AbSci (ABSI) Risk Analysis

We are seeking to expand the scope of our capabilities, which may or may not be successful. This includes, but is not limited to, drug discovery, and application of AI across our Integrated Drug Creation platform. We expect to incur significant expenses to advance these research and development efforts or to invest in, or acquire complementary technologies, but these efforts may not be successful. For instance, we have limited experience with the discovery and development of antibody-based therapeutics. Additional development will be required for the routine and robust use of these technologies in both our internally developed and partnered programs. Through the course of additional technology development, significant unanticipated challenges may arise that adversely affect our future internally developed programs and partnership prospects. We continue to invest in the development and identification of new technologies to further broaden and deepen our capabilities and expertise in AI-powered drug creation and integrate generative AI deep learning technology and computational antibody and target discovery technology into our Integrated Drug Creation platform to shorten drug discovery timelines. Our long-term goals for this technology, such as constructing deep learning models capable of in silico target identification and drug and cell line design, continue to require significant investment and long development timelines and may ultimately never fully materialize. Developing new technologies is a speculative and risky endeavor. Technologies that initially show promise may fail to achieve the desired results or may not achieve acceptable levels of analytical accuracy or clinical utility. We may need to alter our technologies in development before we identify a potentially successful technology. Technology development is expensive, may take years to complete and can have uncertain outcomes. Failure can occur at any stage of the development. Additionally, development of any technology may be disrupted or made less viable by the development of competing technologies, and changes in the industry in which our technologies are applied could obsolete our technologies. New potential technologies may fail any stage of development or commercialization and if we determine that any of our current or future technologies are unlikely to succeed, we may abandon them without any return on our investment. If we are unsuccessful in developing or acquiring additional technologies, our potential for growth may be impaired. The industries in which we operate are characterized by significant enhancements and evolving industry standards. As a result, our partners' needs are rapidly evolving. If we do not successfully innovate and invest in new technologies, including within the field of AI, our platform may become less competitive, we may fail to advance our internally developed programs, and our partners could move to new technologies or engage in drug creation activities themselves. Without the timely introduction of technological advancements, our technologies will likely become less competitive over time, in which case our competitive position and results of operations could suffer. To the extent we fail to timely introduce new and innovative technologies, adequately predict our partners' needs or fail to obtain desired levels of market acceptance, our business may suffer and our results of operations could be adversely affected.

We are required to identify and enroll a sufficient number of patients with the disease under investigation for each of our planned clinical trials of internally developed product candidates, and our partners are subject to the same requirements with respect to product candidates they are developing. We or our partners may not be able to identify and enroll a sufficient number of patients, or those with required or desired characteristics and who meet specified enrollment criteria, in a timely manner. In addition, we and our partners may face competition from other clinical trials of product candidates being developed by our competitors in the same therapeutic areas, and potential patients who might be eligible for enrollment in one of our or our partners' clinical trials may instead choose to enroll in a trial being conducted by a competitor. We and our partners may also face an unwillingness of investigative sites to participate in our clinical trials. Our ability, and the ability of our partners, to enroll patients in clinical trials of product candidates developed using our platform technology is affected by factors including: - the ability to identify clinical trial sites and recruit clinical trial investigators with the appropriate capabilities, competencies and experience;- the ability to open clinical trial sites;- the ability to identify, solicit and recruit a sufficient number of patients;- the severity of the disease under investigation;- the design of the clinical trial and whether the FDA agrees to the design and implementation of the trial;- the size and nature of the patient populations to be investigated in the applicable clinical trials;- eligibility criteria for the clinical trials in question;- clinicians' and patients' perceptions as to the potential risks and benefits of the product candidate under study, including any perceived risks associated with product candidates;- changing medical practices or guidelines related to the indications we or our partners are investigating;- the availability of competing therapies and clinical trials;- efforts to facilitate timely enrollment in clinical trials;- the availability of time and resources at the institutions at which our or our partners' clinical trials will be conducted, including any constraints on resources, or policies and procedures implemented, at hospitals and clinical trial sites as a result of any public health crisis;- the ability to monitor patients adequately during and after treatment; and - the proximity and availability of clinical trial sites for prospective patients. In addition, clinical trial sites may need to delay or pause participant enrollment or treatment in clinical trials as a result of public health crises, supply chain shortages or a variety of factors beyond our control. The extent and duration of such delays and disruptions, and the overall impact on the timing and conduct of our or our partners' clinical trials, are uncertain. If we or our partners have difficulties enrolling a sufficient number of patients to conduct clinical trials as planned, we or our partners may need to delay or terminate ongoing or planned clinical trials, which would have an adverse effect on our business, prospects, financial condition, results of operations, and the market price of our common stock.

