ArriVent BioPharma, Inc. (AVBP) Risk Analysis

Allist is currently conducting clinical studies in China with firmonertinib, including a Phase 1b trial and a phase 2 trial in EGFRm NSCLC patients with exon 20 insertion mutations. Collaborators of Allist are also conducting additional clinical studies of firmonertinib in a variety of cancers. Allist is also commercializing firmonertinib in China. If announcements by Allist or other third parties with whom we collaborate, or by third parties with whom Allist collaborates, now or in the future, are unfavorable with respect to their clinical trials, or with respect to post-approval monitoring, our clinical development plans may be adversely affected. Further, even if announcements by such third parties are favorable with respect to their clinical trials, our planned clinical trials for firmonertinib, and any future clinical trials we may conduct, differ from their clinical trials and investors should not place undue reliance upon any of such third parties' reported data or other clinical development announcements.

We have limited commercialization capabilities, nor have we commercialized a product. If our current or future product candidates ultimately receive regulatory approval, we must build a commercial organization with technical expertise and supporting distribution capabilities to commercialize each such product in major markets, which will be expensive and time consuming, or collaborate with third parties that have established commercialization systems, either to augment our own commercial organization or in lieu of our own commercial organization. We have no prior experience as a company with the commercializing biopharmaceutical products and there are significant risks involved in the building and managing of a commercial organization, including our ability to hire, retain and incentivize qualified individuals, generate sufficient sales leads, provide adequate training to our personnel, monitor compliance on an ongoing basis, and effectively manage a geographically dispersed commercial team. Any failure or delay in the development of our internal commercialization capabilities would adversely impact the commercialization of any future approved products. We compete with many companies that currently have extensive, experienced and well-funded teams to recruit, hire, train and retain commercial personnel, and will have to compete with those companies to recruit, hire, train and retain any of our own commercial personnel. If we are unable to expand our commercial team, we may be unable to compete successfully against these more established companies. We may not be able to enter into collaborations or hire consultants or external service providers to assist us in commercial functions on acceptable financial terms, or at all. In addition, our product revenue and our profitability, if any, may be lower if we rely on third parties for these functions than if we were to commercialize any products that we develop ourselves. We likely will have little control over such third parties, and any of them may fail to devote the necessary resources and attention to commercialize our products effectively. If we are not successful in commercializing our products, either on our own or through arrangements with one or more third parties, we may not be able to generate any future product revenue and we would incur significant additional losses.

For planning purposes, we sometimes estimate the timing of the accomplishment of various scientific, clinical, regulatory and other product development objectives. These milestones may include our expectations regarding the commencement or completion of scientific studies and clinical trials, the regulatory submissions or commercialization objectives. From time to time, we may publicly announce the expected timing of some of these milestones, such as the completion of an ongoing clinical trial, the initiation of other clinical trials, receipt of regulatory approval or the commercial launch of a product. The achievement of many of these milestones may be outside of our control. All of these milestones are based on a variety of assumptions which may cause the timing of achievement of the milestones to vary considerably from our estimates, including: - our available capital resources or capital constraints we experience;- the rate of progress, costs and results of our clinical trials and research and development activities, including the extent of scheduling conflicts with participating clinicians and collaborators;- our ability to identify and enroll patients who meet clinical trial eligibility criteria;- our receipt of authorizations by the FDA and comparable foreign regulatory authorities, and the timing thereof;- other actions, decisions or rules issued by regulators;- the efforts of our collaborators with respect to the commercialization of our products, if any; and - the securing of, costs related to, and timing issues associated with, commercial product manufacturing as well as sales and marketing activities. If we fail to achieve announced milestones in the timeframes we expect, the commercialization of any of our product candidates may be delayed, and our business, results of operations, financial condition and prospects may be adversely affected.

We received Breakthrough Therapy Designation for firmonertinib for the treatment of first-line patients with locally advanced or metastatic EGFRm NSCLC with exon 20 insertion mutations from the FDA in October 2023, and we may seek such designation for other product candidates in the future. A Breakthrough Therapy is defined as a drug that is intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the drug 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 drugs that have been designated as Breakthrough Therapies, interaction and communication between the FDA and the sponsor can help to identify the most efficient path for development. Drugs designated as Breakthrough Therapies are also eligible for accelerated approval. The FDA has discretion to determine whether the statutory criteria have been met and whether to grant a Breakthrough Therapy Designation to a product candidate. Accordingly, even if we believe, after completing early clinical trials, that one of our product candidates meets the criteria for designation as a Breakthrough Therapy, the FDA may disagree and not 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 product candidates considered for approval under conventional FDA procedures and does not change the standard for approval by the FDA. In addition, even after granting Breakthrough Therapy Designation to a product candidate, the FDA may later decide that such product candidates no longer meet the conditions for qualification and withdraw such designation.

