of discoveries in scientific literature lag behind actual discoveries. As such, we cannot be certain that we were the first to make the inventions claimed in our issued patents or pending patent applications, or that we were the first to file for protection of the inventions set forth in our patents or patent applications. As a result, we may not be able to obtain or maintain protection for certain inventions. Therefore, the enforceability and scope of our patents in the United States and in foreign countries cannot be predicted with certainty and, as a result, any patents that we own or license may not provide sufficient protection against competitors. We may not be able to obtain or maintain patent protection from our pending patent applications, from those we may file in the future, or from those we may license from third parties. Moreover, even if we are able to obtain patent protection, such patent protection may be of insufficient scope to achieve our business objectives.

In addition, changes in, or different interpretations of, patent laws in the United States and other countries may permit others to use our discoveries or to develop and commercialize our technology and products without providing any notice or compensation to us or may limit the scope of patent protection that we or our licensors are able to obtain. The laws of some countries do not protect intellectual property rights to the same extent as U.S. laws and those countries may lack adequate rules and procedures for defending our intellectual property rights.

Finally, our and our current and future licensors’, licensees’ or collaborators’ patent applications cannot be enforced against third parties practicing the claimed technology in such applications unless and until a patent issues from such application(s), and then only to the extent the issued claims cover the technology in the relevant jurisdiction, and, if applicable, until the patent survives an opposition, interference, re-examination, inter partes review, and the like with claims that continue to cover the technology.

 

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We will not seek to protect our intellectual property rights in all jurisdictions throughout the world and we may not be able to adequately enforce our intellectual property rights even in the jurisdictions where we seek protection.

Filing, prosecuting, and defending patents on our product candidate or any future product candidates in all countries and jurisdictions throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States could be less extensive than those in the United States, assuming that rights are obtained in the United States. In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United States. As such, we will not file for patent protection in all national and regional jurisdictions in the world where such protection may be available.

Accordingly, competitors may use our and our existing or future licensors’, licensees’, or collaborators’ technologies in jurisdictions where we have not obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories where we and our existing or future licensors, licensees, or collaborators have patent protection, but enforcement is not as strong as that in the United States. These products may compete with our product candidate or other technologies, and our and our existing or future licensors’, licensees’, or collaborators’ patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.

The laws of some foreign countries do not protect intellectual property rights to the same extent as the laws of the United States. Patent protection must be sought on a country-by-country basis, which is an expensive and time-consuming process with uncertain outcomes. Accordingly, we may choose not to seek patent protection in certain countries, and we will not have the benefit of patent protection in such countries. In addition, the legal systems of some countries, particularly developing countries, do not favor the enforcement of patents and other intellectual property protection, and the requirements for patentability differ, in varying degrees, from country to country, and the laws of some foreign countries do not protect intellectual property rights, including trade secrets, to the same extent as federal and state laws of the United States. As a result, many companies have encountered significant problems in protecting and defending intellectual property rights in certain foreign jurisdictions. Such issues may make it difficult for us to stop the infringement, misappropriation, or other violation of our intellectual property rights. For example, many foreign countries have compulsory licensing laws under which a patent owner must grant licenses to third parties. In addition, many 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. In those countries, we may have limited remedies if patents are infringed or if we are compelled to grant a license to a third party, which could materially diminish the value of those patents. This could limit our potential revenue opportunities. Accordingly, our efforts to enforce intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we own or license. Similarly, if our trade secrets are disclosed in a foreign jurisdiction, competitors worldwide could have access to our proprietary information and we may be without satisfactory recourse. Such disclosure could have a material adverse effect on our business. Moreover, our ability to protect and enforce our intellectual property rights may be adversely affected by unforeseen changes in foreign intellectual property laws.

Furthermore, proceedings to enforce our patent rights and other intellectual property 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, could put our patent applications at risk of not issuing, and could provoke third parties to assert claims against us. We may not prevail in any lawsuit that we initiate, and the damages or other remedies awarded to us, if any, may not be commercially meaningful, while the damages and other remedies we may be ordered to pay such third parties may be significant. 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.

 

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Issued patents covering our product candidates and related technology could be found invalid or unenforceable if challenged in court or before a patent office.

Issued patents may be challenged, narrowed, invalidated, or circumvented. We may from time to time need to resort to litigation (or other adversarial proceedings) to enforce or defend any patents or other intellectual property right owned by or licensed to us, or to determine or challenge the scope or validity of patents or other intellectual property rights of third parties. As enforcement of intellectual property rights is difficult, unpredictable, and expensive, we may fail in enforcing our rights—in which case our competitors may be permitted to use our technology without being enjoined, required to pay us any license fees, or compensate us for lost profits or reasonable royalty. In addition, litigation involving our patents carries the risk that one or more of our patents will be held invalid (in whole or in part, on a claim-by-claim basis) or held unenforceable. Such an adverse court ruling could allow third parties to commercialize technology covered by our patents we seek to enforce, such as those covering our product candidates and related methods, among other technologies, and then compete directly with us, without payment to us.

If we were to initiate legal proceedings against a third party to enforce a patent covering our product candidates or other technologies, the defendant could counterclaim that our patent is invalid and/or unenforceable, which is commonplace in patent litigation in the United States and in other foreign jurisdictions. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements for patentability, for example, lack of utility, novelty, obviousness, non-enablement, or lack of written description or as constituting unpatentable subject matter. Grounds for an unenforceability assertion could be an allegation that someone substantively involved in prosecution of the patent withheld but-for material information from the USPTO or engaged in affirmatively egregious misconduct, during prosecution, with a specific intent to deceive the USPTO.

The outcome following legal assertions of invalidity and unenforceability during patent litigation (or other adversarial proceedings) is unpredictable. With respect to the validity question, for example, we cannot be certain that there is no invalidating prior art, of which we and the patent examiner were unaware during prosecution. If a defendant were to prevail on a legal assertion of invalidity and/or unenforceability, we could lose at least part, and perhaps all, of the patent protection on our product candidate or other technology. Such a loss of patent protection could have a material adverse impact on our business. Even if we have valid and enforceable patents, these patents still may not provide protection against competing products or processes sufficient to achieve our business objectives. Patents and other intellectual property rights also will not protect our technology if competitors design around our protected technology without infringing our patents or other intellectual property rights.

If we are unsuccessful in defending against claims by competitors or others that we are infringing upon their intellectual property rights, our business could be materially harmed.

Our commercial success will depend, in part, on our ability to operate without infringing the proprietary rights of third parties. Other entities may have or obtain patents or other proprietary rights that could limit our ability to make, use, sell, offer for sale, or import a product candidate, a future approved product, or impair our competitive position. There may be issued patents and/or pending patent applications held by third parties that could be alleged as covering our product candidate, irrespective of the merits. Although we believe that these patents are not infringed, and/or are invalid and/or unenforceable, if a court should find that they cover our product candidates and we are unable to invalidate such patents, or if licenses for them are not available or on commercially reasonable terms, our business could be harmed, perhaps materially.

We believe that if such patents or patent applications were asserted against us, we would have counterclaims and defenses against such claims, including non-infringement, the affirmative defense of safe harbor designed to protect activity undertaken to obtain federal regulatory approval of a cell therapy, including under 35 U.S.C. § 271(e) and similar foreign exceptions to infringement, and defenses concerning patent invalidity and/or

 

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unenforceability. However, if such counterclaims and defenses are not successful and such patents are successfully asserted against us such that they are found to be valid and enforceable, and infringed, unless we obtain a license to such patents, which may not be available or on commercially reasonable terms or at all, we could be prevented from continuing to develop or commercialize our product candidate. We could also be required to pay substantial damages. We cannot confirm that we will ultimately prevail if any such third-party intellectual property is asserted against us.

In the biotechnology industry, significant litigation and other proceedings regarding patents, patent applications, trademarks, and other intellectual property rights have become commonplace. The types of situations in which we may become a party to such litigation or proceedings include:

 

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we or our collaborators may initiate litigation or other adversarial proceedings against third parties seeking to invalidate the patents held by those third parties or to obtain a judgment that our products or processes do not infringe those third parties’ patents;

 

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if our competitors file patent applications that claim technology also claimed by us or our licensors, we or our licensors may be required to participate in interference, opposition, or other proceedings to determine the priority of invention, which could jeopardize our patent rights and potentially provide a third party with a dominant patent position;

 

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if third parties initiate litigation claiming that our processes or products infringe their patent or other intellectual property rights, we and our collaborators will need to defend against such proceedings; and

 

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if a license to necessary technology is terminated, the licensor may initiate litigation claiming that our processes or products infringe or misappropriate their patent or other intellectual property rights and/or that we breached our obligations under the license agreement, and we and our collaborators would need to defend against such proceedings.

These lawsuits (or other adversarial proceedings) would be costly and could affect our results of operations and divert the attention of our management and scientific personnel. The cost of any patent litigation or other proceeding, even if resolved in our favor, could be substantial. Some of our competitors may be able to sustain the cost of such litigation and proceedings more effectively than we can because of their substantially greater resources. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have a material adverse effect on our ability to compete in the marketplace. Patent litigation and other proceedings may also absorb significant management time.

In addition, if the breadth or strength of protection provided by our or our present or future licensors’, collaborators’, or partners’ patents and patent applications is threatened, it could dissuade companies from collaborating with us to license, develop, or commercialize current or future product candidates. 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.

Third-party intellectual property right holders, including our competitors, may actively bring infringement claims against us. We may not be able to successfully settle, license (including on commercially acceptable terms), or otherwise resolve such potential infringement claims. If we are unable to successfully settle future claims on terms acceptable to us, we may be required to engage or continue costly, unpredictable, and time-consuming litigation and may be prevented from or experience substantial delays in marketing any approved products. If we fail in any such dispute, in addition to being forced to potentially pay damages, we or our collaborators may be temporarily or permanently prohibited from commercializing our product candidates that are held to be infringing or be forced to redesign product candidates so that we no longer infringe the third-party’s intellectual property rights. Any of these events, even if we were ultimately to prevail, could require us to divert substantial financial and management resources that we would otherwise be able to devote to our business, research, and development.

 

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The biotechnology industry has produced a significant number of patents, and it may not always be clear to industry participants, including us, which patents cover various types of products or methods of use. The coverage of patents is subject to interpretation by the courts, and the interpretation is not always uniform or predictable. If we are sued for patent infringement, we would need to demonstrate that our products or methods either do not infringe the patented claims of the relevant patent or that the patented claims are invalid, and we may not be able to do this. Proving invalidity can be 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, defend an infringement action, or challenge the validity 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, we may incur substantial monetary damages, encounter significant delays in bringing our product candidate to market, and be precluded from manufacturing or selling our product candidates.

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.

It is also possible that in our evaluation of third-party intellectual property, we failed to identify relevant patents or applications. We cannot guarantee that any of our patent searches or analyses, including but not limited to the identification of relevant patents, the scope of patented 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 product candidate in any jurisdiction.

The scope of a patented 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, which may negatively impact our ability to market our products. 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, which may negatively impact our ability to develop and market our product candidate. Our failure to identify and correctly interpret relevant patents may negatively impact our ability to develop and market our products.

For example, U.S. applications filed before November 29, 2000 and certain U.S. applications filed after that date that will not be filed outside the United States remain confidential until the patent issues. Patent applications in the United States and elsewhere are 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. Furthermore, we operate in a highly competitive field, and given our limited resources, it is unreasonable to monitor all patent applications purporting to claim broad coverage in the areas in which we are active. Additionally, pending patent applications which have been published can, subject to certain limitations, be later amended in a manner that could cover our product candidate or related technology. We cannot predict whether third parties will be able to successfully obtain claims or the breadth of such claims.

We may become involved in lawsuits involving our intellectual property, including patents, to protect or enforce our patents, which could be expensive, time consuming, and unsuccessful.

We may become a party to litigation and other adversarial proceedings or disputes involving intellectual property in the US and in other jurisdictions. Such litigation (or other adversarial proceedings or disputes) include instances where we are asserting our intellectual property against third parties, or we are defending

 

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against an allegation of infringement. Even if such litigation (or other adversarial proceedings or disputes) is resolved in our favor, litigation or other legal proceedings relating to intellectual property claims may cause us to incur significant expenses and could distract our technical and management personnel from their normal responsibilities. In addition, there will be public announcements of the results of hearings, motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, this could have a substantial adverse effect on the price of our common shares. Such litigation or proceedings and the legal costs associated with them, could substantially increase our operating losses and reduce our resources available for development activities. We may not have sufficient financial or other resources to adequately conduct such litigation or proceedings. Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their substantially greater financial resources. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have a material adverse effect on our ability to compete in the marketplace.

If we fail to comply with our obligations under our intellectual property licenses with third parties, we could lose license rights that are important to our business.

We are currently party to intellectual property license agreements. These license agreements impose, and we expect that future license agreements may impose, various obligations on us. For example, we have entered into patent and know-how license agreements with the Board of Regents of The University of Texas System that grant us the right to use certain technologies related to our clinical product candidates and related methods. If we fail to comply with our obligations under the licenses, the licensor may have the right to terminate their respective license agreements, in which event we might not be able to market any product that is covered by the agreements. Termination of the license agreements or reduction or elimination of our licensed rights may result in our having to negotiate new or reinstated licenses with less favorable terms, which could adversely affect our competitive business position and harm our business.

We have rights in some intellectual property that have been discovered through United States government funded programs and thus are subject to federal regulations such as “march-in” rights, certain reporting requirements, and a preference for U.S. industry.