The manufacturing process used to produce antibodies may be complex. Several factors could cause production interruptions, including inability to develop appropriate manufacturing processes, equipment malfunctions, facility contamination, raw material shortages or contamination, natural disasters, including pandemics, disruption in utility services, human error or disruptions in the operations of our suppliers, including acquisition of a supplier by a third party or declaration of bankruptcy. The expertise required to manufacture our product candidates may be unique to a particular third-party contract manufacturing organization, and as a result, it would be difficult and time consuming to find an alternative third-party contract manufacturing organization. Failure or process defects in any of the interrelated systems at either our manufacturing facility or those of our third-party manufacturers, could adversely impact our ability to manufacture and supply cell therapy product candidates and certain components thereof intended for research, clinical and, if approved, commercial production. In addition, we may rely on third-party contract manufacturers outside the United States for certain components of our product candidates, and may be subject to importation regulations that may affect our ability to manufacture or increase the cost of our product candidates. Our product candidates will require processing steps that are more complex than those required for most small molecule drugs. Moreover, unlike small molecules, the physical and chemical properties of biologics such as antibody-based therapeutics generally cannot be fully characterized. As a result, assays of the finished product may not be sufficient to ensure that the product will perform in the intended manner. Accordingly, we will employ multiple steps to control the manufacturing process to assure that the process works and the product candidate is made strictly and consistently in compliance with the process. Problems with the manufacturing process, even minor deviations from the normal process, could result in product defects or manufacturing failures that result in lot failures, product recalls, product liability claims or insufficient inventory, or other supply disruptions. If microbial, viral or other contaminations are discovered in our product candidates or in the manufacturing facilities in which our product candidates are made, production at such manufacturing facilities may be interrupted for an extended period of time to investigate and remedy the contamination. We may encounter problems achieving adequate quantities and quality of clinical grade materials that meet FDA, the EMA or other applicable standards or specifications with consistent and acceptable production yields and costs. We also may encounter problems hiring and retaining directly or through third-party contract manufacturing organizations the experienced scientific, quality assurance, quality control and manufacturing personnel needed to operate our manufacturing processes, which could result in delays in production or difficulties in maintaining compliance with applicable regulatory requirements. Any problems in our supply chain, manufacturing process or facilities could result in delays in ongoing or planned clinical trials and increased costs, and could make us a less attractive collaborator for potential partners, including larger pharmaceutical companies and academic research institution.

From time to time, we estimate the timing of the anticipated accomplishment of various scientific, clinical, regulatory and other product development goals, which we sometimes refer to as milestones. These milestones may include the commencement or completion of preclinical studies and clinical trials, as well as the submission of regulatory filings. From time to time, we may publicly announce the expected timing of achieving certain of these milestones. All of these milestones are and will be based on numerous assumptions. The actual timing of these milestones can vary dramatically compared to our estimates, in some cases for reasons beyond our control. If we do not meet these milestones as publicly announced, or at all, the commercialization of our programs or the validation of our platform technologies based on anticipated achievement of these milestones, may be delayed or never achieved and, as a result, our stock price may decline. Additionally, delays relative to our projected timelines are likely to cause overall expenses to increase, which may require us to raise additional capital sooner than expected and prior to achieving targeted development milestones.