In January 2022, the FDA granted Fast Track designation to firmonertinib for the treatment of patients with NSCLC harboring activating EGFR or HER2 kinase domain mutations, including exon 20 insertion mutations. If a drug candidate is intended for the treatment of a serious or life-threatening disease or condition and nonclinical or clinical data demonstrate the potential to address an unmet medical need for this disease or condition, a product sponsor may request a Fast Track designation from the FDA. Fast Track designation applies to the combination of the product candidate and the specific indication for which it is being studied. The sponsor of a Fast Track designated product candidate has opportunities for more frequent interactions with the applicable FDA review team during product development and, once an NDA/BLA is submitted, the application may be eligible for priority review. An NDA/BLA submitted for a Fast Track designated product candidate may also be eligible for rolling review, where the FDA may consider for review sections of the NDA/BLA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the NDA/BLA, the FDA agrees to accept sections of the application and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the application. If we seek Fast Track designation from the FDA, we may not receive it and even if we receive such designation, it does not ensure that we will receive marketing approval or that approval will be granted in any particular time frame. Many product candidates that have received Fast Track designation have ultimately failed to obtain approval. We also may not experience a faster development or regulatory review or approval process with Fast Track designation compared to conventional FDA procedures. In addition, the FDA may withdraw Fast Track designation if it is no longer supported by data from our clinical development program. Fast Track designation alone also does not guarantee qualification for the FDA's priority review procedures for marketing applications.

Under the Orphan Drug Act, the FDA may grant Orphan Drug Designation to a drug or biologic intended to treat a rare disease or condition or for which there is no reasonable expectation that the cost of developing and making available in the United States a drug or biologic for a disease or condition will be recovered from sales in the United States for that drug or biologic. If a product that has orphan drug designation subsequently receives the first FDA approval for the disease for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other applications to market the same drug or biologic for the same indication for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity. Even with orphan drug status, exclusive marketing rights in the United States may be limited if we seek FDA marketing approval for an indication broader than the candidate's orphan designated indication. Additionally, any candidate that initially receives orphan drug status designation may lose such designation if the FDA later determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or condition. We received Orphan Drug Designation for firmonertinib for the treatment of NSCLC with EGFRm or HER2 mutations or HER4 mutations in February 2024, and we may seek orphan status for future indications or product candidates. We are not guaranteed to maintain or receive Orphan Drug Designation for our current or future product candidates, and if our product candidates that were granted Orphan Drug Designation were to lose their status as an orphan or their eligibility for orphan exclusivity upon approval, our business and results of operations could be materially adversely affected. While orphan status for any of our products, if granted or maintained, would provide market exclusivity in the United States for the time periods specified above, we would not be able to exclude other companies from manufacturing and/or selling products using the same active ingredient for the same indication beyond the exclusivity period applicable to our product on the sole basis of orphan drug status. In addition, orphan exclusivity does not block the approval of a different drug or biologic for the same rare disease or condition, nor does it block the approval of the same drug or biologic for different conditions.

Under the accelerated approval provisions in the FDC Act and the FDA's implementing regulations, the FDA may grant accelerated approval to a therapeutic product candidate designed to treat a serious or life-threatening condition that provides meaningful therapeutic benefit 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, or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments. 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, mortality, or other clinical benefit. The FDA may not accept any future application for accelerated approval for firmonertinib in NSCLC patients diagnosed with PACC mutations, may not grant marketing approval on a timely basis, or may not grant approval at all. The FDA or foreign regulatory authorities could require us to conduct further studies prior to considering our application or granting approval of any type. We might not be able to fulfill the FDA's requirements in a timely manner or at all, which would cause delays, or approval might not be granted because our submission is deemed incomplete by the FDA. A failure to obtain accelerated approval or any other form of expedited development, review, or approval for firmonertinib would result in a longer time period to commercialization of firmonertinib, would increase the cost of development of firmonertinib and could harm our competitive position in the marketplace. Following high-profile voluntary withdrawals of accelerated approval indications by several oncology sponsors as a result of post-approval trials failing to verify their drug products' clinical benefit for those indications, which resulted in December 2022 amendments by Congress to the FDA's authorities related to accelerated approval, public scrutiny of the accelerated approval pathway is likely to continue and may lead to further legislative and/or administrative changes in the future. Moreover, even if we receive accelerated approval from the FDA for certain firmonertinib indications, we will be subject to rigorous post-marketing requirements, including the completion of one or more confirmatory post-approval clinical trials to verify the clinical benefit of the product in that patient population, and submission to the FDA of all promotional materials for review prior to their dissemination. The FDA could also seek to withdraw accelerated approval for multiple reasons, including if we fail to conduct any required post-approval study, a post-approval study does not confirm the predicted clinical benefit, other evidence shows that the product is not safe or effective under the conditions of use, or we disseminate promotional materials that are found by the FDA to be false and misleading. Products that receive accelerated approval may be subject to expedited withdrawal procedures if post-approval studies fail to verify the predicted clinical benefit. In addition, as noted above, Congress recently provided the FDA with new statutory authorities to mitigate potential risks to patients from continued marketing of ineffective drugs previously granted accelerated approval. Under these amendments to the FDC Act, the agency may require a sponsor of a product seeking accelerated approval to have a confirmatory trial underway prior to such approval being granted. If we fail to receive accelerated approval for firmonertinib in this patient population or fail to comply with the post-marketing requirements, our business, results of operations, prospects and the price of our common stock may be materially and adversely affected.