We have rights in some intellectual property that was developed through U.S. government funded programs and thus are subject to federal regulations such as “march-in” rights, certain reporting requirements, and a preference for U.S. industry. For example, some of the intellectual property rights licensed to us under our M.D. Anderson License Agreement were generated using U.S. government funds. As a result, the U.S. government has certain rights to intellectual property embodied in certain current or future products pursuant to the Bayh-Dole Act of 1980. These U.S. government rights in certain inventions developed under government-funded programs include a non-exclusive, non-transferable, irrevocable worldwide license to use inventions for any governmental purpose. In addition, the U.S. government has the right to require us to grant exclusive, partially exclusive, or non-exclusive licenses to any of these inventions to a third party if the government determines that: (i) adequate steps have not been taken to commercialize the invention; (ii) government action is necessary to meet public health or safety needs; or (iii) government action is necessary to meet requirements for public use under federal regulations (also referred to as “march-in rights”). The U.S. government also has the right to take title to these inventions if the applicable licensor fails to disclose the invention to the government, elect title, and file an application to register the intellectual property within specified time limits. In addition, the U.S. government may acquire title to these inventions in any country in which a patent application is not filed within specified time limits. Intellectual property generated under U.S. government-funded programs is also subject to certain reporting requirements, compliance with which may require us, or the applicable licensor, to expend substantial resources. In addition, the U.S. government requires that any products embodying the subject invention or produced through the use of the subject invention be manufactured substantially in the U.S. This requirement can be waived if the owner of the intellectual property can show that reasonable but unsuccessful efforts have been made to grant licenses on similar terms to potential licensees that would be likely to manufacture substantially in the United States or that, under the circumstances, domestic manufacture is not commercially feasible. This

 

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preference for U.S. manufacturing may limit our ability to license the applicable patent rights on an exclusive basis under certain circumstances.

We may be unsuccessful in licensing or acquiring third-party intellectual property that may be required to develop and commercialize our product candidate.

We have rights, through patents that we have in-licensed or own, to the intellectual property to develop our product candidates. Because our programs may involve additional product candidates that may require the use of intellectual property or proprietary rights held by third parties, the growth of our business may depend in part on our ability to acquire, in-license, or use such intellectual property and proprietary rights of others. We may be unable to acquire or in-license any third-party intellectual property or proprietary rights or to do so on commercially reasonable terms. For example, we sometimes collaborate with public or private academic institutions to accelerate our research or development under written agreements with these institutions. Typically, these institutions provide us with an option to negotiate a license to any of the institution’s rights in technology resulting from the strategic collaboration. Regardless of such option, we may be unable to negotiate a license within the specified time frame or under terms that are acceptable to us, and the institution may license such intellectual property rights to third parties, potentially blocking our ability to pursue our development and commercialization plans. The same situation may occur with a present or future development partner.

The licensing and acquisition of third-party intellectual property and proprietary rights is a competitive area, and a number of more established companies are also pursuing strategies to license or acquire third-party intellectual property and proprietary rights that we may consider attractive or necessary. These established companies may have a competitive advantage over us due to their size and greater capital resources and development and commercialization capabilities. In addition, companies that perceive us to be a competitor may be unwilling to assign or license intellectual property and proprietary rights to us.

If we are unable to successfully acquire or in-license rights to required third-party intellectual property and proprietary rights or maintain our intellectual property and proprietary rights, we may have to cease development of the relevant program, product, or product candidate, which could have a material adverse effect on our business.

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.

The USPTO and various foreign patent offices require compliance with a number of procedural, documentary, fee payment, and other similar provisions during the patent prosecution and post grant or issuance. We employ reputable law firms and other professionals to help us comply. Additionally, periodic maintenance fees, renewal fees, annuity fees, and various other governmental fees on patents and/or patent applications will be due to the USPTO and various foreign patent offices at various points over the lifetime of our patents and/or patent applications. We rely on our outside counsel or our agents to pay these fees when due. In many cases, an inadvertent lapse can be cured by payment of a late fee or by other means in accordance with rules applicable to the particular jurisdiction. 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. Non-compliance events that could result in abandonment or lapse of a patent or patent application include failure to respond to official actions within prescribed time limits, non-payment of fees, and failure to properly legalize and submit formal documents. If such an event were to occur, it could have a material adverse effect on our business.

In addition, we may be responsible for the payment of patent fees for patent rights that we license from third parties. If any licensor of these patents does not itself elect to make these payments, and we fail to do so, we may be liable to the licensor for any costs and consequences of any resulting loss of patent rights. If we or our existing

 

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or future licensors fail to maintain the patents and patent applications covering our product candidates, our competitors might be able to enter the market, which would have an adverse effect on our business.

If we do not obtain protection under the Hatch-Waxman Amendments and similar foreign legislation for extending the term of patents covering each of our product candidates, our business may be materially harmed.

Patents typically have a limited lifespan. In the United States and in most ex-U.S. jurisdictions, if all maintenance fees are timely paid, the natural expiration of a patent is generally 20 years from its earliest non-provisional filing date, not including potential patent term extensions or adjustments that may be available in the United States, and under comparable laws applicable outside the United States, where certain conditions are met. Various extensions may be available, but the life of a patent, and the protection it affords, is limited. Even if patents covering our product candidates are obtained, once the patent life has expired for a product candidate, we may be open to competition from competitive cell therapies. Given the amount of time required for the development, testing, and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized. As a result, our owned and licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours, causing our revenue from applicable products to be reduced, possibly materially, and potentially harming our ability to recover our investment in such product or obtain a reasonable return on that investment.

Depending upon the timing, duration, and conditions of FDA marketing approval of our product candidates or any future product candidates, one or more of our U.S. patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984 (the “Hatch-Waxman Amendments”). The Hatch-Waxman Amendments permit a patent term extension of up to five years for a patent covering an approved product as compensation for effective patent term lost during the FDA regulatory review process. However, 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 length of the extension could be less than we request. If we are unable to obtain patent term extension or the term of any such extension is less than we request, the period during which we can enforce our patent rights for that product will be shortened and our competitors may obtain approval to market competing products sooner. As a result, our revenue from applicable products could be reduced, possibly materially.

We may be subject to claims by third parties asserting that our employees or we have misappropriated their intellectual property, or claiming ownership of what we regard as our own intellectual property.

As is common in the biotechnology and pharmaceutical industries, we employ individuals who were previously or are concurrently employed at other biotechnology or pharmaceutical companies, universities, and/or research institutions and the like, 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 or concurrent employers, or that patents and applications we have filed to protect inventions of these employees, even those related to our product candidate, are rightfully owned by their former or concurrent employer.

Litigation may be necessary to defend against these claims. Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to management. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel or sustain damages. Such intellectual property rights could be awarded to a third party, and we could be required to obtain a license from such third party to commercialize our technology or products. Such a license may not be available or on commercially reasonable terms or at all.

 

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Any trademarks we have obtained or may obtain may be infringed or successfully challenged, resulting in harm to our business.

We expect to rely on trademarks as one means to distinguish our product candidates that are approved for marketing from the products of our competitors. However, our 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 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. 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. Our efforts to enforce or protect our proprietary rights related to trademarks, trade secrets, domain names, copyrights or other intellectual property may be ineffective and could result in substantial costs and diversions of resources and could adversely affect our business, financial condition, and growth prospects.

In addition, any proprietary name we propose to use with any product candidates 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. The FDA typically conducts a review of proposed product names, including an evaluation of the potential for confusion with other product names. If the FDA objects to any of our proposed proprietary product names, we may be required to expend significant additional resources in an effort to identify an alternate proprietary product name that would qualify under applicable trademark laws, not infringe the existing rights of third parties, and be acceptable to the FDA.

Risks Related to Healthcare, Insurance and Legal Matters

Product liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of our product candidate.

We face an inherent risk of product liability exposure related to the testing of our product candidate in human trials and may face greater risk if we commercialize any products that we develop. Product liability claims may be brought against us by subjects enrolled in our trials, patients, healthcare providers, or others using, administering, or selling our products. If we cannot successfully defend ourselves against such claims, we could incur substantial liabilities. Regardless of merit or eventual outcome, liability claims may result in:

 

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decreased demand for any product candidate we may develop;

 

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withdrawal of trial participants;

 

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termination of clinical trial sites or entire trial programs;

 

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injury to our reputation and significant negative media attention;

 

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initiation of investigations by regulators;

 

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significant time and costs to defend the related litigation;

 

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substantial monetary awards to trial subjects or patients;

 

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diversion of management and scientific resources from our business operations; and

 

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the inability to commercialize any product candidates that we may develop.

While we currently hold product liability insurance coverage for clinical trials consistent with industry standards, the amount of coverage may not adequately cover all liabilities that we may incur. We may not be able to maintain insurance coverage at a reasonable cost or in an amount adequate to satisfy any liability that may

 

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arise. We intend to expand our insurance coverage for products to include the sale of commercial products if we obtain marketing approval for our product candidate, but we may be unable to obtain commercially reasonable product liability insurance. A successful product liability claim or series of claims brought against us, particularly if judgments exceed our insurance coverage, could decrease our cash and adversely affect our business and financial condition.

The successful commercialization of our product candidate or any future product candidates, if approved, will depend in part on the extent to which governmental authorities and health insurers establish coverage, adequate reimbursement levels, and favorable pricing policies. Failure to obtain or maintain coverage and adequate reimbursement for our products could limit our ability to market those products and decrease our ability to generate revenue.

The availability of coverage and the adequacy of reimbursement by governmental healthcare programs such as Medicare and Medicaid, private health insurers, and other third-party payors are essential for most patients to be able to afford prescription medications such as our product candidate or any future product candidates, if approved. Our ability to achieve coverage and acceptable levels of reimbursement for our products by third-party payors will have an effect on our ability to successfully commercialize those products. Accordingly, we will need to successfully implement a coverage and reimbursement strategy for any approved product candidate. Even if we obtain coverage for a given product by a third-party payor, the resulting reimbursement payment rates may not be adequate or may require co-payments that patients find unacceptably high. For more information, see the section of this information statement/prospectus entitled “Information Regarding Obsidian—Coverage, Pricing and Reimbursement” beginning on page 257 of this information statement/prospectus.

If we participate in the Medicaid Drug Rebate Program or other governmental pricing programs, in certain circumstances, our products would be subject to ceiling prices set by such programs, which could reduce the revenue we may generate from any such products. Participation in such programs would also expose us to the risk of significant civil monetary penalties, sanctions, and fines should we be found to be in violation of any applicable obligations thereunder.

Third-party payors increasingly are challenging prices charged for biopharmaceutical products and services, and many third-party payors may refuse to provide coverage and reimbursement for particular drugs when an equivalent generic drug or a less expensive therapy is available. It is possible that a third-party payor may consider our products as substitutable and offer to reimburse patients only for the less expensive product. Even if we are successful in demonstrating improved efficacy or improved convenience of administration with our products, pricing of existing drugs may limit the amount we will be able to charge for our products. These payors may deny or revoke the reimbursement status of a given 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. If reimbursement is not available or is available only at limited levels, we may not be able to successfully commercialize our products and may not be able to obtain a satisfactory financial return on products that we may develop.

There is significant uncertainty related to third-party payor coverage and reimbursement of newly approved products. In the United States, third-party payors, including private and governmental payors, such as the Medicare and Medicaid programs, play an important role in determining the extent to which new drugs will be covered. Some third-party payors may require pre-approval of coverage for new or innovative devices or drug therapies before they will reimburse healthcare providers who use such therapies. It is difficult to predict at this time what third-party payors will decide with respect to the coverage and reimbursement for our product candidate or any future product candidates.

Obtaining and maintaining reimbursement status is time-consuming, costly, and uncertain. The Medicare and Medicaid programs increasingly are used as models for how private payors and other governmental payors develop their coverage and reimbursement policies for drugs. However, no uniform policy for coverage and

 

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reimbursement for products exists among third-party payors in the United States. Therefore, coverage and reimbursement 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 will 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 in the first instance. Furthermore, rules and regulations regarding reimbursement change frequently, and, in some cases, at short notice, and we believe that changes in these rules and regulations are likely. For products administered under the supervision of a physician (including products administered in the clinical setting), obtaining coverage and adequate reimbursement may be particularly difficult because of the higher prices often associated with such drugs. Additionally, separate reimbursement for the product itself or the administration of the product, or the treatment or procedure in which the product is used may not be available, which may impact physician utilization.

Outside the United States, international operations are generally subject to extensive governmental price controls and other market regulations, and we believe the increasing emphasis on cost-containment initiatives in Europe and other countries has and will continue to put pressure on the pricing and usage of our product candidate or any future product candidates, if approved in these jurisdictions. In many countries, the prices of medical products are subject to varying price control mechanisms as part of national health systems. Other countries allow companies to fix their own prices for medical products but monitor and control company profits. Additional foreign price controls or other changes in pricing regulation could restrict the amount that we are able to charge for our products. Accordingly, in markets outside the United States, the reimbursement for our products may be reduced compared with the United States and may be insufficient to generate commercially reasonable revenue and profits.

Moreover, increasing efforts by governmental and third-party payors in the United States and abroad to cap or reduce healthcare costs may cause such organizations to limit both coverage and the level of reimbursement for newly approved products and, as a result, they may not cover or provide adequate payment for our products. We expect to experience pricing pressures in connection with the sale of any of our products due to the trend toward managed healthcare, the increasing influence of health maintenance organizations, and additional legislative changes. The downward pressure on healthcare costs in general, and prescription drugs, surgical procedures, and other treatments in particular, has become very intense. As a result, increasingly high barriers are being erected to the entry of new products.

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 and Medicaid beneficiaries, and may seek to increase such discounts at any time. Future regulation may negatively impact the price of our products, if approved. 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. In addition, the U.S. Supreme Court’s June 2024 decision to overturn established case law giving deference to regulatory agencies’ interpretations of ambiguous statutory language has introduced uncertainty regarding the extent to which the FDA’s regulations, policies and decisions may become subject to increasing legal challenges, delays and/or changes. If we are slow or unable to adapt to changes to existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, our product candidate may lose any marketing approval that may have been obtained and we may not achieve or sustain profitability, which would adversely affect our business.

We are subject to various U.S. federal, state, and foreign healthcare laws and regulations, which could increase compliance costs, and our failure to comply with these laws and regulations could harm our reputation, subject us to significant fines and liability, or otherwise adversely affect our business.