We are in early development of product candidates, including our Phase 1/2a clinical trial of ABS-201. With respect to ABS-201 clinical development, we have dosed planned SAD cohorts and continue to dose MAD cohorts in our clinical trials of ABS-201. Prior to these clinical trials, we have focused our efforts on platform development, discovery, research, preclinical and early clinical development. Our other ongoing programs remain in the research or preclinical stage of development. Thus, we have limited experience as a company in conducting clinical trials. We cannot guarantee that any clinical trials will be initiated or conducted as planned or completed on schedule, if at all. For example, following a favorable early safety profile and notwithstanding positive interim Phase 1 results as announced in November 2025, we made the strategic decision to seek a partner for ABS-101 rather than advance it through later-stage development ourselves. We also cannot be sure that submission of an IND (or foreign equivalent) will result in the FDA or other regulatory authority, as applicable, allowing clinical trials to begin in a timely manner, if at all. Moreover, even if these trials begin, issues may arise that could cause us or a regulatory authority to suspend or terminate such clinical trials. A failure of one or more clinical trials can occur at any stage of testing, and our current and future clinical trials may not be successful. If our preclinical product candidates experience delays or never advance to clinical trials, it would have an adverse effect on our business. In order to obtain FDA approval to market a new biological product, we or our partners must demonstrate proof of safety, purity and potency or efficacy in humans. To meet these requirements, we or our partners will have to conduct adequate and well-controlled clinical trials. Before we or our partners can commence clinical trials for a product candidate, we or our partners must complete extensive preclinical testing and studies that support our planned INDs in the United States. All of our internally developed programs are in early clinical or preclinical development. We cannot be certain of the timely completion or outcome of our or our partners' preclinical testing and studies and cannot predict if the FDA will accept our or our partners' proposed clinical programs or if the outcome of our or our partners' preclinical testing and studies will ultimately support the further development of our product candidates. As a result, we cannot be sure that we or our partners will be able to submit INDs or similar applications for our product 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 or other regulatory authorities allowing clinical trials to begin. Further, changes and cuts in FDA staffing have been reported as resulting in delays in the FDA's responsiveness or in its ability to review IND submissions, or applications, issue regulations or guidance, or implement or enforce regulatory requirements in a timely fashion. Conducting preclinical testing is a lengthy, time-consuming and expensive process. The length of time may vary substantially according to the type, complexity and novelty of the program, and often can be several years or more per program. Delays associated with programs for which we are directly conducting preclinical testing and studies may cause us or our partners to incur additional operating expenses. The commencement and rate of completion of preclinical studies and clinical trials for a product candidate may be delayed by many factors, including, for example: - inability to generate sufficient preclinical or other in vivo or in vitro data to support the initiation of clinical studies;- delays in reaching a consensus with regulatory agencies on study design;- the FDA not allowing us to rely on previous findings of safety and efficacy for other similar but approved products and published scientific literature; and - use of our product candidates could be associated with adverse side effects, adverse events or other properties or safety risks, which could delay or preclude approval, cause us or our partners to suspend or discontinue preclinical or clinical trials, abandon a product candidate, limit the commercial profile of an approved product or result in other significant negative consequences. Moreover, even if clinical trials do begin for our product candidates, our or our partners' development efforts may not be successful, and clinical trials that we or our partners conduct or that third parties conduct on our or our partners' behalf may not demonstrate sufficient safety, purity and potency or efficacy to obtain the requisite regulatory approvals for any of product candidates we develop. Even if we or our partners obtain positive results from preclinical studies or initial clinical trials, we or our partners may not achieve the same success in future trials.