We currently have two product candidates in clinical development, firmonertinib and ARR-217, the intellectual property for which we have individually in-licensed. Firmonertinib is in Phase 3 clinical development and ARR-217, which is in Phase 1 clinical development. Our business presently depends significantly on our ability to successfully develop, obtain regulatory approval for, and commercialize firmonertinib and our other product candidates in a timely manner. This may make an investment in our company riskier than similar companies that have more product candidates in active development and may be able to better sustain the delay or failure of a lead product candidate. In addition, our assumptions about our product candidates' development potential are partially based on the data generated from preclinical studies and clinical trials conducted by our licensors and we may observe materially and adversely different results as we continue to conduct our clinical trials. The success of our product candidates will depend on several factors, including the following: - successful initiation, enrollment and completion of ongoing and future clinical trials with favorable results in accordance with good clinical practice (GCP) requirements and other applicable rules and regulations;- acceptance of regulatory submissions by the FDA or comparable foreign regulatory authorities for the conduct of nonclinical studies and clinical trials of our product candidates, including clinical trials conducted outside the United States, including China, and our proposed design of planned nonclinical studies and clinical trials of our product candidates;- the frequency, severity, and types of adverse events observed, or that we may observe, in nonclinical studies and clinical trials;- maintaining relationships with contract research organizations (CROs) and clinical sites for the clinical development of our product candidates, and ability of such CROs and clinical sites to comply with clinical trial protocols, current GCP and other applicable requirements;- demonstrating the safety and efficacy of our product candidates to the satisfaction of applicable regulatory authorities, including by establishing a safety database of a size satisfactory to regulatory authorities;- receipt and maintenance of marketing approvals from applicable regulatory authorities for the initial indication for use and any additional indications, including approvals of NDAs from the FDA, and maintaining any such approvals;- maintain relationships with our third-party manufacturers and their ability to comply with current Good Manufacturing Practice (cGMP) requirements as well as making arrangements with our third-party manufacturers for, or establishing our own, clinical or commercial manufacturing capabilities at a cost and scale sufficient to support commercialization;- establishing commercial capabilities and launching commercial sales of our product candidates, if and when approved, whether alone or in collaboration with others;- obtaining, establishing, maintaining and enforcing patent and any potential trade secret protection or regulatory exclusivity for our product candidates;- maintaining an acceptable safety profile of our product candidates following regulatory approval, if any;- maintaining and growing an organization of people who can develop and, if approved, commercialize our product candidates, if approved; and - acceptance of our product candidates, if approved, by patients, the medical community and third-party payors. If we are unable to develop, receive marketing approval for and successfully commercialize our product candidates, or if we experience delays as a result of any of the above factors or otherwise, our business would be significantly harmed.

Clinical and preclinical development of new biopharmaceutical candidates is expensive and can take many years to complete, and its outcome is inherently uncertain. We cannot guarantee that any clinical trials or nonclinical studies will be conducted as planned or completed on schedule, if at all, and failure or delays can occur at any time during the trial or study process. Despite promising preclinical or clinical results, any product candidate can unexpectedly fail at any stage of development. The historical failure rate for product candidates in our industry is high, particularly in the earlier stages of development. The results from preclinical studies or clinical trials of product candidates or a competitor's product candidate in the same class may not predict the results of later clinical trials of our product candidate, and interim, topline, or preliminary results of a clinical trial are not necessarily indicative of final results. Product candidates in later stages of clinical trials may fail to show the desired safety and efficacy characteristics despite having progressed through preclinical studies and initial clinical trials. We do not know how our product candidates will perform in on-going and future clinical trials. It is not uncommon to observe results in clinical trials that are unexpected based on earlier clinical trials and preclinical studies, and many product candidates fail in clinical trials despite very promising early results. Furthermore, although firmonertinib is currently approved and commercially distributed by Allist in China as a first-line therapy to treat classical EGFRm NSCLC based on successful clinical trials conducted within China, there is no guarantee that we will be able to replicate all the results of any prior trials in the indications and doses we are exploring in our on-going and future clinical trials or even if we do, whether such results would lead to approval of the product candidate by the FDA or other health authorities. Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses. A number of companies in the biopharmaceutical and biotechnology industries have suffered significant setbacks in clinical development even after achieving promising results in earlier studies. Based upon negative or inconclusive results, we or any future collaborator may decide, or regulators may require us, to conduct additional nonclinical studies or clinical trials or delay our ongoing or future clinical trials, which would cause us to incur additional operating expenses and delays and may not be sufficient to support regulatory approval on a timely basis or at all.