Our business operations and current and future arrangements with investigators, healthcare professionals, consultants, third-party payors, patient organizations, and customers may expose us to broadly applicable

 

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foreign, federal, and state fraud and abuse and other healthcare laws and regulations. These laws may constrain the business or financial arrangements and relationships through which we conduct our operations, including how we research, and plan to market, sell, and distribute any products for which we obtain regulatory approval. In particular, the research of our product candidates, as well as the promotion, sales and marketing of our product candidates is subject to extensive laws designed to prevent fraud, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, structuring and commission(s), certain customer incentive programs and other business arrangements generally. Activities subject to these laws also involve the improper use of information obtained in the course of patient recruitment for clinical trials. For more information about the applicable federal, state and foreign healthcare laws and regulations that may affect our ability to operate, see the section of this information statement/prospectus entitled “Information Regarding Galera—Government Regulation—Other U.S. Healthcare Laws and Compliance Requirements” beginning on page 201 of this information statement/prospectus.

Efforts to ensure that our current and future business arrangements with third parties will comply with applicable healthcare and privacy laws and regulations will involve ongoing substantial costs. It is possible that governmental authorities will conclude that our business practices, including certain agreements we have entered into with physicians who are paid, in part, in the form of stock or stock options, may not comply with current or future statutes, regulations, or case law involving applicable fraud and abuse or other healthcare laws and regulations. Due to the breadth of these laws, the narrowness of statutory exceptions and regulatory safe harbors available, and the range of interpretations to which they are subject, it is possible that some of our current or future practices might be challenged under one or more of these laws. If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant penalties, including civil, criminal, and administrative penalties, damages, fines, disgorgement, imprisonment, exclusion from participation in government-funded healthcare programs, such as Medicare and Medicaid, integrity oversight and reporting obligations, contractual damages, reputational harm, diminished profits and future earnings, and the curtailment or restructuring of our operations. Defending against any such actions can be costly and time-consuming and may require significant financial and personnel resources. Therefore, even if we are successful in defending against any such actions that may be brought against us, our business may be impaired. Further, if any of the physicians or other healthcare providers or entities with whom we expect to do business are found not to be in compliance with applicable laws or regulations, they may be subject to significant criminal, civil, or administrative sanctions, including exclusions from government-funded healthcare programs. If any of the above occur, our ability to operate our business and our results of operations could be adversely affected.

Current and future healthcare reform legislation or regulation may increase the difficulty and cost for us to obtain coverage for and commercialize our product candidate or any future product candidates and may adversely affect the prices we may set.

In the United States and some foreign jurisdictions, there have been, and we expect there will continue to be, a number of legislative and regulatory changes to the healthcare system, including cost-containment measures that may reduce or limit coverage and reimbursement for newly approved drugs and affect our ability to profitably sell our product candidate or any future product candidates for which we obtain regulatory approval. In particular, there have been and continue to be a number of initiatives at the U.S. federal and state levels that seek to reduce healthcare costs and improve the quality of healthcare. For example, the Inflation Reduction Act of 2022 (“IRA”) includes several provisions that will impact our business to varying degrees, including provisions that allow the U.S. government to negotiate Medicare Part B and Part D pricing for certain high-cost drugs and biologics without generic or biosimilar competition, among others. Our lead product candidate, OBX-115, is being developed in indications that may rely on Medicare reimbursement. Accordingly, these price-negotiation provisions may have a negative impact on our future revenue and profits. Further, the IRA also imposed rebates with respect to certain drugs and biologics covered under Medicare Part B or Medicare Part D to penalize price increases that outpace inflation.

 

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The One Big Beautiful Bill Act of 2025 (the “OBBBA”), also included significant reforms to Medicaid, including an estimated $1 trillion in reduced federal Medicaid spending from 2025 through 2034, the imposition of work requirements for certain adult enrollees, more frequent eligibility redeterminations, and increased cost-sharing for beneficiaries. These changes are expected to reduce overall Medicaid enrollment and access to care. Although the effect on our business is currently unknown, any decrease in the number of insured patients or reimbursement levels for our products could adversely affect our revenue and commercial prospects.

For more information, see the section of this information statement/prospectus entitled “Information Regarding Galera—Government Regulation—Healthcare Reform” beginning on page 203 of this information statement/prospectus.

Legally mandated price controls on payment amounts by third-party payors or other restrictions could harm our business, financial condition, results of operations, and prospects. In addition, regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other healthcare programs. This could reduce the ultimate demand for our product candidate and any future product candidates, if approved, or put pressure on our product pricing, which could negatively affect our business, financial condition, results of operations, and prospects.

We expect that these existing laws and other federal and state healthcare reform measures that may be adopted in the future may result in additional reductions in Medicare and other healthcare funding, more rigorous coverage criteria, new payment methodologies, and additional downward pressure on the price that we receive for any approved product. Reductions in reimbursement levels may negatively impact the prices we receive or the frequency with which our potential products are prescribed or administered. Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our product candidate or any future product candidates, if approved.

Failure to comply with laws and regulations related to the protection of research subjects could result in fines, penalties, and litigation, and have a material adverse effect upon our business.

We may be subject to regulation under international, federal, state, and local laws and regulations relating to the protection of research subjects. Federally funded human-subject research in the United States, including the collection of identifiable human biospecimens, is governed by 45 CFR Part 46, also known as the Health and Human Services Policy for Protection of Human Research Subjects or the “Common Rule.” Use of biospecimens in certain other research is subject to FDA regulations for the Protection of Human Subjects and Institutional Review Boards at 21 CFR Parts 50 and 56. While we believe that we are in compliance with these laws, we may not be aware of all such laws or may fail to properly audit and identify gaps in compliance. Similarly, we may find errors in our product candidate and processes and may fail to properly match the compliance requirements of our researchers to the compliance requirements of our suppliers. Failure of our company or our suppliers to comply with international, federal, state, and local laws and regulations could subject us to denial of the right to conduct business, fines, criminal penalties, and/or other enforcement actions which could have a material adverse effect on our business.

 

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Risks Related to Employee Matters and Managing Growth

Our ability to develop product candidates and our future growth depends on attracting, hiring, and retaining our key personnel and recruiting additional qualified personnel. If we are not successful in attracting, motivating, and retaining highly qualified personnel, we may not be able to successfully implement our business strategy. Additionally, we will need to grow the size of our organization, and we may experience difficulties in managing this growth.

We are highly dependent on members of our executive team. The loss of the services of any of them may adversely impact the achievement of our objectives. The loss of services of any of these individuals could delay or prevent the successful development of our product candidate, completion of our planned clinical trials, or the commercialization of our product candidate and any future product candidates.

Our success also depends upon the continued contributions of our key management and scientific personnel, many of whom have been instrumental for us and have substantial experience with developing therapies, identifying potential product candidates, and building the technologies related to the clinical development of our product candidate. Historically, we have experienced significant turnover in our research and development workforce and have operated with a limited team of scientific and technical personnel. Given the specialized nature of engineered TIL technology and our approach, there is an inherent scarcity of experienced personnel in these fields. As we continue developing our product candidate in our pipeline, we will require personnel with medical, scientific, or technical qualifications specific to each program. The loss of key personnel, in particular our scientists, would delay our research and development activities. Despite our efforts to retain valuable employees, members of our team may terminate their employment with us on short notice. The competition for qualified personnel in the biotechnology and biopharmaceutical industries is intense, and our future success depends upon our ability to attract, retain, and motivate highly skilled scientific, technical, and managerial employees. We face competition for personnel from other companies, universities, public and private research institutions, and other organizations. If we hire employees from competitors or other companies, their former employers may attempt to assert that these employees or we have breached legal obligations, resulting in a diversion of our time and resources and, potentially, damages. In addition, job candidates and existing employees often consider the value of the stock awards they receive in connection with their employment. If the perceived benefits of our stock awards decline, it may harm our ability to recruit and retain highly skilled employees. If our recruitment and retention efforts are unsuccessful in the future, it may be difficult for us to implement our business strategy, which would have a material adverse effect on our business.

As our development plans and strategies develop, and as we continue operating as a public company, we expect to need additional managerial, operational, marketing, sales, financial, and other personnel. Future growth would impose significant added responsibilities on members of management, including:

 

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managing our internal development efforts effectively, including the clinical and FDA review process for our current product candidates and any future product candidates we develop, while complying with our contractual obligations to contractors and other third parties; and

 

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improving our operational, financial, and management controls, reporting systems, and procedures.

Our future financial performance and our ability to advance development of and, if approved, commercialize our current product candidates and any future product candidates we develop will depend, in part, on our ability to effectively manage any future growth, and our management may have to divert a disproportionate amount of its attention away from day-to-day activities in order to devote a substantial amount of time to managing these growth activities.

We currently rely, and for the foreseeable future will continue to rely, in substantial part, on certain independent organizations, advisors, and consultants to provide certain services. We cannot assure you that the services of independent organizations, advisors, and consultants will continue to be available to us on a timely basis when needed, or that we can find qualified replacements. In addition, if we are unable to effectively manage

 

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our outsourced activities or if the quality or accuracy of the services provided by consultants is compromised for any reason, our clinical trials may be extended, delayed, or terminated, and we may not be able to obtain marketing approval of any current or future product candidates or otherwise advance our business. We cannot assure you that we will be able to manage our existing consultants or find other competent outside contractors and consultants on economically reasonable terms, or at all.

If we are not able to effectively expand our organization by hiring new employees and expanding our groups of consultants and contractors, we may not be able to successfully implement the tasks necessary to further develop and commercialize our current product candidates and any future product candidates we develop and, accordingly, may not achieve our research, development and commercialization goals.

Other General Risks

If the Galera merger and the Obsidian merger, taken together, do not qualify as a transaction described in Section 351 of the Code (or, in the case of the Obsidian stockholders, if the Obsidian merger, by itself, does not qualify as a reorganization within the meaning of Section 368(a) of the Code), Obsidian stockholders may recognize substantial taxable gain as a result of the mergers, and may be required to pay substantial additional U.S. federal income taxes, in the taxable year in which the transactions occur.

The Galera merger and the Obsidian merger, taken together, are intended to qualify as a transaction described in Section 351 of the Code. The Obsidian merger, by itself, is intended to qualify as a reorganization within the meaning of Section 368(a) of the Code. The positions of Galera and Obsidian are not binding on the IRS or the courts, and the parties do not intend to request a ruling from the IRS with respect to the transactions described in the merger agreement. Accordingly, there can be no assurance that the IRS will not challenge the qualification of the Galera merger and the Obsidian merger taken together, as a transaction described in Section 351 of the Code or that a court will not sustain such a challenge. If the IRS were to be successful in any such contention, or if for any other reason the Galera merger and the Obsidian merger, taken together, were not treated as a transaction described in Section 351 of the Code (and if the Obsidian merger does not qualify as a reorganization within the meaning of Section 368(a) of the Code), then the Obsidian stockholders would not be entitled to defer any portion of the gain realized as a result of receiving shares of Parent common stock in the transactions and may be required to pay substantial additional U.S. federal income taxes with respect to the taxable year in which such transactions occur.

Unfavorable global economic and geopolitical conditions could adversely affect our business, financial condition, stock price, and results of operations.

Our business could be adversely affected by unstable economic and political conditions within the United States and foreign jurisdictions, including as a result of an economic downturn and geopolitical events, such as changes in U.S. federal policy that affect the geopolitical landscape. Changes to policy implemented by the U.S. Congress, the current administration or any new administration have impacted and may in the future impact, among other things, the U.S. and global economy, international trade relations, unemployment, immigration, healthcare, taxation, the U.S. regulatory environment, inflation and other areas. For example, in 2025, the United States imposed tariffs on imports on its trading partners, including Canada, Mexico, the EU and China. Historically, tariffs have led to increased trade and political tensions, between not only the United States and China, but also between the United States and other countries in the international community. In response to tariffs, other countries have implemented retaliatory tariffs on U.S. goods. Political tensions as a result of trade policies could reduce trade volume, investment, technological exchange and other economic activities between major international economies, resulting in a material adverse effect on global economic conditions and the stability of global financial markets. Any changes in political, trade, regulatory, and economic conditions, including U.S. trade policies, could have a material adverse effect on our financial condition or results of operations.

The global credit and financial markets have also experienced extreme volatility and disruptions (including as a result of actual or perceived changes in interest rates, inflation, and macroeconomic uncertainties), which has

 

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included severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, high inflation, uncertainty about economic stability, global supply chain disruptions, and increases in unemployment rates. The financial markets and the global economy may also be adversely affected by the current or anticipated impact of military conflict, including the ongoing conflicts between Russia and Ukraine, the conflicts in the Middle East, terrorism, or other geopolitical events. There can be no assurance that further deterioration in credit and financial markets and confidence in economic conditions will not occur. A severe or prolonged economic downturn could result in a variety of risks to our business, including a decrease in the demand for our product candidates and in our ability to raise additional capital when needed on acceptable terms, if at all. For example, there has been proposed U.S. legislation that may restrict the ability of U.S. biopharmaceutical companies to purchase services or products from, or otherwise collaborate with, certain Chinese biotechnology companies of concern without losing the ability to contract with, or otherwise receive funding from, the U.S. government. We continue to assess the legislation as it develops to determine whether it could have an effect on our contractual relationships. Furthermore, any disruptions to our supply chain as a result of unfavorable global economic conditions, including due to geopolitical conflicts or public health crises, could negatively impact the timely execution of our ongoing and future clinical trials. In addition, current inflationary trends in the global economy may impact salaries and wages, costs of goods and transportation expenses, among other things, and recent and potential future disruptions in access to bank deposits or lending commitments due to bank failures may create market and economic instability. We cannot anticipate all of the ways in which the foregoing, and the current economic climate and financial market conditions generally, could adversely impact our business.

We, or the third parties upon whom we depend, may be adversely affected by natural disasters, public health crises, or other business interruptions and our business continuity and disaster recovery plans may not adequately protect us from a serious disaster.

Natural disasters or public health crises could severely disrupt our operations, and have a material adverse impact on our business, results of operations, financial condition, and prospects. If a natural disaster, power outage, public health crisis, or other event occurred that prevented us from conducting our clinical trials, releasing clinical trial results, or delaying our ability to obtain regulatory approval for our product candidate, it may be difficult or, in certain cases, impossible for us to continue our business for a substantial period of time.

Our information technology systems, or those used by our CROs or other contractors or consultants, may fail or suffer cybersecurity incidents or breaches, which could adversely affect our business.

