Humacyte (HUMA) Risk Analysis

Under the Orphan Drug Act, the FDA may grant orphan designation to a drug or biologic intended to treat a rare disease or condition, defined as a disease or condition with a patient population of fewer than 200,000 in the United States, or a patient population of 200,000 or more in the United States when there is no reasonable expectation that the cost of developing and making available the drug or biologic in the United States will be recovered from sales in the United States for that drug or biologic. Orphan drug designation must be requested before submitting a BLA. In the United States, orphan drug designation entitles a party to financial incentives such as opportunities for grant funding towards clinical trial costs, tax advantages and user-fee waivers. After the FDA grants orphan drug designation, the generic identity of the drug or biologic and its potential orphan use are disclosed publicly by the FDA. Orphan drug designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process. In addition, if FDA approves a BLA for a biologic that has received orphan drug designation, then FDA may not approve another application for the same drug or biologic for the same disease or condition until the expiration of seven years from the date of the approval of the orphan BLA. This is known as orphan exclusivity. However, even if one of our biological product candidates receives orphan exclusivity, the FDA can still approve different drugs or biologics for use in treating the same indication or disease, as well as the same drug or biologic for a different indication or disease. The FDA can also approve the same drug or biologic for the same indication or disease if the subsequent drug or biologic demonstrates clinical superiority. Furthermore, the FDA can waive orphan exclusivity if we are unable to manufacture sufficient supply of our product.

In 2014, the FDA granted Fast Track designation for our 6 millimeter ATEV for use in the creation of AV access for hemodialysis, in 2017, the FDA granted RMAT designation for our 6 millimeter ATEV for the creation of vascular access for performing hemodialysis, in 2023, the FDA granted RMAT designation for our 6 millimeter ATEV for urgent arterial repair following extremity vascular trauma, and in 2024, the FDA granted RMAT designation for the ATEV for patients with advanced PAD. We have not received designations pursuant to any of the FDA's expedited programs for our other indications, although we may in the future seek such designations if such product candidates meet the criteria for that designation. In addition, even with one or more of these designations, we may not experience a faster development process, or faster review or approval, for our product candidates compared to product candidates that are not part of the expedited programs. Further, the FDA may withdraw a designation if it believes that the designation is no longer supported by data from our clinical development program. In addition, a product candidate may no longer demonstrate a potential to address unmet medical need if, for example, a new product is approved that addresses the same need, which could lead to loss of a designation. The loss of a designation under an expedited program, including a Fast Track designation, Breakthrough Therapy Designation, or RMAT designation, could significantly increase the costs of development and length of time required before we could seek marketing approval of such a product candidate. In addition, in 2018, our ATEV product candidate was assigned a priority designation by the Secretary of Defense under Public Law 115-92. Similar to the designations described above that FDA may grant, a priority designation by the Department of Defense does not change the standards for approval but may expedite the development or approval process.

We are currently enrolling patients in several clinical trials, including in our V012 trial, which is a Phase 3 clinical trial comparing the safety and efficacy of our 6 millimeter ATEV to AV fistula for hemodialysis access in women, and may in the future enroll patients in other clinical trials. Identifying and qualifying patients to participate in clinical trials of our product candidates is critical to our success. The timing of our clinical trials depends in part on the rate at which we can recruit patients to participate in such trials. 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 in these trials as required by the FDA and other regulatory authorities, and as such our product candidates could be delayed or otherwise adversely affected. Patient enrollment and trial completion is affected by many factors including the: - size of the patient population and process for identifying subjects;- design of the trial protocol;- inclusion and exclusion criteria;- safety profile to date of the product candidate under study;- perceived risks and benefits of the product candidate under study;- availability of competing therapies and clinical trials;- severity of the disease under investigation;- degree of progression of the subject's disease at the time of enrollment;- proximity and availability of clinical trial sites for prospective subjects;- the impact of pandemics or similar events on patients' willingness and ability to participate in clinical trials or on study site policies;- ability to obtain and maintain subject consent;- risk that enrolled subjects will drop out before completion of the trial;- patient referral practices of physicians; and - ability to monitor subjects adequately during and after treatment. If we have difficulty enrolling a sufficient number of patients to conduct our clinical trials as planned, we may need to delay, limit or terminate ongoing or planned clinical trials, any of which would have an adverse effect on our business, financial condition, results of operations and prospects.

Our ATEV product, Symvess, is FDA approved as a vascular conduit for extremity arterial injury when urgent revascularization is needed to avoid imminent limb loss, and autologous vein graft is not feasible. For other indications, our ATEVs are currently in various stages of preclinical and clinical testing. We do not have the personnel capacity to directly conduct or manage solely with our own personnel all of the clinical trials that are necessary for the development of further indications for our ATEVs. Therefore, we rely, and will continue to rely, on third parties to assist us in managing, monitoring and conducting our clinical trials. Some of the investigators in our clinical trials have not been, and, with regard to Symvess, surgeons may not be, previously exposed to the implantation and follow-up procedures related to their use. As a result, our ATEVs may be, and have been in the past, incorrectly implanted and follow-up procedures may be performed incorrectly, resulting in increased interventions or failure of the ATEV, and complicating interpretation of clinical trial results. Our efforts to educate investigators, surgeons and interventionalists regarding the proper techniques for use of our ATEVs both during clinical trials and in commercial use may be costly, prove unsuccessful and could materially harm our ability to continue the clinical trials or commence marketing of Symvess. Regulatory authorities may also seek to impose restrictive labeling or proactive communication obligations on any marketing approval granted for use of our ATEVs as a result, which could reduce market acceptance of any of our ATEVs that receive marketing approval. For example, the FDA approved package insert for Symvess contains a boxed warning relating to mid-graft rupture or anastomotic failure.