Before obtaining marketing approval from regulatory authorities for the sale of our product candidates, we must conduct extensive clinical trials to demonstrate the safety and efficacy of the product candidates for their intended use(s) in humans. Before we can initiate clinical trials for any future product candidates, we must submit the results of nonclinical studies to the FDA or comparable foreign regulatory authorities along with other information, including information about product candidate chemistry, manufacturing and controls and our proposed clinical trial protocol, as part of an IND or similar regulatory submission. The FDA or comparable foreign regulatory authorities may require us to conduct additional nonclinical studies for any product candidate before it allows us to initiate clinical trials under any IND or similar regulatory submission, which may lead to delays and increase the costs of our nonclinical development programs. For example, such authorities may ask us to collect more clinical data prior to permitting us to participate in the adjuvant study of firmonertinib initiated by Allist or to initiate another such study. Moreover, even if we commence clinical trials, issues relating to the safety and efficacy of current or future drug candidates may arise that could cause regulatory authorities to suspend, delay, or terminate such clinical trials. Any such delays in the commencement or completion, or the termination or suspension, of our ongoing and planned clinical trials or nonclinical studies for our product candidates, and any future product candidates could significantly affect our product development timelines and product development costs and harm our financial position. We do not know whether our planned clinical trials and nonclinical studies will begin on time or be completed on schedule, if at all. The commencement, data readouts and completion of clinical trials and nonclinical studies can be delayed for a number of reasons, including delays related to: - inability to obtain animals or materials to initiate and generate sufficient nonclinical, toxicology, or other in vivo or in vitro data to support the initiation or continuation of clinical trials;- obtaining allowance from regulatory authorities to commence a trial or reaching a consensus with regulatory authorities on trial design;- the FDA or comparable foreign regulatory authorities disagreeing as to the design or implementation of our clinical trials;- any failure or delay in reaching an agreement with CROs and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites;- delays in identifying, recruiting and training suitable clinical investigators;- obtaining approval from one or more institutional review boards (IRBs) or ethics committees (EC) responsible for the oversight of human subjects research conducted at clinical trial sites;- IRBs/ECs refusing to approve, suspending or terminating the trial at an investigational site, precluding enrollment of additional subjects, or withdrawing their approval of the trial;- changes or amendments to the clinical trial protocol;- clinical sites deviating from the trial protocol or dropping out of a trial;- failure by our CROs to perform in accordance with GCP requirements or applicable regulatory rules and guidelines in other countries;- obtaining raw materials for manufacturing sufficient quantities of our product candidates, or obtaining sufficient quantities of combination therapies or other materials needed for use in clinical trials and nonclinical studies;- obtaining adequate materials for packaging clinical trial material;- expiration of the shelf life of clinical material for use in clinical trials prior to the enrollment of any of our clinical trials;- subjects failing to enroll or remain in our trials at the rate we expect, or failing to return for post-treatment follow- up, including subjects failing to remain in our trials due to movement restrictions, health reasons or otherwise resulting from any public health concerns, such as COVID-19 or measles;- individuals choosing an alternative product for the indications for which we are developing our current or future product candidates, or participating in competing clinical trials;- lack of adequate funding to continue the clinical trials, nonclinical studies, manufacturing or incurring greater costs than we anticipate;- research subjects experiencing severe or serious unexpected treatment-related adverse effects;- occurrence of serious adverse events in trials of the same class of agents conducted by other companies that could be considered similar to our current or future product candidates;- selection of clinical endpoints that require prolonged periods of clinical observation or extended analysis of the resulting data;- transfer of manufacturing processes to larger-scale facilities operated by a contract manufacturing organization (CMO), as a result of changes in U.S. legislation or otherwise, delays or failure by our CMOs or us to make any necessary changes to such manufacturing process, or failure of our CMOs to produce clinical trial materials in accordance with cGMP regulations or other applicable requirements; and - third parties being unwilling or unable to satisfy their contractual obligations to us in a timely manner. In addition, disruptions caused by future public health concerns may increase the likelihood that we encounter such difficulties or delays in initiating, enrolling, conducting or completing our planned and ongoing clinical trials. Clinical trials must be conducted in accordance with the FDA and other applicable regulatory authorities' legal requirements, regulations or guidelines, and are subject to oversight by these governmental agencies and Ethics Committees or IRBs at the medical institutions where the clinical trials are conducted. We could also encounter delays if a clinical trial is suspended or terminated in whole or in part by us, by the IRBs of the institutions in which such trials are being conducted, by a data safety monitoring board for such trial or by the FDA or comparable foreign regulatory authorities. Such authorities may impose such a suspension or termination due to a number of factors, including failure to conduct the clinical trial in accordance with GCP, other regulatory requirements or our clinical trial protocols, inspection of the clinical trial operations or trial site by the FDA or comparable foreign regulatory authorities resulting in the imposition of a clinical hold or other adverse findings, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a drug, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial. In addition, changes in regulatory requirements and policies may occur, and we may need to amend clinical trial protocols to comply with these changes. Amendments may require us to resubmit our clinical trial protocols to regulators or IRBs for reexamination, which may impact the costs, timing or successful completion of a clinical trial. Further, conducting clinical trials in foreign countries, as has been done for firmonertinib and intended to be done in the future for firmonertinib and ARR-217 or any other current or future product candidates, presents additional risks that may delay completion of our clinical trials. These risks include the failure of enrolled subjects in foreign countries to adhere to clinical protocols as a result of differences in healthcare services or cultural customs, managing additional administrative burdens associated with foreign regulatory schemes, and political and economic risks, including war, civil unrest, relevant to such foreign countries. Moreover, principal investigators for our clinical trials may serve as scientific advisors or consultants to us from time to time and receive compensation in connection with such services. Under certain circumstances, we may be required to report some of these relationships to the FDA or comparable foreign regulatory authorities. The FDA or comparable foreign regulatory authority may conclude that a financial relationship between us and a principal investigator has created a conflict of interest or otherwise affected interpretation of the study results. The FDA or comparable foreign regulatory authority may therefore question the integrity of the data generated at the applicable clinical trial site and the utility of the clinical trial itself may be jeopardized. This could result in a delay in approval, or rejection, of our marketing applications by the FDA or comparable foreign regulatory authority, as the case may be, and may ultimately lead to the denial of marketing approval of one or more of our product candidates. In addition, many of the factors that cause, or lead to, the termination or suspension of, or a delay in the commencement or completion of, clinical trials, whether in whole or in part, may also ultimately lead to the denial of regulatory approval of a product candidate. We may make formulation or manufacturing changes to our current or future product candidates as a result of changes in U.S. legislation or otherwise, in which case we may need to conduct additional nonclinical studies or clinical trials to bridge our modified product candidates to earlier versions. Any resulting delays to our clinical trials could shorten any period during which we may have the exclusive right to commercialize our product candidates. In such cases, our competitors may be able to bring products to market before we do, and the commercial viability of our current or future product candidates could be significantly reduced. Any of these occurrences may harm our business, financial condition and prospects.