Despite the implementation of security measures, our information technology systems and data and those of our current or future CROs or other contractors and consultants are vulnerable to compromise or damage from computer hacking, computer viruses, social engineering (e.g. phishing attacks) and malware (e.g., ransomware malicious software), fraudulent activity, employee misconduct, human error, telecommunication and electrical failures, natural disasters, or other cybersecurity attacks or accidents. Future acquisitions could expose us to additional cybersecurity risks and vulnerabilities from any newly acquired information technology infrastructure. Cybersecurity attacks are constantly increasing in frequency and sophistication and are made by groups and individuals with a wide range of motives (including industrial espionage) and expertise, including by organized criminal groups, “hacktivists,” nation states, and others. As a result of a continued hybrid working environment, we may also face increased cybersecurity risks due to our reliance on internet technology and the number of our employees who are working remotely, which may create additional opportunities for cybercriminals to exploit vulnerabilities. Furthermore, because the techniques used to obtain unauthorized access to, or to sabotage systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures. Further, as a company with an increasingly global presence, our systems are subject to frequent attacks, which are becoming more commonplace in the industry, including attempted hacking, phishing attempts, such as cyber-related threats involving spoofed or manipulated electronic communications, which increasingly represent considerable risk. Due to the nature of some of the attacks described herein, there is a risk that an attack may remain undetected for

 

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a period of time. Even if identified, we may be unable to adequately investigate or remediate cybersecurity incidents or breaches due to attackers increasingly using tools and techniques that are designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic evidence. While we continue to make investments to improve the protection of data and information technology, including in the hiring of IT personnel, periodic cyber security awareness trainings, and improvements to IT infrastructure and controls, and conduct regular testing of our systems, there can be no assurance that our efforts will prevent service interruptions or cybersecurity incidents or breaches.

We and certain of our service providers are from time to time subject to cyberattack attempts or incidents and cybersecurity incidents. Any cybersecurity incident could adversely affect our business, by leading to, for example, the loss of trade secrets or other intellectual property, demands for ransom or other forms of blackmail, or the unauthorized disclosure of personal or other sensitive information of our employees, clinical trial patients, customers, and others. Although to our knowledge we have not experienced any significant cybersecurity incident to date, if such an event were to occur, it could seriously harm our development programs and our business operations. We could be subject to cybersecurity incident or breach notification requirements, regulatory actions taken by governmental authorities, litigation under laws that protect the privacy of personal information, or other forms of legal proceedings, which could result in significant liabilities or penalties, result in substantial costs, and require attention from management. Further, a cybersecurity incident may disrupt our business or damage our reputation, which could have a material adverse effect on our business, prospects, operating results, share price and stockholder value, and financial condition. We could also incur substantial remediation costs, including the costs of investigating the incident, repairing, or replacing damaged systems, restoring normal business operations, implementing increased cybersecurity protections, and paying increased insurance premiums.

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. If a cybersecurity breach or other incident were to result in the unauthorized access to or unauthorized use, disclosure, release, or other processing of clinical trial data or personal data, it may be necessary to notify individuals, governmental authorities, supervisory bodies, the media, and other parties pursuant to privacy and security laws. Likewise, we rely on our third-party research institution collaborators for research and development of our product candidate and other third parties for the manufacture of our product candidate and to conduct clinical trials, and similar events relating to their information technology systems could also seriously harm our business. Any security compromise affecting us, our collaborators, or our industry, whether real or perceived, could harm our reputation, erode confidence in the effectiveness of our security measures, and lead to regulatory scrutiny. To the extent that any disruption or cybersecurity incident or breach were to result in a loss of, or damage to, our data or systems, or inappropriate disclosure of confidential or proprietary or personal information, we could incur liability, our competitive position could be harmed, and the further development and commercialization of our product candidate could be delayed, result in substantial costs and require attention from management.

If we fail to establish and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud. As a result, stockholders could lose confidence in our financial and other public reporting, which would harm our business and the trading price of our common stock.

We are not currently required to comply with the rules of the SEC implementing Section 404 of the Sarbanes-Oxley Act and are therefore not required to make a formal assessment of the effectiveness of our internal control over financial reporting for that purpose. Ensuring that we have adequate internal financial and accounting controls and procedures in place so that we can produce accurate financial statements on a timely basis is a costly and time-consuming effort that needs to be reevaluated frequently. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with generally accepted accounting

 

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principles. In connection with this offering, we intend to begin the process of documenting, reviewing, and improving our internal controls and procedures for compliance with Sections 302 and 404 of the Sarbanes-Oxley Act, which will require annual management assessment of the effectiveness of our internal control over financial reporting. Any failure to implement required new or improved controls, or difficulties encountered in their implementation could cause us to fail to meet our reporting obligations. In addition, any testing by us conducted in connection with Section 404 of the Sarbanes-Oxley Act, or any subsequent testing by our independent registered public accounting firm, may reveal deficiencies in our internal controls over financial reporting that are deemed to be material weaknesses or that may require prospective or retroactive changes to our financial statements or identify other areas for further attention or improvement. Inferior internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our stock.

We will be required to disclose changes made in our internal controls and procedures on a quarterly basis and our management will be required to assess the effectiveness of these controls annually. However, for as long as we are an “emerging growth company” or a non-accelerated filer, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act. We could be an emerging growth company for up to five years following completion of the mergers. An independent assessment of the effectiveness of our internal controls over financial reporting could detect problems that our management’s assessment might not. Undetected material weaknesses in our internal controls over financial reporting could lead to restatements of our financial statements and require us to incur the expense of remediation. When we lose our status as an “emerging growth company” and reach an accelerated filer threshold, our independent registered public accounting firm will be required to attest to the effectiveness of our internal control over financial reporting. The rules governing the standards that must be met for our management to assess our internal control over financial reporting are complex and require significant documentation, testing, and possible remediation. To comply with the requirements of being a reporting company under the Exchange Act, we may need to upgrade our information technology systems; implement additional financial and management controls, reporting systems, and procedures; and hire additional accounting and finance staff. If we or, if required, our auditors are unable to conclude that our internal control over financial reporting is effective, investors may lose confidence in our financial reporting and the trading price of our common stock may decline.

Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud.

Upon the completion of the mergers and concurrent financing, we will become subject to the periodic reporting requirements of the Exchange Act. We must design our disclosure controls and procedures to reasonably assure that information we must disclose in reports we file or submit under the Exchange Act is accumulated and communicated to management, and recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC. We believe that any disclosure controls and procedures, no matter how well-conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. For example, our directors or executive officers could inadvertently fail to disclose a new relationship or arrangement causing us to fail to make a required related party transaction disclosure. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls. Accordingly, because of the inherent limitations in our control system, misstatements due to error or fraud may occur and not be detected.

Our ability to use our net operating loss carryforwards and other tax attributes may be limited.

As of December 31, 2025 we had approximately $186.5 million of federal net operating losses (“NOLs”). Federal NOLs generated in taxable years ending after December 31, 2017, may be carried forward indefinitely, but the deductibility of such federal NOLs is limited to 80% of our taxable income. As of December 31, 2025, we

 

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had approximately $171.0 million of state NOLs. Of the state NOLs, some are of indefinite life, but most are of definite life with various expiration dates, beginning in 2037. As of December 31, 2025, we had approximately $17.1 million of federal research and development tax credit carryforwards. Federal tax credit carryforwards expire at various dates, beginning in 2037. As of December 31, 2025, we had approximately $7.7 million of state research and development tax credit carryforwards. The state tax credits, which have various carryforward rules, begin to expire in 2031. Our ability to utilize these NOLs and tax credits to offset future tax liabilities depends on the successful development of our product candidates and future financial performance.

Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the “Code”), if a corporation undergoes an “ownership change,” generally defined as a greater than 50 percentage point change (by value) in its equity ownership by “5 percent shareholders” over a three-year period, the corporation’s ability to use its pre-change NOLs and other pre-change tax attributes (such as research and development tax credits) to offset its post-change income or taxes may be limited. A corporation that experiences an ownership change will generally be subject to an annual limitation on the use of its pre-ownership change NOLs equal to the value of the corporation immediately before the ownership change, multiplied by the long-term tax-exempt rate (subject to certain adjustments). We may have experienced ownership changes in the past and may experience ownership changes as a result of our acquisitions of assets and as a result of the mergers and concurrent financing and/or subsequent shifts in our stock ownership (some of which are outside our control). There is also a risk that due to regulatory changes, such as suspensions on the use of NOLs by federal or state taxing authorities or other unforeseen reasons, our existing NOLs could expire or otherwise be unavailable to reduce future income tax liabilities. As a result, our ability to use our pre-change NOLs and tax credits to offset future taxable income, if any, could be subject to limitations. Similar provisions of state tax law may also apply. As a result, even if we attain profitability, we may be unable to use a material portion of our NOLs and tax credits.

Changes in tax law could adversely affect our business and financial condition.

The rules dealing with U.S. federal, state, and local income taxation are constantly under review by persons involved in the legislative process and by the IRS and the U.S. Treasury Department. Changes to tax laws (which changes may have retroactive application), including with respect to NOLs and research and development tax credits, could adversely affect us or holders of our common stock. For example, the OBBBA was signed into law on July 4, 2025 and made significant changes to U.S. federal tax law. Under Section 174 of the Code, in taxable years beginning after December 31, 2021, expenses that are incurred for research and development performed outside the U.S. will be capitalized and amortized, which may have an adverse effect on our cash flow. The OBBBA provides that for taxable years beginning after December 31, 2024, expenses that are incurred for research and development performed in the United States may, at the taxpayer’s election, be immediately deducted or capitalized and amortized. In addition, the OBBBA provides that for taxable years beginning after December 31, 2021 and before January 1, 2025, certain eligible taxpayers generally may elect to retroactively deduct expenses for research and development performed in the United States in such taxable years by filing amended tax returns for such taxable years, and all other taxpayers that are not eligible to make such an election and that amortized expenses for research and development performed in the United States in such taxable years generally may elect to accelerate and deduct the remaining unamortized amounts of such research and development expenses (i) in the first taxable year beginning after December 31, 2024, or (ii) ratably over the two-taxable year period beginning with the first taxable year beginning after December 31, 2024. In recent years, many changes to tax laws have been made and changes are likely to continue to occur in the future. Future changes in tax laws could have a material adverse effect on our business, cash flow, financial condition, or results of operations. We urge investors to consult with their legal and tax advisers regarding the implications of potential changes in tax laws on an investment in our common stock.

 

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We may become involved in securities class action litigation, which is expensive, and could divert management’s attention and harm our business, and insurance coverage may not be sufficient to cover all costs and damages.

In the past, securities class action litigation has often followed certain significant business transactions, such as the sale of a company or announcement of any other strategic transaction, or the announcement of negative events, such as negative results from clinical trials. These events may also result in or be concurrent with investigations by the SEC. We may be exposed to such litigation or investigation even if no wrongdoing occurred. Litigation and investigations are usually expensive and divert management’s attention and resources, which could adversely affect our business and cash resources and our ability to consummate a potential strategic transaction or the ultimate value our stockholders receive in any such transaction.

 

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MARKET PRICE AND DIVIDEND INFORMATION

Galera

Market Information

Galera common stock is quoted on the OTCQB tier of the OTC Markets, Inc. under the symbol “GRTX.” Galera common stock has been thinly traded on the OTCQB and there can be no assurance that a liquid market for Galera common stock will ever develop. The table below includes activity from the fiscal years ended December 31, 2025 and 2024 and for the first and second quarter of 2026 and the third quarter of 2026 to date:

 

Fiscal Year Ended December 31, 2024		High				Low
First Quarter			0.29				0.13
Second Quarter			0.24				0.06
Third Quarter			0.15				0.05
Fourth Quarter			0.08				0.02
Fiscal Year Ended December 31, 2025		High				Low
First Quarter			0.06				0.03
Second Quarter			0.04				0.02
Third Quarter			0.03				0.01
Fourth Quarter			0.03				0.01
Fiscal Year Ending December 31, 2026		High				Low
First Quarter			0.06				0.02
Second Quarter			[	]			[	]
Third Quarter (through [ ], 2026)			[	]			[	]

Holders

As of June 22, 2026 there were approximately 30 record holders of Galera common stock. The number of record holders was determined from the records of Galera’s transfer agent and does not include beneficial owners of Galera common stock whose shares are held in the names of various security brokers, dealers or registered clearing agencies.

Transfer Agent and Registrar

Galera has appointed Equiniti to act as the transfer agent of its common stock.

Dividend Policy

Galera currently intends to retain all of its future earnings, if any, to finance the growth and development of its business. Galera has never declared or paid cash dividends on its common stock and does not intend to pay any cash dividends on its common stock for the foreseeable future. Additionally, the proposal to pay future dividends to Galera stockholders will effectively be at the sole discretion of the Galera Board after taking into account various factors the Galera Board deems relevant, including Galera’s business prospects, capital requirements, financial performance and new product development.

Obsidian

Historical market price information for Obsidian common stock is not provided because there is no public market for Obsidian common stock. For information regarding Obsidian’s liquidity and capital resources, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Obsidian—Liquidity and Capital Resources.”

 

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THE GALERA STOCKHOLDER CONSENT

Galera has obtained stockholder approval of the Galera merger and adoption of the merger agreement. Under the DGCL and the Galera Restated Certificate of Incorporation (as amended, the “Galera Charter”), no further vote or consent of any other stockholder of Galera is necessary to approve the Galera merger and adopt the merger agreement.

By way of a unanimous consent of the Galera Board dated April 13, 2026, the Galera Board approved and adopted the Galera merger and the merger agreement and determined that the Galera merger and the merger agreement are in the best interests of Galera and its stockholders. The Galera Board also recommended that the stockholders of Galera authorize, adopt and approve the Galera merger and merger agreement. Pursuant to the Galera Charter and applicable law, the holders of Galera common stock are entitled to one vote per share on all matters voted upon by Galera stockholders. On or before [ ], 2026, in accordance with the DGCL and the Galera Charter, stockholders of Galera holding a majority of the outstanding shares of Galera common stock acted by written consent to adopt the merger agreement and each of the transactions contemplated thereby. As of that date, Galera had outstanding [ ] shares of common stock. As of the date of execution, the holders executing the Galera written consent represented approximately [ ]% of the outstanding Galera voting capital stock.