Before obtaining marketing approval for any of our product candidates, and before gaining approval for additional indications for our approved Symvess product, we must conduct extensive clinical trials to demonstrate the safety and efficacy of our product candidates in humans. Clinical testing is expensive and time-consuming, and its outcomes are uncertain. A number of factors may impact the timing of our preclinical and clinical programs and the development and commercialization of our product candidates. These include factors such as inability to recruit sufficient numbers of patients, delays in obtaining IRB approval for planned trials, or disagreements with regulatory agencies on clinical trial design and/or imposition of clinical holds. For instance, our proposed CABG clinical trial currently is on a clinical hold until we can provide batch testing data to the FDA for our smaller diameter ATEV. We cannot guarantee that any clinical trials will be conducted as planned or completed on schedule, if at all, or that they will be successful. Any inability to successfully complete development of our product candidates would likely result in significant additional costs to us, create delays in filing a BLA for regulatory approval of our product candidates and impair our ability to generate revenue. We believe the novelty of our research and development efforts, which are focused on the development of bioengineered human, acellular, tissue-based vessels for use across a wide spectrum of applications in vascular surgery, augments this uncertainty. The scientific discoveries that form the basis for our efforts to develop our product candidates are relatively new, and the scientific evidence to support the feasibility of developing product candidates based on these discoveries is limited. At this time, Symvess has been approved in the United States in an initial indication, and none of our other product candidates have been approved in the United States, Europe, Israel, or in any other jurisdiction. The clinical trial requirements of the FDA and other regulatory agencies and the criteria these regulators use to determine the safety and efficacy of a product candidate vary substantially according to the type, complexity, novelty and intended use and market of the potential product. In addition, because of the nature of the ATEVs, many of our clinical trials are "open label," meaning that both the patient and the investigator know whether the patient is receiving the investigational product candidate. These studies often require the use of historical control arms consisting of patients previously treated with alternative therapies in the normal course of medical care. Use of open label study designs further complicates the clinical development process. Because of these and other factors, we may experience substantial difficulties in agreeing with FDA and other regulatory authorities on clinical trial design. If our studies are not successful, we be delayed in obtaining marketing approval or may not receive marketing approval at all. For example, our V006 trial did not meet its primary endpoint, which has delayed development of the ATEV for the hemodialysis access indication. If we fail to achieve the primary endpoint of our other ongoing or future clinical trials, or if safety issues arise, or the results from our clinical trials are otherwise inadequate to support regulatory approval of our product candidates, we may incur significant additional costs or experience significant delays in completing, or ultimately be unable to complete, the development and commercialization of our product candidates. Even if our clinical trials achieve their primary endpoints, the FDA may still determine that such trials do not adequately establish the safety and effectiveness of our products. Data obtained from preclinical and clinical studies are subject to varying interpretations, which may delay, limit, or prevent marketing approval. In such a circumstance, the FDA may require that we design and conduct new, additional clinical trials to demonstrate safety and effectiveness, or may determine not to approve our products at all. Additionally, even though we received FDA approval for Symvess in certain types of trauma, we may face a number of difficulties if the results of our clinical trials for additional Symvess indications or for our product candidates are unfavorable, inconclusive, or only modestly favorable or if there are safety concerns, such as AEs or SAEs, which could include clotting, mechanical failure, immunological rejection or infection, that could outweigh potential benefits associated with such product candidates. This could result in: - obtaining approval for indications or patient populations that are not as broad as intended or desired;- obtaining approval with, or later becoming subject to, labelling that includes significant use or distribution restrictions or significant safety warnings;- being subject to a REMS or equivalent requirement from a comparable foreign regulatory agency, to ensure that the benefits of a biological product outweigh its risks or to change the way the product is used;- being required to perform additional clinical trials to support approval or comparability or being subject to additional post-marketing testing requirements;- having regulatory authorities withdraw their approval of the product;- being sued; or - suffering damage to our reputation. Any of these events could cause us to incur significant additional costs, significant delays and prevent us from achieving or maintaining market acceptance of or commercializing one or more of our product candidates.

The product candidates in our pipeline are at various stages of development. Trial designs and results from previous studies are not necessarily predictive of our future clinical trial designs or results, and initial results of ongoing trials may not be confirmed upon full analysis of the complete trial data. A number of companies in the biotechnology industry have suffered significant setbacks in late-stage clinical trials even after achieving promising results in earlier stage clinical trials, and we may experience similar setbacks. Favorable results in clinical trials for, or the FDA's approval of, one of our product candidates also do not necessarily indicate that we will obtain positive results in clinical trials related to product candidates. The novelty of our proprietary scientific technology platform adds another layer of risk that early-stage clinical trials may not guarantee success in our late-stage clinical trials. If we are unable to demonstrate favorable results in future clinical trials for our various product candidates, we expect that our business, prospects, operating results and financial condition will be materially adversely affected.