Patient enrollment is a significant factor impacting the duration of our clinical trials, along with treatment duration and completion of required follow-up periods. Clinical trials may be prolonged, or we may not be able to initiate or continue clinical trials for our product candidates if we are unable to locate and enroll a sufficient number of eligible patients to participate as required by the FDA or applicable foreign authorities. For certain of our product candidates, including firmonertinib, the conditions which we may evaluate include limited patient pools from which to draw. In some cases, patient populations are located at specific academic sites focused on such indications, which often host multiple competing clinical trials. Potential patients for any planned clinical trials may not be adequately diagnosed or identified with the diseases that we are targeting or may not meet the entry criteria for such trials. We also may encounter difficulties in identifying and enrolling patients with a stage of disease appropriate for our planned clinical trials or in monitoring such patients adequately during and after treatment. As noted above, other pharmaceutical companies targeting these same diseases are recruiting clinical trial patients from these patient populations, which may make it more difficult to fully enroll our clinical trials. In addition, the process of finding and diagnosing patients may prove costly. The eligibility criteria of our clinical trials, once established, may further limit the pool of available trial participants. If the actual number of patients with these diseases is smaller than we anticipate, we may encounter difficulties in enrolling patients in our clinical trials, thereby delaying or preventing further development and potential marketing approval of our product candidates. Even once enrolled we may be unable to retain a sufficient number of patients to complete any of our trials. The timely completion of clinical trials in accordance with their protocols depends, among other things, on our ability to enroll a sufficient number of patients who remain in the study until its conclusion. We may experience difficulties in patient enrollment or retention in our clinical trials for a variety of reasons. Patient enrollment and retention in clinical trials depends on many factors, including: - the size and nature of the targeted patient population;- the severity of the disease or condition under investigation;- the availability and efficacy of approved therapies for the disease or condition under investigation;- perceived risks and benefits of the product candidate under study;- efforts to facilitate timely enrollment in clinical trials;- patient referral practices of physicians;- the design of the trial protocol;- the existing body of safety and efficacy data for the product candidate;- the number and nature of competing treatments and ongoing clinical trials of competing therapies for the same indication;- the proximity of patients to clinical sites;- continued enrollment of prospective patients by clinical trial sites;- the eligibility criteria for the trial;- the ability to recruit clinical trial investigators with the appropriate competencies and experience;- the ability to adequately monitor patients during and after treatment;- the risk that patients will drop out of a trial before completing all site visits;- delays or difficulties in enrollment and completion of studies due to travel or quarantine policies, or other factors, including those related to COVID-19 or future pandemics or epidemics; and - clinicians' and patients' perceptions as to the potential advantages of the product candidate being studied in relation to other available approved or investigational therapies, including any products that may be approved for, or any product candidates under investigation for, the indications we are investigating. Furthermore, our efforts to build relationships with patient communities may not succeed, which could result in delays in patient enrollment in our clinical trials. In addition, any negative results we may report in clinical trials of our product candidate or any negative results a competitor may report in clinical trials of the competitor's product candidate in the same class, may make it difficult or impossible to recruit and retain patients in other clinical trials of our product candidate. Delays or failures in planned patient enrollment or retention may result in increased costs, program delays or both, which could have a harmful effect on our ability to develop our product candidates, or could render further development impossible. For example, the impact of public health epidemics may delay or prevent patients from enrolling or from receiving treatment in accordance with the protocol and the required timelines, which could delay our clinical trials, or prevent us or our partners from completing our clinical trials at all, and harm our ability to obtain approval for such product candidate. Further, if patients drop out of our clinical trials, miss scheduled doses or follow-up visits, or otherwise fail to follow clinical trial protocols for any reason, the integrity of data from our clinical trials may be compromised or not accepted by the FDA or applicable foreign authorities, which would represent a significant setback for the applicable program. In addition, we rely on, and will continue to rely on, CROs and clinical trial sites to ensure proper and timely conduct of our clinical trials and future clinical trials and, while we intend to enter into agreements governing their services, we will be limited in our ability to compel their actual performance. Such delays or failures could adversely affect our business, operating results and prospects. Our inability to enroll a sufficient number of patients for our clinical trials would result in significant delays or may require us to abandon one or more clinical trials altogether. Enrollment delays in our clinical trials may result in increased development costs for our product candidates and jeopardize our ability to obtain regulatory approval for the sale of our product candidates. Furthermore, even if we are able to enroll a sufficient number of patients for our clinical trials, we may have difficulty maintaining enrollment of such patients in our clinical trials.