As a result, in accordance with the DGCL and the Galera Charter, the Galera merger and the merger agreement were approved and adopted by the requisite holders of the outstanding shares of capital stock of Galera entitled to vote on this matter.

Notice Under Section 228 of the DGCL

This information statement/prospectus serves as notice to Galera stockholders pursuant to Section 228(e) of the DGCL of the approval of the Galera merger and the merger agreement by less than unanimous consent of stockholders.

 

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THE MERGERS

The following is a discussion of the mergers and the material terms of the merger agreement relating to the mergers. The description in this section and elsewhere in this information statement/prospectus is qualified in its entirety by reference to the complete text of the merger agreement. You should read carefully the entire information statement/prospectus, including the merger agreement in its entirety, a copy of which is attached as Appendix A to this information statement/prospectus. This summary does not purport to be complete and may not contain all of the information about the merger agreement or the transactions contemplated thereby that is important to you. This section is not intended to provide you with any factual information about Galera or Obsidian. Such information can be found elsewhere in this information statement/prospectus and in the public filings Galera makes with the SEC, as described in the section entitled “Where You Can Find More Information” beginning on page 356 of this information statement/prospectus.

Terms of the Merger

The Mergers

At the Obsidian merger effective time, Merger Sub 1 will merge with and into Obsidian, at which time the separate existence of Merger Sub 1 will cease and Obsidian will survive the Obsidian merger as a wholly owned subsidiary of Parent (the “Obsidian surviving corporation”). Immediately following the Obsidian merger effective time, at the Galera merger effective time, Parent and Galera will cause Merger Sub 2, a wholly owned subsidiary of Parent, to merge with and into Galera, at which time the separate existence of Merger Sub 2 will cease and Galera will survive the Galera merger as a wholly owned subsidiary of Parent (the “Galera surviving corporation”). As a result, among other things, Parent will become the ultimate parent company of Obsidian, Galera and each of their respective subsidiaries.

Terms of the Mergers

Each of the Galera Board, Obsidian Board and Parent Board has approved the merger agreement, which governs the terms and conditions of the mergers.

At the Obsidian merger effective time, each share of Obsidian common stock issued and outstanding immediately prior to the Obsidian merger effective time (and after giving effect to the Obsidian preferred stock conversion, the exercise of the Banc of California, Inc. Warrant (as defined below), and the conversion of Obsidian convertible notes (if any)) will be converted into the right to receive a number of shares of Parent common stock calculated on the basis of the Obsidian exchange ratio (as described in the section titled “The Merger Agreement – Merger Consideration – Obsidian Exchange Ratio”). Further, the certificate of incorporation of the Obsidian surviving corporation will be amended and restated at or prior to the Obsidian merger effective time as set forth in the Obsidian certificate of merger and the bylaws of the Obsidian surviving corporation will be amended and restated to be identical to the bylaws of Merger Sub 1 as in effect immediately prior to the Obsidian merger effective time until thereafter amended in accordance with Delaware law and as provided in the Obsidian surviving corporation’s organizational documents.

Each share of Galera common stock issued and outstanding immediately prior to the Galera merger effective time (and after giving effect to the Galera preferred stock conversion and the Galera pre-funded warrant exchange (as defined below)) will be converted into the right to receive a number of shares of Parent common stock equal to the Galera exchange ratio (as described in the section titled “The Merger Agreement—Merger Consideration—Galera Exchange Ratio”). Further, the certificate of incorporation of the Galera surviving corporation will be amended and restated as set forth in the Galera certificate of merger and the bylaws of the Galera surviving corporation will be amended and restated to be identical to the bylaws of Merger Sub 2 as in effect immediately prior to the Galera merger effective time until thereafter amended in accordance with Delaware law and as provided in the Galera surviving corporation’s organizational documents.

 

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Following the Galera merger effective time, Parent will take all actions reasonably necessary so that the certificate of incorporation of Parent will remain in effect, until thereafter amended as provided by Delaware law, provided, however, that at or prior to the Galera merger effective time, Parent will file one or more amendments to its certificate of incorporation to change its name to “Obsidian Therapeutics, Inc.” and make such other changes as are agreeable to Obsidian.

Pre-Merger Obsidian Conversions

Immediately prior to the Obsidian merger effective time, all issued and outstanding shares of Obsidian preferred stock, including any issued and outstanding Obsidian Series A-1 Preferred Stock, Series A-2 Preferred Stock, Series A-3 Preferred Stock, Series B Preferred Stock, and Series C Preferred Stock, will be converted to Obsidian common stock in accordance with the organizational documents of Obsidian (the “Obsidian preferred stock conversion”). In addition, prior to the Obsidian merger effective time, Obsidian anticipates that (a) the Obsidian board (or a committee thereof) will adopt resolutions to deem any unexercised portion of its outstanding Obsidian Banc of California, Inc. warrants automatically exercised in accordance with the terms of the Obsidian Banc of California, Inc. warrants and, upon automatic exercise, terminate the warrants in full and (b) to the extent that Obsidian undertakes a Permitted Obsidian Bridge Financing, any convertible notes issued in connection therewith will be converted into shares of Obsidian common stock.

Pre-Merger Galera Conversions

Immediately following the Obsidian merger effective time but immediately prior to the Galera merger effective time, all Galera preferred stock, including all shares of Series B preferred stock outstanding and Series C preferred stock issued in the concurrent financing, will be converted into Galera common stock in accordance with the organizational documents of Galera (the “Galera preferred stock conversion”). In addition, (a) prior to the Galera merger effective time, the issued and outstanding Galera Pre-Funded Warrants will be exchanged for shares of Galera common stock in accordance with the terms thereof (the “Galera pre-funded warrant exchange”) and (b) at the Galera merger effective time, (i) each outstanding and unexercised Galera Exchangeable Warrant will, whether or not vested, become a warrant to purchase shares of Parent common stock in accordance with the terms thereof and without any further action by Parent or Galera and (ii) each outstanding and unexercised Galera Terminable Warrant will, whether or not vested, be terminated in accordance with the terms thereof.

Background of the Mergers

The following chronology summarizes the key meetings and events that led to the signing of the merger agreement. The following chronology does not purport to catalogue every conversation among members of the Galera Board, Obsidian, Galera’s representatives, Obsidian’s representatives and other parties.

Following the FDA’s determination in August 2023 that an additional Phase 3 clinical trial would be required to advance regulatory approval for Galera’s then lead product candidate, the Galera Board determined that continued development of that product candidate was not feasible in light of Galera’s then-current resources and Galera began to wind down its commercial readiness efforts, reduced headcount and publicly announced that it was reviewing strategic alternatives in an effort to enhance stockholder value. On September 4, 2024, Galera was delisted from Nasdaq and Galera’s common stock began trading on the OTC Pink Market.

Following the conclusion of its review of strategic alternatives in the third quarter of 2024 without a viable strategic alternative that would enhance stockholder value being identified, the Galera Board sought stockholder approval for an orderly wind down and liquidation of Galera . At a special meeting of stockholders held on October 17, 2024, Galera’s stockholders rejected the proposed plan of liquidation.

Throughout the remainder of 2024, the Galera Board with the assistance of Galera’s management, continued to explore what, if any, other alternatives were available for Galera in light of its discontinued business activities

 

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and limited resources. Following discussions with a number of potential counterparties, on December 30, 2024, in an effort to provide Galera with a viable path to restarting its development efforts Galera acquired Nova Pharmaceuticals, Inc. (“Nova”), a privately-held biotechnology company advancing a pan-inhibitor of nitric oxide synthase to treat patients with highly resistant forms of breast cancer, including metaplastic breast cancer and other refractory subsets of triple-negative breast cancer. In connection with the Nova acquisition, a syndicate of investors led by Ikarian Capital invested approximately $2.9 million in Galera.

Following the closing of the Nova acquisition, the Galera Board sought the additional financing necessary to pursue its new development programs and to enable Galera to regain its listing on Nasdaq. Despite extensive third party outreach by Galera and its advisors throughout the first seven months of 2025, the Galera Board was unable to identify a viable financing transaction.

On January 21, 2025, the Galera Board met with members of Galera’s management and representatives of Sidley Austin LLP (“Sidley”) present. At that meeting, the Galera Board reviewed Galera’s operations following its acquisition of Nova, discussed Galera’s research and development strategy and reviewed Galera’s financing and anticipated capital needs through 2026. Following such meeting the Galera Board continued its efforts to secure additional financing and explore strategic alternatives and directed members of Galera’s management team to continue looking for financing and other strategic alternatives.

On July 18, 2025, the Galera Board met with members of Galera’s management and representatives of Sidley present. At that meeting, the Galera Board received an update regarding Galera’s programs and assets, including Galera’s potential path to regaining its Nasdaq listing, chemistry, manufacturing and controls activities and intellectual property position and plans. The Galera Board also reviewed Galera’s financial condition and the status of Galera’s fundraising efforts and discussed the process and timing for a potential dissolution of Galera, including the Galera Board’s fiduciary duties if Galera were to potentially become insolvent. The Galera Board directed members of Galera’s management team to continue looking for financing and other strategic alternatives.

Between July 18, 2025 and August 27, 2025, the Galera Board, together with Galera’s management and advisors, actively explored financing and other strategic alternatives for Galera. Based on feedback from potential financing sources, the Galera Board determined that, for any financing transaction to be viable, Galera would need to reduce the aggregate amount of its royalty obligations and identify an actionable path to regaining its Nasdaq listing. Galera also evaluated potential financing alternatives for its tilarginine program, but concluded that such financing opportunities were not feasible at that time. Accordingly, the Galera Board determined that, in order to improve Galera’s ability to pursue a viable financing or strategic transaction, Galera would need to reduce its outstanding royalty obligations and directed management to explore potential asset sale and other strategic transactions that could facilitate the removal of such obligations from Galera’s balance sheet.

On August 27, 2025, Galera and Clarus IV Galera Royalty AIV, L.P., an affiliate of Blackstone Life Sciences (“Blackstone”), entered into the Second Amendment to the Royalty Agreement, as amended, that the parties initially entered into on November 14, 2018. Pursuant to the Second Amendment, Galera and Blackstone agreed to reduce, from a high single-digit percentage to 4%, the royalty payable to Blackstone on (i) worldwide net sales of avasopasem and rucosopasem; and (ii) all amounts received by Galera or its affiliates, licensees and sublicensees with respect to product-related damages during the royalty period.

On September 12, 2025, the Galera Board met with members of Galera’s management and representatives of Sidley present. At that meeting, management reviewed Galera’s intellectual property portfolio for its products, including avasopasem manganese, rucosopasem, and tilarginine, and updated the Galera Board on the status of Galera’s ongoing review of strategic alternatives. Management also informed the Galera Board that Galera had received two term sheets relating to potential licensing or disposition transactions involving avasopasem in different fields of use, one of which was from Biossil, and reviewed the terms of the proposed transactions. Following discussion, the Galera Board authorized management to seek to negotiate definitive agreements with Biossil and another potential counterparty, and authorized management to seek a 120-day exclusivity period

 

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under the Biossil term sheet. Galera’s management also updated the Galera Board regarding Galera’s programs and assets, reviewed Galera’s finances and ongoing fundraising efforts and discussed the process and timing for a potential dissolution of Galera.

On September 30, 2025, the Galera Board met with members of Galera’s management and representatives of Sidley present. At that meeting, the Galera Board received a financial update. The Galera Board also discussed the timing for a potential dissolution of Galera and was advised that, based on the analysis presented, the dissolution process could take approximately two months from the time the Galera Board resolved to dissolve Galera. Galera’s management then reviewed the terms and status of the proposed Biossil transaction, noting that definitive documentation for the Biossil transaction was nearly agreed on the terms previewed to the Galera Board. Following discussion and deliberation, the Galera Board unanimously (i) determined that the terms and conditions of the proposed Biossil transaction were fair, reasonable and in the best interest of Galera and its stockholders; and (ii) authorized Galera’s management to finalize and enter into the definitive documentation on the terms discussed.

On October 15, 2025, Galera and Biossil entered into the Supportive Care Product Agreement and closed the Supportive-Care Product Divestiture.

Following the Supportive-Care Product Divestiture, Galera redoubled its efforts to explore options to relist the Galera common stock on Nasdaq, including by pursuing a potential reverse merger transaction. In addition, members of the Galera Board and Galera’s management continued to explore potential financing alternatives, including potential transactions to monetize its tilarginine product.

On November 3, 2025, Galera commenced a process to solicit third party indications of interest for a financing or reverse merger transaction. Over the following 14 weeks, process letters were ultimately sent to 13 investment banks, 6 investment funds and 6 law firms. In addition to discussions with Obsidian, Company A and Company B (each as further described below), the process resulted in Galera engaging in preliminary discussions with two other potential counterparties in February 2026. No non-disclosure agreements were entered with these two potential counterparties and discussions did not progress beyond initial stages, as the Galera Board determined that these counterparties did not present compelling concurrent financing opportunities or transactions with sufficient certainty of closing.

On November 4, 2025, the Galera Board met with members of Galera’s management present. At that meeting, Galera’s management discussed its efforts to finalize Galera’s financial statements reflecting the assumption by Biossil of Galera’s royalty obligations to Blackstone and also potentially remove the going concern qualification. The Galera Board discussed the importance of finalizing the updated financial statements to Galera’s ongoing fundraising efforts, and discussed the status of Galera’s efforts to identify a potential financing transaction or reverse merger.

On December 1, 2025, Galera received a written non-binding indication of interest from a potential counterparty referred to as Company A with respect to a potential strategic transaction with Galera. On December 2, 2025, Company A and Galera executed a non-disclosure agreement and entered into term sheet negotiations with respect to a potential reverse merger transaction and a concurrent financing with Company A. The non-disclosure agreement with Company A did not contain a “standstill” provision. Discussions and negotiations continued with Company A up until the execution of a term sheet with Obsidian on March 13, 2026 (as further described below). Company A was concurrently pursuing other potential transactions, which provided less visibility into a potential timeline for a transaction and the Galera Board subsequently determined that a transaction with Company A did not provide sufficient certainty of execution.