The FDA may require us to generate additional preclinical, product, manufacturing, or clinical data as a condition to initiating and conducting any future clinical trials of our or our partners' product candidates generated using our platform technology. Additionally, the FDA may in the future have comments, or impose requirements, on the initiation and conduct of our clinical trials or those of our partners, including trial endpoints and the protocols, processes, materials and facilities we or our partners use to manufacture our product candidates in support of clinical trials. Any requirements to generate additional data, or redesign or modify applicable endpoints, protocols, processes, materials or facilities, or other additional comments, requirements or impositions by the FDA, may cause delays in the initiation or conduct of future clinical trials for our or our partners' product candidates and subsequent development activities, and could require us to incur additional development or manufacturing costs and resources, seek funding for these increased costs or resources or delay our timeline for, or cease, our preclinical or clinical development activities for our product candidates, or could create uncertainty and additional complexity in our ability to obtain regulatory approval for our product candidates and to achieve revenue-generating milestones under our agreements with our partners. Further, if the results of our clinical trials are inconclusive, or if there are safety concerns or adverse events associated with our or our partners' product candidates, we or our partners may: - be delayed in obtaining, or unable to obtain, regulatory approval for such product candidates;- be required to amend the protocols for the applicable clinical trials, perform additional nonclinical studies or clinical trials to support approval or be subject to additional post-marketing testing requirements;- obtain approval for indications or patient populations that are not as broad as intended or desired;- obtain approval with labeling that includes significant use or distribution restrictions or safety warnings or contraindications; or - in the event a product candidate is approved, have regulatory authorities withdraw their approval of the product or impose restrictions on its use. Even if our planned clinical trials are successful, we will need to conduct additional clinical trials, which may include registrational trials, trials in additional patient populations or under different treatment conditions, and trials using different manufacturing protocols, processes, materials or facilities or under different manufacturing conditions, before we are able to seek approvals for our product candidates from the FDA and regulatory authorities outside the United States to market and sell these product candidates. In addition, changes in regulatory policies, priorities or interpretations by regulatory authorities may result in delays in regulatory review and approval processes or create uncertainty regarding approval pathways. If we fail to meet regulatory requirements necessary to support continued clinical development, if our clinical development activities are delayed or suspended, or if we are unable to obtain or maintain regulatory approvals with an acceptable scope, our business, prospects, financial condition and results of operations could be adversely affected.

We are currently evaluating ABS-201 in a clinical trial in Australia, and we expect to continue to conduct trials for our current and future product candidates internationally in the future. Conducting clinical trials in foreign jurisdictions may expose us to additional risks and uncertainties, including differences in regulatory requirements, clinical trial standards and regulatory interpretation by foreign authorities. For example, clinical trials in Australia are subject to oversight by the Therapeutic Goods Administration (TGA), as well as local human research ethics committees. Compliance with these requirements may result in delays or additional costs, and regulatory authorities may impose requirements that differ from those of the FDA. If we experience delays in initiating or conducting our clinical trials in Australia, our development timelines may be adversely affected. Moreover, the acceptance of data from clinical trials conducted outside the United States by the FDA may be subject to certain conditions, or the FDA may not accept such data at all. In cases where data from foreign clinical trials are intended to serve as the basis for marketing approval in the United States, regardless of whether such trials were conducted under an IND, the FDA will generally not approve the application on the basis of foreign data alone unless the data are applicable to the U.S. population and U.S. medical practice, the trials were performed by clinical investigators of recognized competence and pursuant to GCP regulations, and the FDA can validate the data through on-site inspections or other appropriate means. Many foreign regulatory authorities have similar approval requirements, including in relation to the use of data from clinical trials conducted in foreign jurisdictions. In addition, such foreign trials are subject to the applicable local laws of the foreign jurisdictions where the trials are conducted. There can be no assurance that the FDA will accept data from trials conducted outside of the United States. If the FDA 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 any product candidates that we develop being delayed or not receiving approval for commercialization. Additionally, recent policy proposals in the United States may make acceptance by the FDA or inclusion in a marketing application of foreign data more difficult or costly.

Clinical trials conducted in Australia may involve additional operational and logistical challenges, including coordinating activities across international sites, managing clinical trial supply chains, and complying with foreign regulatory requirements. In addition, geopolitical events, public health emergencies, travel restrictions, or other factors could disrupt trial operations, participant enrollment or monitoring activities. Any such delays or disruptions could increase the cost of our clinical trials and delay the development of our product candidates.