As is the case with biopharmaceuticals generally, adverse side effects associated with the use of firmonertinib have been observed and it is likely there may be adverse side effects with our other product candidates and any future product candidates we may develop. Results of our ongoing and future clinical trials of firmonertinib or other product candidates could reveal a high and unacceptable severity and prevalence of expected or unexpected side effects or unexpected characteristics. Undesirable side effects caused by our product candidates when used alone or in combination with approved or investigational drugs could cause us or regulatory authorities to interrupt, delay or partially or completely halt clinical trials and could result in a restrictive prescription drug label, post-approval requirements, or lead to the delay of the planned clinical development, or the delay or denial of regulatory approval by the FDA or comparable foreign regulatory authorities. Drug-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. Any of these occurrences could severely harm our business, prospects, operating results and financial condition. The severity of adverse events (AEs) is described by grade on a scale of increasing severity from Grade 1 (mild), Grade 2 (moderate), Grade 3 (severe), Grade 4 (life-threatening) and Grade 5 (death). Serious adverse events (SAEs) are adverse events that are life threatening, require or prolong hospitalization, result in persistent or significant disability/incapacity, result in congenital anomalies or birth defects, or any other medical event which investigators judge to represent significant hazards. It should be noted that "Severe" and "Serious" are not synonymous as not all AEs that are severe (Grade 3) meet the criteria for SAE while Grade 4 (life-threatening) and Grade 5 (death) AEs are SAEs. AEs and SAEs that are determined to be related to the drug(s) being tested are reported as TRAEs and TRSAEs. TRAEs leading to discontinuation of study drug(s) are commonly reported to indicate the manageability of treatment-related toxicities. In the FURLONG trial, TRSAEs were observed in ten out of 178 treated patients and six out of 178 patients discontinued participation in the trial as a result of TRAEs. In the FAVOUR trial, as of the December 5, 2024 data cut-off date, TRSAEs were observed in seven out of 90 of the treated patients and three out of 90 patients discontinued participation in the trial as a result of TRAEs. The most frequent TRAEs (=20%) in the FAVOUR trial as of December 5, 2024 were diarrhea, anemia, aspartate aminotransferase increased, alanine aminotransferase increased, blood creatinine increased, mouth ulceration, rash, white blood cell count decreased. Isolated cases of Grade =3 reversible hepatic transaminases accompanied with increased total bilirubin have been observed at firmonertinib dose levels higher than 80 mg daily. In the FURTHER trial, based on data as of July 3, 2025, TRSAEs were observed in eleven out of 116 of the treated patients and 8 out of 116 patients discontinued participation in the trial as a result of TRAEs. In the Furmo-003 trial (a phase 2 trial conducted by Allist in China in EGFRm NSCLC patients with exon 20 insertion mutations on/after platinum-based therapy), based on data as of September 30, 2025, TRSAEs were observed in 11 out of 71 patients treated with firmonertinib, and four out of 71 patients discontinued study treatment due to TRAEs. Overall, the most common TRSAEs (defined as =1%), across the FURLONG, FAVOUR, Furmo-003 and FURTHER trials were platelet count decreased, 1.3% (6 out of 455), pneumonitis/ILD, 1.1% (5 out of 455), and aspartate aminotransferase increased, 1.1% (5 out of 455). The discontinuation rate due to TRAEs across the FURLONG, FAVOUR, Furmo-003 and FURTHER trials was 4.6% (21 out of 455). See "Business?-?Firmonertinib: Our Lead Development Candidate" for additional information. See "Business?-?Firmonertinib: Our Lead Development Candidate" for additional information. Moreover, if our current or future product candidates are associated with undesirable side effects in clinical trials or demonstrate characteristics that are unexpected in preclinical studies or clinical trials when used alone or in combination with other approved products or investigational new drugs, we may elect to interrupt, delay, or abandon their development in whole or in part or limit their development to more narrow uses, lower doses, or subpopulations in which the undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective, which may limit the potential approval and commercial expectations for the product candidate if approved. We may also be required to modify our development and clinical trial plans based on findings in our ongoing clinical trials or based on the findings of our competitors' ongoing clinical trials of molecules in the same class. Many compounds that showed promise initially have later been found to cause side effects that prevented further development of the compounds. If our current or future product candidates receive marketing approval, and we or others later identify undesirable side effects caused by such product, a number of potentially significant negative consequences could result, including: - regulatory authorities may withdraw, suspend or limit approvals of such product, or seek an injunction against its manufacture or distribution;- we may be required to recall a product or change the way such product is administered to patients;- regulatory authorities may require additional warnings on the label, such as a "black box" warning or a contraindication;- we may be required to change the way a product is distributed or administered, conduct additional clinical trials or conduct post-marketing studies or surveillance studies;- we could be subject to fines, injunctions, or the imposition of criminal or civil penalties, or be sued and held liable for harm caused to subjects or patients;- sales of the product may decrease significantly or the product could become less competitive; and - our reputation may suffer. Any of these events could diminish the usage or otherwise limit the commercial success of our product candidates and prevent us from achieving or maintaining market acceptance of the particular product candidate, if approved, and could significantly harm our business, results of operations and prospects.