On December 18, 2025, the Galera Board met with members of Galera’s management and representatives of Sidley present. At that meeting, the Galera Board discussed Galera’s potential strategic alternatives and the process and expected timing for those alternatives. In order to remain informed as Galera’s strategic alternatives and related discussions evolved, the Galera Board determined to schedule weekly update calls for the foreseeable

 

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future, subject to cancellation if no significant developments had occurred since the prior meeting. The Galera Board also received an executive summary regarding the status of the ongoing tilarginine study.

On January 6, 2026, Galera’s management determined that Galera’s December 31, 2025, balance sheet would reflect Biossil’s assumption of the Blackstone royalty obligations in connection with the Supportive-Care Product Divestiture. The Galera Board determined that the removal of those obligations from Galera’s balance sheet would improve Galera’s prospects for pursuing a reverse merger transaction.

On January 20, 2026, the Galera Board met with Galera’s management and representatives of Sidley present. At that meeting, the Galera Board discussed Galera’s efforts to pursue a strategic alternative, with a particular focus on a potential reverse merger transaction involving a privately held company. The Galera Board reviewed the timing and cost of such a transaction in light of Galera’s limited cash resources. Representatives of Sidley also reviewed with the Galera Board a proposed timeline for effecting a reverse merger and a plan to return Galera to listing on Nasdaq.

On January 20, 2026, as part of Galera’s solicitation efforts, members of the Galera Board contacted Leerink Partners LLC (“Leerink Partners”) who, later that same day, informed Galera that they had a client who may be interested in a potential reverse merger transaction.

On February 12, 2026, Galera filed a Certificate of Amendment to the Certificate of Designation of the Galera Series B preferred stock with the Secretary of State of the State of Delaware. The amendment provides that, in the sole discretion of the Galera Board, Galera may elect to convert, in whole or in part, outstanding shares of the Galera Series B preferred stock into a number of shares of Galera common stock calculated based on a conversion rate set forth in such Certificate of Designation. In response to feedback received from third parties during Galera’s solicitation process, the Galera Board determined that the amendment would enhance Galera’s financing prospects.

On February 13, 2026, Galera received a non-binding letter of intent from a potential counterparty referred to as Company B with respect to a potential strategic transaction with Galera, after an introduction by an investment bank. The letter of intent from Company B proposed a reverse merger transaction with a concurrent financing. Galera and Company B engaged in discussions and negotiations thereafter, on a non-confidential basis. Discussions and negotiations continued with Company B up until the execution of a term sheet with Obsidian on March 13, 2026 (as further described below).

On February 19, 2026, members of the Galera Board informed Leerink Partners of Galera’s continued interest in pursuing a potential reverse merger transaction. The following day, on February 20, 2026, Leerink Partners contacted members of the Galera Board and informed them that the same Leerink Partners client (later identified as Obsidian) continued to show interest in pursuing a potential transaction with Galera.

Between February 21, 2026 and March 5, 2026, Galera had several teleconference calls with representatives of Sidley and Leerink Partners regarding the viability of listing the combined company on Nasdaq. The Galera Board and Sidley discussed the potential transactions with Company A, Company B and Obsidian, each of which contemplated a reverse merger transaction with a concurrent financing. The Galera Board determined that a potential transaction with a privately held company with strong clinical results, management team and an institutional investor base offered potential value to Galera and its stockholders.

At a meeting of the Galera Board on March 3, 2026, Galera’s management updated the Galera Board with respect to its preliminary discussions with Obsidian as well as of the status of its discussions with Company A and Company B, each of which contemplated a reverse merger transaction with a concurrent financing. The Galera Board directed Galera’s management to continue pursuing discussions with Obsidian, Company A and Company B, and to keep the Galera Board informed regarding any material developments with respect to other potential strategic alternatives.

 

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Leerink Partners facilitated the execution of a mutual non-disclosure agreement between Galera and Obsidian on March 6, 2026, following which Leerink Partners disclosed Obsidian’s name and other initial information, including Obsidian’s capitalization table, funding to date and commitments for future funding. The non-disclosure agreement between Galera and Obsidian did not contain a “standstill” provision. Following execution of the mutual non-disclosure agreement, each of Galera and Obsidian provided the other party with limited non-public diligence information. The Galera Board determined that Obsidian presented strong clinical results, management team and an institutional investor base with potential to enhance stockholder value and directed Galera’s management to pursue further diligence of Obsidian.

On March 6, 2026, Obsidian sent Galera a non-binding letter of intent with an ascribed valuation of Galera of $11.8 million and an ascribed valuation of Obsidian of $515 million, with an implied ownership interest in the combined company of approximately 1.5% for existing Galera securityholders. Obsidian’s proposal also contemplated a $200 million financing concurrent with the consummation of the reverse merger transaction.

Between March 6, 2026 and March 13, 2026, Galera, Obsidian and their respective advisors held a number of teleconference calls during which they discussed, among other things, diligence of both Galera and Obsidian, investor support, valuation, structural considerations regarding the listing on Nasdaq, Galera’s conversion of the Galera Series B preferred stock, and other procedures to announce and close the transactions.

On March 9, 2026, Galera executed a non-disclosure agreement with Company B, which did not include a “standstill” provision. Galera and Company B entered into the non-disclosure agreement with the intent to pursue discussions and negotiations on a confidential basis. The Galera Board subsequently determined that a potential transaction with Company B did not provide financing possibilities as strong as those potentially available with Obsidian, and further discussions with Company B did not materialize.

On March 12, 2026, Galera received from Leerink Partners the first draft of a non-binding term sheet relating to the proposed transaction with Obsidian. Later that day, noting the lengthy and diligent search for strategic alternatives for Galera to realize value for Galera stockholders and following the Galera Board’s evaluation of Obsidian, its business and the proposed transaction, the Galera Board unanimously (i) determined that the proposed reverse merger transaction with Obsidian and the concurrent financing contemplated by the non-binding term sheet offered greater value to Galera than any other potential transaction proposed to Galera; and (ii) approved the non-binding term sheet in substantially the form presented to the Galera Board. The non-binding term sheet provided for, among other things, a “top-hat” reverse merger structure, pursuant to which Galera and Obsidian stockholders would exchange their respective equity interests for shares of a newly formed parent company and Galera and Obsidian would each become wholly owned subsidiaries of such parent company, a concurrent financing of approximately $200 million and the issuance of contingent value rights to Galera stockholders with respect to certain proceeds from Galera’s legacy assets and related intellectual property. The Galera Board determined to proceed with a transaction with Obsidian instead of a transaction with Company A or Company B because the proposed transaction with Obsidian presented stronger demonstrated investor interest in the concurrent financing and a clearer pathway toward receiving regulatory approval for the transaction.

On March 14, 2026, Galera and Obsidian entered into a non-binding term sheet with respect to the proposed reverse merger transaction and related concurrent private placement financing, which provided for a 45-day exclusivity period.

On March 16, 2026, as discussions regarding the proposed transaction with Obsidian continued, Galera received from Leerink Partners a draft placement agent engagement letter relating to the proposed concurrent financing.

 

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During the period commencing in March 2026 through the execution of the merger agreement on April 14, 2026, each of Galera and Obsidian continued to conduct their respective business and financial due diligence investigations of the other company and its business, with the assistance of the respective advisors of Galera and Obsidian. Galera and Obsidian focused on customary due diligence regarding finance, legal, tax, accounting, operations, clinical, scientific and related matters. During this period, Galera’s management and representatives of Sidley held regular discussions with the Galera Board regarding the status of Galera’s negotiations with Obsidian, the progress of diligence, significant open issues and the anticipated timing and structure of the transactions.

On April 2, 2026, representatives of Goodwin Procter LLP (“Goodwin”) delivered the initial draft of the subscription agreement for the concurrent financing to representatives of Sidley. The subscription agreement contemplated that certain qualified institutional buyers and/or accredited investors would purchase shares of Galera’s Series C preferred stock immediately prior to the transactions occurring.

On April 4, 2026, representatives of Goodwin delivered the initial draft of the merger agreement to representatives of Sidley. The initial draft of the merger agreement provided for, among other things, a “top-hat” reverse merger structure, wherein Merger Sub 1 would merge with and into Obsidian with Obsidian surviving as a wholly-owned subsidiary of Parent, followed by the merger of Merger Sub 2 with and into Galera, with Galera surviving as a wholly-owned subsidiary of Parent. Galera and Obsidian stockholders would all receive Parent common stock as the merger consideration in accordance with the exchange ratios contained therein. Under the initial draft merger agreement, Galera and Obsidian would also make largely reciprocal representations and warranties regarding their respective businesses and agree to largely reciprocal interim operating covenants and other pre-closing covenants. The draft merger agreement contained customary closing conditions, including a bring-down of the general representations and warranties at a “Material Adverse Effect” standard and the fundamental representations and warranties at an “all material respects” standard. The Parent common stock to be issued in the mergers was proposed to be listed on Nasdaq. Simultaneously with the signing of the merger agreement, certain Galera stockholders and Obsidian stockholders would also deliver support agreements, committing to vote in favor of the mergers and Obsidian would deliver lock-up agreements providing for a 180-day post-closing lock-up period for certain of Obsidian’s stockholders.

Following delivery of the initial draft of the merger agreement, the Galera Board, members of Galera’s management and representatives of Sidley discussed the proposed structure of the transactions and the principal terms of the draft merger agreement. The Galera Board and its advisors also discussed legal, structural and execution considerations relating to the proposed mergers, including the steps required to obtain stockholder approval, satisfy Nasdaq listing requirements and coordinate the proposed concurrent financing and related transaction documents.

On April 6, 2026, representatives of Goodwin delivered the initial draft of the form of lock-up agreement to representatives of Sidley.

On April 6, 2026, a videoconference call was held among representatives of Galera, Obsidian, Sidley, Goodwin and Leerink Partners to discuss the timing of and open issues related to the transactions.

On April 7, 2026, representatives of Sidley delivered revised drafts of the subscription agreement and the form of lock-up agreement to representatives of Goodwin.

On April 8, 2026, representatives of Sidley delivered the initial draft of the form of Galera’s support agreement to representatives of Goodwin.

On April 8, 2026, following a discussion between members of the Galera Board and Galera’s management with respect to Lucid’s independence from Galera, and after the Galera Board determined that there were no conflicts that would impair Lucid’s ability to provide the contemplated services, Galera retained Lucid pursuant

 

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to an engagement letter (the “Lucid Engagement Letter”) to deliver an opinion to the Galera Board as to the fairness of the Galera exchange ratio and the Obsidian exchange ratio, from a financial point of view, to the holders of Galera common stock (the “Lucid Opinion”).

On April 9, 2026, a videoconference call was held among representatives of Galera, Obsidian, Sidley, Goodwin and Leerink Partners to discuss the timing of and open issues related to the transactions.

On April 9, 10 and 11, 2026, representatives of Goodwin delivered successive revised drafts of the subscription agreement to representatives of Sidley.

On April 9, 2026, representatives of Sidley delivered a revised draft of the merger agreement to representatives of Goodwin. The revised draft of the merger agreement provided for, among other things, updated definitions related to the calculation of the exchange ratios, revisions to certain representations and warranties, provisions permitting Galera to undertake certain bridge financings in the period between signing of the merger agreement and the closing of the transactions, and revised closing conditions and termination provisions.

On April 10, 2026, representatives of Sidley delivered the initial draft of the CVR agreement to representatives of Goodwin. The initial draft of the CVR agreement provided for, among other things, the characteristics of the CVRs, the calculations for any payments with respect to a CVR and related payment procedures, and certain covenants of Parent, Obsidian and Rights Agent with respect to the CVR agreement.

On April 10, 2026, representatives of Goodwin delivered a revised draft of the form of Galera’s support agreement to representatives of Sidley.

On April 10, 2026, a videoconference call was held among representatives of Galera, Obsidian, Sidley, Goodwin and Leerink Partners to discuss the timing of, and open issues related to, the transactions.

On April 11, 2026, a videoconference call was held among representatives of Sidley and Goodwin to discuss the revised draft of the merger agreement delivered by Sidley to Goodwin on April 9, 2026.

On April 11, 2026, representatives of Sidley delivered the final draft of the form of Galera’s support agreement to representatives of Goodwin.

On April 12, 2026, representatives of Goodwin delivered a revised draft of the merger agreement to representatives of Sidley. The revised draft of the merger agreement provided for, among other things, updated definitions related to the calculation of the exchange ratios and revised termination provisions.

Later that evening on April 12, 2026, representatives of Sidley delivered a further revised draft of the merger agreement to representatives of Goodwin.

On April 13, 2026, a videoconference call was held among representatives of Sidley and Goodwin to discuss the revised draft of the merger agreement delivered by Sidley to Goodwin on April 12, 2026.

On April 13, 2026, representatives of Goodwin delivered revised drafts of the merger agreement, the CVR agreement and the lock-up agreement, as well as the final version of the subscription agreement and the form of Obsidian’s support agreement, to representatives of Sidley.

Throughout its negotiations of the merger agreement with Obsidian, Galera’s representatives focused on certainty of closing of the transaction and maximizing value for the Galera stockholders. For example, Galera attempted to negotiate having Obsidian’s stockholders deliver an executed stockholders’ consent at the time of execution of the merger agreement. While Galera was not ultimately successful in doing so, it was able to

 

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successfully negotiate having Obsidian (i) stockholders holding approximately 62.8% of the outstanding Obsidian capital stock execute and deliver Obsidian stockholder support agreements at the time of execution of the merger agreement and (ii) pay a termination fee to Galera if the Required Obsidian Stockholder Approval is not delivered to Galera within 15 days of the registration statement of which this information statement/prospectus forms a part becoming effective or the Obsidian Board or a committee thereof makes an Obsidian Board Adverse Recommendation Change. While Galera attempted to negotiate a floor for its valuation as it relates to the Galera Net Cash adjustment, this was rejected by Obsidian. With respect to the CVR agreement, Galera was successful in negotiating a higher percentage payment amount (95% vs. 80%) for certain of its Supportive-Care products.