We use our Integrated Drug Creation platform both to advance our internally developed programs and to create product candidates for partners that are engaged in biologic drug discovery and development. In addition, we may enter into partnerships for the further development and commercialization of our internally developed programs during later stages of clinical development. While we currently receive payments for performing drug creation activities and successfully completing technical program deliverables and milestones for our partners with respect to our partnered programs, we anticipate that the vast majority of the economic value of the agreements that we enter into with our partners will be in the downstream payments that would be payable if certain milestones are met by our partners with respect to product candidates generated utilizing our Integrated Drug Creation platform and royalties on net sales if such product candidates are approved for marketing and successfully commercialized. As a result, our future growth is dependent on our ability to successfully advance our internally developed programs through clinical development and eventual marketing approval and commercialization, and the ability of our partners to successfully develop and commercialize therapies based on product candidates generated using our Integrated Drug Creation platform. Risks relating to clinical development, including risks related to manufacturing and clinical supply, regulatory clearance, authorization or approval and commercialization apply to us both directly with respect to our internally developed programs and indirectly through the activities of our partners with respect to their programs that are generated pursuant to a drug creation agreement. Even if our Integrated Drug Creation platform is capable of identifying high quality product candidates, there can be no assurance that we or our partners will successfully develop, secure marketing approvals for and commercialize any product candidates discovered and developed under a partnered program. As a result, we may not realize the intended benefits of our internal research and development efforts or our partnerships. Due to the uncertain, time-consuming and costly clinical development and regulatory approval process, we or our partners may not successfully develop any product candidates generated using our Integrated Drug Creation platform, or we or our partners may choose to discontinue the development of these product candidates for a variety of reasons, including due to safety, risk versus benefit profile, exclusivity, competitive landscape, commercialization potential, production limitations or prioritization of their resources. It is possible that none of these product candidates will ever receive regulatory approval and, even if approved, such product candidates may never be successfully commercialized. Most product candidates that commence clinical trials are never approved, and there can be no assurance that any of our partnered programs or any internally developed programs will ultimately be successful. In addition, even if these product candidates receive regulatory approval in the United States, our partners may never obtain approval or commercialize outside of the United States, which would limit their full market potential and therefore our ability to realize their potential downstream value. In addition, regulatory authorities may approve any of the product candidates that we may develop for fewer or more limited indications than requested. Furthermore, approved drugs may not achieve broad market acceptance among physicians, patients, the medical community and third-party payors, in which case revenue generated from their sales would be limited. Likewise, we or our partners have to make decisions about which clinical stage and preclinical product candidates to develop and advance, and we or our partners may not have the resources to invest in all of the product candidates generated using our Integrated Drug Creation platform, or clinical data and other development considerations may not support the advancement of one or more product candidates. Decision-making about which product candidates to prioritize involves inherent uncertainty, and we or our partners' decision-making and resource prioritization decisions, which in the case of our partners are outside of our control, may adversely affect the potential value of those partnerships. Additionally, subject to its contractual obligations to us, if one more of our partners is involved in a business combination, the partner might de-emphasize or terminate the development or commercialization of any product candidate generated using our Integrated Drug Creation platform. If one of our partners terminates its agreement with us, we may find it more difficult to attract new partners. We are also subject to industry-wide FDA and other regulatory risk. For example, the number of BLAs approved by the FDA varies significantly over time and if changes in applicable laws, regulations, or policy or other events, such as staffing changes or shortages at the FDA, lead to an extended reduction in the number of BLAs approved by the FDA or otherwise reduce the number of biologics in development, our industry would contract and our business would be materially harmed. We or our partners' failure to effectively develop or commercialize any product candidates generated using our platform could have a material adverse effect on our business, financial condition, results of operations and prospects, and cause the market price of our common stock to decline. In addition to the inherent uncertainty in drug development addresses above, our ability to forecast our future financial performance and revenues may be limited.