Because we have limited financial and managerial resources, we focus on specific indications for firmonertinib to treat NSCLC. We may fail to generate additional clinical development opportunities for firmonertinib for a number of reasons, including that firmonertinib may, in indications we are seeking or may seek in the future, on further study, be shown to have harmful side effects, limited to no efficacy, or other characteristics that suggest it is unlikely to receive marketing approval and achieve market acceptance in such additional potential indications. Our resource allocation and other decisions may cause us to fail to identify and capitalize on viable potential product candidates or additional indications for firmonertinib. Our spending on current and future research and development programs for new product candidates or additional indications for existing product candidates may not yield any commercially viable product candidates or indications. If we do not accurately evaluate the commercial potential or target market for a particular indication or product candidate, we may fail to develop such product candidate or indication, we may relinquish valuable rights to that product candidate through collaborations, license agreements and other similar arrangements in cases where it would have been more advantageous for us to retain sole development and commercialization rights to such indication or product candidate, or we may negotiate less advantageous terms for any such arrangements than is optimal. Additionally, we may pursue additional in-licenses or acquisitions of development-stage assets or programs, which entails additional risk to us. Identifying, selecting and acquiring promising product candidates requires substantial technical, financial and human resources expertise. Efforts to do so may not result in the actual acquisition or license of a particular product candidate, potentially resulting in a diversion of our management's time and the expenditure of our resources with no resulting benefit. For example, if we are unable to identify programs that ultimately result in approved products, we may spend material amounts of our capital and other resources evaluating, acquiring and developing products that ultimately do not provide a return on our investment.