In the evening of April 13, 2026, the Galera Board held a meeting at which members of Galera’s management and representatives of Lucid and Sidley were present. Galera’s directors discussed, among other things, the potential benefits and risks of the transactions. During the meeting, a representative from Sidley reviewed the fiduciary duties of the Galera Board in connection with the transactions and reviewed the material terms of the merger agreement, the subscription agreement and the CVR agreement. The Galera Board discussed various considerations with respect to the proposed transactions, as summarized in the section entitled “Galera’s Reasons for the Mergers.” In addition, Lucid rendered an oral opinion, subsequently confirmed by delivery of the Lucid Opinion dated April 13 2026, to the Galera Board, that each of the Galera exchange ratio and the Obsidian exchange ratio was fair, from a financial point of view, to the Galera stockholders, as further described in the section entitled “Opinion of Galera’s Financial Advisor.” Following discussion and delivery of the Lucid Opinion, the Galera Board unanimously (i) determined that the transactions are fair to, advisable and in the best interests of Galera and its stockholders; (ii) determined that the merger agreement and the transactions and the other actions contemplated by the merger agreement are advisable; (iii) determined that it is in the best interests of Galera and its stockholders to recommend, upon the terms and subject to the conditions set forth in the merger agreement, that the stockholders of Galera vote to approve the Galera merger; (iv) approved the transactions, as fair to and in the best interests of Galera and its stockholders; (v) adopted and declared advisable the merger agreement and the consummation by Galera of the transactions on the terms and subject to the conditions set forth in the merger agreement; and (vi) recommended, on the terms and subject to the conditions set forth in the merger agreement, that the stockholders of Galera vote to approve the Galera merger.

During the morning of April 14, 2026, Goodwin and Sidley exchanged final versions of the merger agreement, the CVR agreement, the form of Obsidian’s support agreement and the lock-up agreement. That same morning, representatives of Sidley circulated to Galera’s management the final versions of the merger agreement, the subscription agreement, the CVR agreement, the forms of the support agreements and the form of lock-up agreement who then circulated such documents to the Galera Board. Later that morning on April 14, 2026, Galera and Obsidian executed the merger agreement.

Before the opening of trading on Nasdaq on April 14, 2026, Obsidian issued a press release announcing Galera’s and Obsidian’s entry into the merger agreement and Galera’s entry into the subscription agreement.

Galera’s Reasons for the Mergers

After careful consideration, the Galera Board (i) determined that the transactions contemplated by the merger agreement are fair to, advisable and in the best interests of Galera and its stockholders; (ii) determined that the merger agreement and the transactions contemplated thereby and the other actions contemplated by the merger agreement are advisable; (iii) determined that it is in the best interests of Galera and its stockholders to recommend, upon the terms and subject to the conditions set forth in the merger agreement, that the stockholders of the Company vote to approve the Galera merger; (iv) approved the transactions contemplated by the merger agreement, as fair to and in the best interests of Galera and its stockholders; (v) adopted and declared advisable the merger agreement and the consummation by Galera of the transactions contemplated by the merger agreement on the terms and subject to the conditions set forth in the merger agreement; and (vi) recommended, on the terms and subject to the conditions set forth in the merger agreement, that the stockholders of Galera vote to approve the Galera merger.

 

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In evaluating the merger agreement and reaching its decision to recommend that Galera’s stockholders approve the Galera merger, the Galera Board consulted with Galera’s management, as well as its outside legal and financial advisors, and considered a number of factors, including the following material factors (not in any relative order of importance):

 

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the belief that a stand-alone scenario presented significant risk and dilution to Galera stockholders, taking into account Galera’s business, operational and financial prospects, including its cash position and the substantially diminished price of Galera common stock;

 

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given the risks associated with clinical development and, in particular, that deriving value from tilarginine would require additional funding and clinical trials, and based in part on the judgment, advice and analysis of Galera’s management with respect to the potential strategic, financial and operational benefits of the mergers (which judgement was informed in part by the business, technical, financial and legal due diligence investigation performed by Galera with respect to Obsidian), the belief that Obsidian’s focus and development of novel engineered TIL cell therapies for the treatment of patients with solid tumors, along with the experience of its management and other personnel, and the granting of CVRs to Galera stockholders to provide a potential financial benefit in the event that tilarginine, GC4419 or GC4711 is sold or licensed during a future period, would create more value for Galera stockholders in the long term than Galera could create as an independent stand-alone company;

 

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the Galera Board’s evaluation of strategic alternatives, including continued independent operation, transactions with other counterparties, potential partnering transactions, additional financings and a potential liquidation, and its belief that the mergers represented the most favorable alternative reasonably available due to, among other things, Obsidian’s support from the investors in the concurrent financing, and Obsidian’s potential to achieve key milestones that could enable the combined company to access the public markets for additional financial resources; and

 

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the size, terms and expected availability of the concurrent financing and the Galera Board’s belief that such financing was necessary to support the combined company’s business plan and was not otherwise available to Galera on a stand-alone basis on comparable or more favorable terms; and

 

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that the mergers provide existing Galera stockholders an opportunity to participate in the potential growth of the combined company following the mergers, while potentially receiving certain cash payments from the future monetization of legacy assets through the CVRs.

The Galera Board also considered the recent results of operations and financial conditions of Galera, including (not in any relative order of importance):

 

•

the lack of sufficient capital to complete the development of tilarginine, as well as the challenge of raising sufficient capital to complete this work under terms that would be more favorable to Galera stockholders than the mergers;

 

•

the risks associated with continuing to operate Galera on a stand-alone basis, including Galera’s current limited number of employees and reliance on outside consultants and third-party contractors for ongoing preclinical and any clinical activities;

 

•

the inability of Galera to identify a pharmaceutical partner willing to provide significant financial support to co-develop or acquire tilarginine;

 

•

the market prices, volatility and trading volume of Galera common stock; and

 

•

the limited amount of available cash expected to be left, if any, to be distributed to Galera stockholders in a potential dissolution and liquidation of Galera and the risks, costs and timing of such a process; and

 

•

Galera’s potential inability to resume its listing on Nasdaq without completing a strategic transaction.

 

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The Galera Board also reviewed the terms of the merger agreement, the CVR agreement and the transactions contemplated thereby, including (not in any relative order of importance):

 

•

the rights of, and limitations on, Galera and Obsidian under the merger agreement to consider certain unsolicited acquisition proposals under certain circumstances;

 

•

the Galera Board’s belief that the terms of the merger agreement, including the parties’ representations, warranties and covenants and the deal protection provisions and conditions to the mergers contained therein, are reasonable for a transaction of this nature; and

 

•

the Galera Board’s belief that the terms of the CVR agreement are reasonable under the circumstances.

The Galera Board also considered a variety of risks and other countervailing factors related to the mergers, including (not in any relative order of importance):

 

•

the risks that the mergers might not be consummated in a timely manner or at all and the potential effect of the public announcement of the mergers, or failure to complete the mergers, on the business, operations and reputation of Galera and the market price of Galera common stock;

 

•

the expected ownership of Galera stockholders in the combined company following the mergers and the resulting significant dilution relative to their current ownership;

 

•

the $0.75 million termination fee payable by Galera to Obsidian upon the occurrence of certain events and the potential effect of such termination fee in deterring other potential acquirers from proposing an alternative transaction that may be more advantageous to Galera stockholders;

 

•

the support agreements signed by certain Galera stockholders and the potential effect of such support agreements in deterring other potential acquirers from proposing an alternative transaction that may be more advantageous to Galera stockholders;

 

•

the substantial expenses incurred and to be incurred by Galera in connection with the mergers;

 

•

Obsidian’s control of the strategic direction of the combined company following the mergers, which will be determined by Obsidian’s management and a board of directors that will consist of Obsidian’s directors;

 

•

the risk that the shares of Parent common stock to be issued in the mergers may not be approved for listing on Nasdaq;

 

•

the risk that the conditions to payment under the CVRs may not be met and the CVRs may never deliver any value to Galera stockholders; and

 

•

the various other risks associated with Galera, Obsidian, the combined company and the mergers, including those described in the sections entitled “Risk Factors” and “Cautionary Statement Concerning Forward-Looking Statements.”

In addition, the Galera Board considered the interests that its directors and executive officers may have with respect to the mergers that are different from or in addition to their interests as Galera stockholders generally, as described under “The Mergers—Interests of Galera’s Directors and Executive Officers in the Mergers.”

The foregoing discussion of the information and factors considered by the Galera Board is not intended to be exhaustive but includes the material factors considered by the Galera Board. In view of the wide variety of factors considered in connection with its evaluation of the mergers and the complexity of these matters, the Galera Board did not find it useful, and did not attempt, to quantify, rank or otherwise assign relative weights to these factors. In considering the factors described above, the individual members of the Galera Board may have given different weight to different factors. The Galera Board conducted an overall analysis of the factors described above including through discussions with, and questioning of, Galera’s management and legal and financial advisors, and considered the factors overall to be favorable to, and to support, its determination to approve the transactions contemplated by the merger agreement.

 

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Obsidian Reasons for the Mergers

In the course of reaching its decision to approve the Obsidian merger, the Obsidian Board held numerous meetings, consulted with Obsidian’s senior management, its financial advisors and legal counsel, and considered a wide variety of factors, including, among others, the following material factors (which factors are not necessarily presented in any order of relative importance):

 

•

the mergers are expected to provide Obsidian’s current stockholders with greater liquidity through ownership of publicly-traded stock and expand the range of potential investors available to Obsidian as a public company, compared to those it could access if it remained a privately-held company;

 

•

the size and terms of the concurrent financing, including the Obsidian Board’s view that such financing was, on balance, favorable to support Parent’s business plan and clinical development strategy;

 

•

the potential benefits from increased public market awareness of Obsidian and its pipeline;

 

•

the historical and current information concerning Obsidian’s business, including its financial performance and condition, operations, management, and clinical and preclinical data;

 

•

the competitive nature of the industry in which Obsidian operates;

 

•

the Obsidian Board’s evaluation of strategic alternatives, including remaining a private company, pursuing private financings or a traditional initial public offering, and its belief that no such alternatives were reasonably likely to create greater value for Obsidian’s stockholders than the mergers, taking into account market conditions, execution risk, timing considerations and the potential dilution associated with such alternatives;

 

•

the projected financial position, operations, operating plans, cash burn rate and financial projections of the combined company, including the expected cash resources of the combined organization (including the ability to support the combined company’s current clinical trials and operations), as further discussed in the section entitled “The Mergers—Unaudited Financial Projections” beginning on page 124 of this information statement/prospectus;

 

•

the business, history, operations, financial resources, assets and credibility of Galera;

 

•

the availability of appraisal rights under the DGCL to holders of Obsidian’s capital stock who comply with the required procedures under the DGCL, which allow such holders to seek appraisal of the fair value of their shares of Obsidian capital stock as determined by the Delaware Court of Chancery;

 

•

the terms and conditions of the merger agreement, including the following:

 

•

the determination that the expected relative percentage ownership of Galera’s stockholders and Obsidian’s stockholders in the combined organization was appropriate, based on the Obsidian Board’s judgment and assessment of the approximate valuations of Galera and Obsidian;

 

•

the expectation that, for United States federal income tax purposes, the Obsidian merger and Galera merger should qualify as (i) a “reorganization” within the meaning of Section 368(a) of the Code and the Treasury Regulations, with respect to which each of Obsidian, Merger Sub 1, Galera, Merger Sub 2 and Parent are a “party to a reorganization” under Section 368(b) of the Code, and the merger agreement is intended to constitute a “plan of reorganization” for purposes of Sections 354, 361 and 368 of the Code and within the meaning of Section 368 of the Code and Treasury Regulations Section 1.368-2(g) or (ii) a tax-deferred exchange governed by Section 351(a) of the Code;

 

•

the fact that the outside date under the merger agreement allows for sufficient time to complete the Obsidian merger and Galera merger;

 

•

the limited number and nature of the conditions to Galera’s obligation to consummate the Galera merger;

 

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•

the rights of Obsidian under the merger agreement to consider certain unsolicited acquisition proposals under certain circumstances should Obsidian receive a proposal that constitutes or is reasonably likely to lead to a superior proposal;

 

•

the conclusion of the Obsidian Board that the potential termination fee of $1,000,000 plus the reasonable and documented out-of-pocket third-party expenses incurred in connection with the transactions contemplated by the merger agreement, such expenses not to exceed $250,000, payable by Obsidian to Galera, and the circumstances under which such fee may be payable, were reasonable;

 

•

the belief that the other terms of the merger agreement, including the parties’ representations, warranties and covenants, and the conditions to their respective obligations, were reasonable in light of the entire transaction;

 

•

the support agreements, pursuant to which certain directors, officers and stockholders of Obsidian and Galera have agreed, solely in their capacity as stockholders of Obsidian and Galera, respectively, to vote all of their respective shares of Obsidian capital stock or Galera capital stock in favor of the adoption or approval of the merger agreement;

 

•

the anticipated ability to obtain a Nasdaq listing and the change of the combined organization’s name to Obsidian Therapeutics, Inc. upon the closing of the Obsidian merger and Galera merger; and

 

•

the likelihood that the Obsidian merger and the Galera merger will be consummated on a timely basis.