We may from time to time disclose results from preclinical testing or preliminary data or interim results from clinical trials of our product candidates. Positive results from early preclinical studies, exploratory analyses or preliminary results from clinical trials of our product candidates may not be predictive of the results of later preclinical studies or future clinical trials. In addition, results in one indication may not be predictive of results to be expected for the same or a similar product candidate in another indication. Many companies in the biopharmaceutical industry have experienced significant setbacks in later-stage clinical trials after achieving positive results in early-stage development, and we cannot be certain that we will not face similar setbacks. The results of preclinical studies and early-stage clinical trials may not be replicated in later preclinical studies or in larger or more advanced clinical trials conducted under different protocols or conditions. In addition, differences in study design, patient populations, endpoints and other trial characteristics may also affect the extent to which early results are predictive of later-stage development. Preclinical studies are conducted in laboratory models and animals and may not accurately predict the safety, tolerability, pharmacokinetics, pharmacodynamics, potency or efficacy of a product candidate in humans. Similarly, early clinical trials are typically conducted in small patient populations and over relatively short durations, and therefore may not be indicative of results obtained in larger or longer-term trials. Differences in trial design, eligibility criteria, patient populations, endpoints, dosing regimens, statistical analyses, manufacturing processes or other factors may also lead to results in later trials that differ materially from earlier findings. In addition, preliminary, "top-line", or interim data from our clinical trials are subject to the risk that one or more of the clinical outcomes may materially change as additional patient data become available and are subject to further verification and analysis. For example, we may encounter unacceptable side effects for our product candidates as patient dosing progresses in our clinical trials and additional data become available. Our preliminary, "top-line", and interim results and related conclusions also remain subject to audit and verification procedures and are subject to change following a more comprehensive review of the data related to the particular study or trial. Preliminary, "top-line", or interim results that we report from time to time may not reflect the final results of the trial, and final results may differ materially from the preliminary data we previously reported. As a result, preliminary, "top-line", and interim data should be viewed with caution until the final data are available. We may also report results based on exploratory endpoints, biomarker data or other early indicators of activity that may not ultimately translate into clinically meaningful outcomes or regulatory approval. Regulatory authorities may also interpret the data differently than we do and may require additional studies before approving any of our product candidates. If we are unable to replicate positive results from our earlier preclinical studies or preliminary clinical trials in subsequent studies or trials, if biomarker or exploratory signals do not translate into clinically meaningful outcomes, or if our product candidates demonstrate unacceptable safety profiles or insufficient efficacy, the development of our product candidates could be delayed, limited or terminated. Any such setbacks could materially harm our business, financial condition, results of operations and prospects and may prevent us from successfully developing, obtaining regulatory approval for, and commercializing our product candidates. In addition to the risks associated with interpreting preclinical and clinical data, our discovery efforts rely in part on proprietary technologies, computational approaches and AI-enabled platforms to identify and design potential product candidates. While we believe these technologies may help accelerate aspects of the drug discovery process, the application of AI and computational methods to drug discovery is still evolving and has not yet consistently resulted in the successful development and regulatory approval of new therapeutic products. Product candidates identified or optimized using these technologies may not demonstrate the expected safety, tolerability, pharmacokinetic properties or therapeutic activity in preclinical studies or clinical trials. Even if our platform generates promising product candidates, we may not be able to successfully advance those candidates through clinical development, obtain regulatory approval or achieve commercial success. As a result, our platform technologies may not result in the discovery or development of commercially viable product candidates, which could materially adversely affect our business, financial condition, results of operations and prospects.

From time to time, we may make public statements regarding the expected timing of certain milestones and key events, as well as regarding developments and milestones under our partnerships, to the extent that our partners have publicly disclosed such information or permit us to make such disclosures. Certain of our partners may in the future make statements about their goals and expectations for partnerships with us. The actual timing of these events can vary dramatically due to a number of factors such as delays or failures in our or our current and future partners' drug discovery and development programs, the amount of time, effort, and resources committed by us and our current and future partners, and the numerous uncertainties inherent in the development of drugs. Additionally, to date, none of our partners has successfully completed a regulatory submission, such as an IND application or BLA, for a product candidate generated using our Integrated Drug Creation platform. There can be no assurance that our partners' current and future programs will advance or be completed in the time frames we or they expect. If our partners fail to achieve one or more of these milestones or other key events as planned, our business could be materially adversely affected and we may never receive the anticipated revenues from these partnerships.