We may in the future develop our product candidates in combination with one or more cancer therapies. Even if any product candidate we develop were to receive marketing approval or be commercialized for use in combination with other existing therapies, we would continue to be subject to the risks that the FDA or similar regulatory authorities outside of the United States could revoke approval of the therapy used in combination with our product candidates or that safety, efficacy, manufacturing or supply issues could arise with these existing therapies. Combination therapies are commonly used for the treatment of cancer, and we would be subject to similar risks if we develop any of our product candidates for use in combination with other drugs or for indications other than cancer. Similarly, if the therapies we use in combination with our product candidates are replaced as the standard of care for the indications we choose for any of our product candidates, the FDA or similar regulatory authorities outside of the United States may require us to conduct additional clinical trials. The occurrence of any of these risks could result in our own products, if approved, being removed from the market or being less successful commercially. We may also evaluate our product candidates in combination with one or more cancer therapies that have not yet been approved for marketing by the FDA or a similar regulatory authority outside of the United States. We may be unable to effectively identify and collaborate with third parties for the evaluation of our product candidates in combination with their therapies. We will not be able to market and sell any product candidate we develop in combination with any such unapproved cancer therapies that do not ultimately obtain marketing approval. The regulations prohibiting the promotion of products for unapproved uses are complex and subject to substantial interpretation by the FDA and other government agencies. In addition, there are additional risks similar to the ones described for our products currently in development and clinical trials that result from the fact that such cancer therapies are unapproved, such as the potential for serious adverse effects, delay in their clinical trials and lack of FDA approval. If the FDA or a similar regulatory authority outside of the United States does not approve these other drugs or revokes approval of, or if safety, efficacy, manufacturing, or supply issues arise with, the drugs we choose to evaluate in combination with any product candidate we develop, we may be unable to obtain approval of or market such product.

Several of the ongoing clinical trials for our lead product candidate, firmonertinib, are being conducted both inside and outside of the United States, including in China. Specifically, we have enrolled patients globally in our FURVENT and FURTHER trials and are enrolling patients globally in our ALPACCA trial. Furthermore, our partner Allist is conducting the FAVOUR trial in China. The initial clinical study of ARR-217 is also being conducted in China. The acceptance of study data from clinical trials conducted outside the U.S. 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 sole basis for marketing approval in the U.S., 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 GCP regulations; and (iii) the data may be considered valid without the need for an on-site inspection by the FDA, or if the FDA considers such inspection to be necessary, the FDA is able to validate the data through an on-site inspection or other appropriate means. In addition, even where the foreign study data are not intended to serve as the sole basis for approval, the FDA will not accept the data as support for an application for marketing approval unless the study is well-designed and well-conducted in accordance with GCP requirements and the FDA is able to validate the data from the study through an onsite inspection if deemed necessary. The data from foreign clinical trials must also be representative of the Unites States patient population. Additionally, the FDA's clinical trial requirements, including sufficient size of patient populations and statistical powering, must be met. In February 2022, the FDA publicly rebuked an oncology product sponsor for submitting a marketing application with Phase III clinical data solely from China. The FDA's Oncologic Drug Advisory Committee recently noted that the data from a global study of a hematology drug did not appear to be representative of the U.S. population, pointing to apparent differences in results from Asian and Non-Asian regions and proportionally smaller U.S. sample size, the lack of regional stratification in the study design, and potential imbalances in patient characteristics. The FDA subsequently issued a CRL for the drug's application for marketing authorization. Members of Congress have also raised national security concerns related to U.S. clinical trial sponsors utilizing study sites in China that may be owned or operated by the Chinese military. It remains to be seen whether the current administration and/or the 119th Congress (2025-26) take steps to restrict or limit the conduct of clinical research activities in China or other jurisdictions, or to otherwise require additional due diligence checks or oversight by sponsors. Many foreign regulatory authorities have similar approval requirements. There can be no assurance that the FDA or any comparable foreign regulatory authority will accept data from trials conducted outside of the U.S. or the applicable jurisdiction, including any trials conducted in China. 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 not receiving approval for commercialization in the applicable jurisdiction. In addition, such foreign trials would be subject to the applicable local laws of the foreign jurisdictions where the trials are conducted, which may increase costs or time required to complete the clinical trial. Conducting clinical trials outside the United States, particularly in China, also exposes us to additional risks, including risks associated with: - additional foreign regulatory requirements;- foreign exchange fluctuations;- compliance with foreign manufacturing, customs, shipment and storage requirements;- inconsistent standards for reporting and evaluating clinical data and adverse events;- infectious disease pandemics or epidemics or any other form of future public health emergency;- diminished protection of intellectual property in some countries; and - political instability, civil unrest, war or similar events that may jeopardize our ability to commence, conduct or complete a clinical trial and evaluate resulting data.