The Obsidian Board also considered a number of uncertainties and risks in its deliberations concerning the Obsidian merger and the other transactions contemplated by the merger agreement, including the following (which factors are not necessarily presented in any order of relative importance):

 

•

the possibility that the mergers might not be completed for a variety of reasons, including the failure to obtain required stockholder approvals, the failure to satisfy other closing conditions (including the consummation of the concurrent financing and receipt of Nasdaq listing approval), or the occurrence of an event giving rise to termination rights under the merger agreement (including in connection with a superior proposal), and the potential adverse effect of the public announcement of the mergers on Obsidian’s reputation and ability to obtain financing in the future in the event the mergers are not completed;

 

•

the risk that future sales of Parent common stock by stockholders may cause the price of Parent common stock to decline, thus reducing the potential value of Parent common stock received by Obsidian stockholders in the Obsidian merger;

 

•

the Obsidian exchange ratio used to establish the number of shares of Parent common stock to be issued to Obsidian’s stockholders in the Obsidian merger, and therefore the relative percentage ownership of Galera stockholders and Obsidian stockholders in the combined organization immediately following the completion of the mergers, is fixed at signing (subject to adjustments based on the parties’ respective cash balances and outstanding capital stock at closing), regardless of changes in the businesses, operations, financial condition, results of operations or prospects of the parties between signing and closing;

 

•

the termination fee payable by Obsidian to Galera upon the occurrence of certain events, and the potential effect that such termination fee may have in deterring other potential acquirers from proposing an alternative transaction that may be more advantageous to Obsidian’s stockholders;

 

•

the support agreements entered into by certain stockholders of Obsidian and Galera, which, while increasing the likelihood that the mergers will be completed, may have the effect of deterring other potential acquirers from proposing an alternative transaction that may be more advantageous to Obsidian’s stockholders;

 

•

the potential reduction of Galera Net Cash prior to the closing;

 

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•

the possibility that Galera could, under certain circumstances, consider unsolicited acquisition proposals if they constitute or are reasonably likely to lead to a superior proposal to the Galera merger, or change its recommendation to approve the Galera merger upon certain events;

 

•

the risk that the Obsidian merger or the Galera merger might not be consummated in a timely manner or at all;

 

•

the costs involved in connection with completing the mergers, the time and effort required of Obsidian’s senior management in connection with the mergers, the related disruptions or potential disruptions to Obsidian’s business operations and future prospects, including its relationships with its employees, suppliers, partners and others that do business or may do business in the future with Obsidian, and the administrative challenges associated with combining the companies;

 

•

the additional expenses and obligations to which Obsidian’s business will be subject following the mergers that Obsidian has not previously been subject to, including pursuant to the CVR agreement and with respect to operational changes to Obsidian’s business that may result from being a public company;

 

•

the possibility of disruptive stockholder litigation following the announcement of the mergers;

 

•

the fact that the representations and warranties in the merger agreement do not survive the closing of the mergers and the potential risk of liabilities that may arise post-closing; and

 

•

various other risks associated with the combined organization and the mergers, including the risks described in the section entitled “Risk Factors” in this information statement/prospectus.

The foregoing information is not intended to be exhaustive, but summarizes the material factors considered by the Obsidian Board in its consideration of the merger agreement and the transactions. The Obsidian Board concluded that the benefits, advantages and opportunities of a potential transaction outweighed the uncertainties and risks described above. After considering these and other factors, the Obsidian Board unanimously approved the merger agreement, the Obsidian merger and the other transactions.

Unaudited Financial Projections

Neither Galera nor Obsidian, as a matter of course, makes public long-term forecasts or internal projections as to future performance, revenues, earnings, expenses or other financial or operating results due to, among other reasons, the uncertainty of the underlying assumptions and estimates. However, in connection with the evaluation of the transactions, Obsidian prepared and provided to Galera in April 2026 unaudited internal financial information consisting of a cash burn summary for the 2026 financial year (such information, presented below in summarized form, the “Financial Projections”). The Financial Projections reflect a summary presentation of Obsidian’s expected cash expenditures for fiscal year 2026, based on certain assumptions regarding Obsidian’s planned clinical development activities, anticipated manufacturing and development expenditures, and expected research and development, general and administrative and personnel-related costs for that period. The Financial Projections consist solely of a cash burn summary for fiscal year 2026, as Obsidian does not prepare longer-term or full income statement projections in the ordinary course given the early-stage nature of its business and the inherent uncertainty in forecasting revenues and operating results.

The inclusion of the Financial Projections in this information statement/prospectus should not be regarded as an indication that any of Galera, Obsidian, their respective affiliates, officers, directors, advisors, other representatives, or any other recipient of the Financial Projections considered, or now considers, such Financial Projections to be predictive of actual future performance or events, or that they should be construed as financial guidance, and such Financial Projections should not be relied on as such. Accordingly, the Financial Projections are not included in this information statement/prospectus to influence any person’s views on the mergers and are summarized in this information statement/prospectus solely to provide access to information that was provided to the Galera Board to assist in its analysis of the transactions.

 

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The Financial Projections were prepared solely for internal use and are subjective in many respects. While presented with numeric specificity, the Financial Projections reflect numerous estimates and assumptions made at the time the Financial Projections were prepared that are inherently uncertain and many of which are beyond the control of Obsidian’s management. The Financial Projections are subject to various risks, including, among others, the effect of future regulatory or legislative actions on Obsidian or the industry in which it operates, the potential impact of the announcement or consummation of the transactions on Obsidian’s business and employee relationships, changes in the general economic environment, or social or political conditions, that could affect Obsidian’s business, potential liability resulting from pending or future litigation and the uncertainties, costs and risks involved in Obsidian’s operations, including the matters described in the sections entitled “Cautionary Statement Regarding Forward-Looking Statements” and “Risk Factors” beginning on pages 1 and 24, respectively, of this information statement/prospectus.

The Financial Projections reflect both assumptions as to certain business decisions that are subject to change and, in many respects, personal judgment, and thus are susceptible to multiple interpretations and, in the ordinary course, would be expected to undergo periodic revisions based on actual experience and business developments. None of Galera, Obsidian or their respective affiliates, officers, directors, advisors or other representatives can give assurance that the Financial Projections and the underlying estimates and assumptions will be realized. The Financial Projections constitute “forward-looking statements” and actual results may differ materially and adversely from those set forth below.

The Financial Projections were not prepared with a view toward public disclosure. The Financial Projections do not take into account any circumstances or events occurring after the date they were prepared and neither Galera nor Obsidian can give assurance that, had the Financial Projections been prepared either as of the date of the merger agreement or as of the date of this information statement/prospectus, similar estimates and assumptions would be used.

The Financial Projections do not take into account all of the possible financial and other effects of the transactions on Galera or Obsidian, the effect on Galera or Obsidian of any business or strategic decision or action that has been or will be taken as a result of the merger agreement having been executed, or the effect of any business or strategic decisions or actions that would likely have been taken if the merger agreement had not been executed, but which were instead altered, accelerated, postponed or not taken in anticipation of the transactions. Further, the Financial Projections do not take into account the effect on Galera or Obsidian of any possible failure of the transactions to occur. None of Galera or Obsidian or any of their respective affiliates, officers, directors, advisors or other representatives has made, makes or is authorized in the future to make any representation to any Galera stockholder or Obsidian stockholder or other person regarding Obsidian’s ultimate performance compared to the information contained in the Financial Projections or that the Financial Projections will be achieved. The inclusion of the Financial Projections herein should not be deemed an admission or representation by Galera, Obsidian, their respective affiliates, officers, directors, advisors or other representatives or any other person that it is viewed as material information of Galera or Obsidian, particularly in light of the inherent risks and uncertainties associated with such forecasts. The summary of the Financial Projections included below is not being included in this information statement/prospectus in order to influence the decision of any Galera stockholder or Obsidian stockholder to take any action relating to the transactions.

The Financial Projections were not prepared with a view toward compliance with GAAP, published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants for preparation or presentation of prospective financial information. KPMG LLP has not audited, reviewed, examined, compiled or applied agreed-upon procedures with respect to the Financial Projections and, accordingly, KPMG LLP expresses no opinion or any other form of assurance on such information or its achievability, and assumes no responsibility for, and disclaims any association with, the prospective financial information with respect thereto. The reports of KPMG LLP which are included in this information statement/prospectus relate to historical financial information of Obsidian and Galera, respectively, and such reports do not extend to the Financial Projections and should not be read to do so.

 

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The Financial Projections include non-GAAP financial measures. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in accordance with GAAP, and non-GAAP financial measures used by Obsidian may not be comparable to one another or to similarly titled measures used by other companies. The SEC rules that would otherwise require a reconciliation of a non-GAAP financial measure to a GAAP financial measure do not apply to non-GAAP financial measures provided to a board of directors or a financial advisor in connection with a proposed business combination transaction such as the transactions if the disclosure is included in a document such as this information statement/prospectus. Accordingly, Obsidian is not presenting a reconciliation of the financial measures included in the Financial Projections to the relevant GAAP financial measures in this information statement/prospectus.

In light of the foregoing, as well as the uncertainties inherent in any forecasted information, Galera stockholders and Obsidian stockholders are cautioned not to place undue reliance on such information, and each of Galera and Obsidian caution you that the Financial Projections should be evaluated, if at all, in conjunction with the historical financial statements and other information regarding Galera and Obsidian, as applicable, contained elsewhere in this information statement/prospectus.

 

$m		26Q1				26Q2				26Q3				26Q4				FY26
Clinical Trial & Product Supply		$	6.9			$	11.7			$	20.6			$	22.0			$	61.2
R&D Non-Staff		$	3.6			$	5.0			$	3.4			$	5.8			$	17.8
SG&A Non-Staff		$	4.1			$	3.8			$	8.3			$	5.2			$	21.4
Staff Costs(1)		$	8.7			$	9.5			$	10.0			$	9.8			$	38.0
Total OpEx		$	23.3			$	30.0			$	42.3			$	42.8			$	138.4
Total Working Capital Adj.		$	0.3			$	6.0			$	(5.5	)		$	(5.9	)		$	(5.1	)
Interest Income		$	(0.6	)		$	(0.2	)		$	—			$	—			$	(0.8	)
Cash Burn		$	23.0			$	35.8			$	36.8			$	36.9			$	132.5
Start of Period Cash		$	80.5			$	57.5			$	21.7			$	(15.1	)		$	80.5
End of Period Cash		$	57.6			$	21.7			$	(15.0	)		$	(52.0	)		$	(52.0	)

 

(1)	26YE Headcount: 113 FTEs

Interests of Obsidian’s Directors and Executive Officers in the Obsidian Merger

In considering the recommendation of the Obsidian Board with respect to approving the Obsidian merger, stockholders should be aware that certain of Obsidian’s directors and executive officers have interests in the Obsidian merger that are different from, or in addition to, the interests of Obsidian stockholders generally. These interests may present them with actual or potential conflicts of interest, and these interests, to the extent material, are described below.

The Obsidian Board was aware of these potential conflicts of interest and considered them, among other matters, in reaching its decision to approve the merger agreement and the Obsidian merger, and to recommend that the Obsidian stockholders approve the Obsidian merger as contemplated by this information statement/prospectus.

Ownership Interests

As of May 19, 2026, Obsidian’s non-employee directors and executive officers beneficially owned, in the aggregate, approximately 0.01% of the shares of Obsidian capital stock, which for purposes of this subsection excludes any Obsidian shares issuable upon exercise of Obsidian stock options held by such individuals. Such shares of Obsidian capital stock will be converted into shares of Parent common stock at the Obsidian merger effective time. Each of Obsidian’s officers, directors and affiliated stockholders have also entered into a support agreement in connection with the merger agreement. For a more detailed discussion of the support agreements, please see the section titled “Agreements Related to the Mergers—Support Agreements” beginning on page 169 of this information statement/prospectus.

 

127

Stock Options

Obsidian’s directors and executive officers currently hold options to purchase shares of Obsidian common stock. Each option to purchase shares of Obsidian common stock outstanding immediately prior to the Obsidian merger effective time shall automatically without any further action on the part of Parent, Merger Sub 1, Obsidian or any holder of an Obsidian option, be converted, at the Obsidian merger effective time, into an option to acquire, on the same terms and conditions (including the same vesting and exercisability terms and conditions) as were applicable under the Obsidian Therapeutics, Inc. 2016 Stock Option and Grant Plan, as amended (the “Obsidian 2016 Plan”) and the option agreement applicable to such Obsidian option immediately prior to the Obsidian merger effective time, the number of shares of Parent common stock determined by multiplying the number of shares of Obsidian common stock subject to such Obsidian option immediately prior to the Obsidian merger effective time by the Obsidian exchange ratio (as defined in the merger agreement), rounding down to the nearest whole number of shares, at a per share exercise price determined by dividing the per share exercise price of such Obsidian option immediately prior to the Obsidian merger effective time by the Obsidian exchange ratio, rounding up to the nearest whole cent. As of the Obsidian merger effective time, Parent will assume the Obsidian 2016 Plan.

The following table details the outstanding options held by Obsidian’s directors and executive officers as of May 19, 2026.

 

Executive Officers		Shares of Common Stock Underlying Options (#)				Volume Weighted Average Option Exercise Price ($)
Madan Jagasia, M.D., M.S.			12,010,014				0.78
Julie Feder			3,003,941				0.78
Parameswaran Hari, M.D.			3,005,979				0.78
Dana Alexander, M.B.A.			2,674,851				0.78
Non-Employee Directors
Maria Fardis, Ph.D.			1,222,500				0.78
Peter Barrett, Ph.D.			—				—
Raymond Camahort, Ph.D.			—				—
Caridad Chester			—				—
Heidi Hagen, M.B.A.			517,500				0.78
Matthew Norkunas, M.D., M.B.A.			231,563				0.78
Robert Ross, M.D.			517,500				0.76

Management Following the Mergers

As described elsewhere in this information statement/prospectus, including in the section titled “Information Regarding Parent—Governance—Officers” beginning on page 307 of this information statement/prospectus, all of Obsidian’s executive officers are expected to become the executive officers of the combined company upon the closing of the mergers, in connection with which they may enter into employment agreements and/or be covered by a severance plan comparable to those of applicable executive officers of a publicly traded company, which arrangements will supersede and replace existing offer letters and severance and change in control agreements with Obsidian’s executive officers, as disclosed in greater detail under “Executive Compensation of Obsidian—Employment Arrangements with Named Executive Officers” beginning on page 289 of this information statement/prospectus. Ms. Feder entered into an offer letter and Severance and Change in Control Agreement with Obsidian on the same terms as Mr. Alexander and Dr. Hari as described under “Executive Compensation of Obsidian—Employment Arrangements with Named Executive Officers” beginning on page 289 of this information statement/prospectus.

 

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