Longeveron (LGVN) Risk Analysis

To generate sales revenue from our investigational product candidates, we must conduct extensive preclinical studies and clinical trials to demonstrate that our investigational product candidates are safe and effective, and we must obtain required regulatory approvals. We may need to devote significant additional research and development, financial resources, and personnel to develop commercially viable products. If our investigational product candidates do not prove to be safe and efficacious in clinical trials, we will not obtain the required regulatory approvals. If we fail to obtain such approvals, we may not generate sufficient revenues to continue our business operations.

The completion of our clinical trials may be delayed or terminated for many reasons, including, but not limited to, if: - the FDA does not grant INDs to test the investigational product candidates in humans;- the FDA does not grant, or suspends, permission to proceed with a clinical trial and places a trial on clinical hold;- we are not able to identify sufficient clinical trial sites and/or clinical trial investigators to begin or complete a trial;- subjects do not enroll in our trials at the rate we expect;- subjects experience an unacceptable rate or severity of adverse side effects;- third-party clinical investigators do not perform our clinical trials on our anticipated schedule or consistent with the clinical trial protocol, cGCPs, cGMPs, Current Good Tissue Practices (cGTPs), and other regulatory requirements, or other third parties do not perform data collection and analysis in a timely or accurate manner;- third-party service providers acting as our local representative in communications with foreign regulatory authorities do not appropriately perform the services required or terminate a service agreement;- inspections by the FDA or IRBs of clinical trial sites at research institutions participating in our clinical trials find regulatory violations that require us to undertake corrective action, suspend, or terminate one or more sites, or prohibit us from using some or all of the data in support of our marketing applications; or - one or more IRBs suspends or terminates the trial at an investigational site, precludes enrollment of additional subjects, or withdraws its approval of the trial. Our development costs will increase if we have material delays in our clinical trials, or if we are required to modify, suspend, terminate, or repeat a clinical trial. If we are unable to conduct our clinical trials properly and on schedule, marketing approval for our investigational product candidates may be delayed or denied by the FDA.

Even if our clinical trials for laromestrocel or other investigational product candidates are successfully completed, regulatory approval may be delayed, limited to narrower indications than requested, or conditioned upon additional post-marketing requirements. The FDA or other regulatory authorities may determine that our data are insufficient to support approval for the full patient population studied, may require additional clinical trials, extended follow-up, or real-world evidence, or may impose restrictions on labeling, distribution, or manufacturing. Regulatory authorities may also issue a Complete Response Letter (CRL) identifying deficiencies in our marketing application that require substantial additional work, including new clinical trials or manufacturing remediation efforts. In addition, the FDA may refuse to file our application if it determines that it is incomplete or does not meet filing requirements. Even if approval is granted, regulatory authorities may require post-marketing commitments, REMS, manufacturing inspections, or other conditions that could limit commercial uptake or increase costs. Any delay, limitation, or denial of approval could materially adversely affect our ability to generate revenues and achieve profitability.

Alzheimer's disease ("AD") has proven to be one of the most challenging therapeutic areas in biopharmaceutical development. Despite substantial industry investment over several decades, there have been relatively few regulatory approvals, and many investigational therapies have failed in late-stage clinical trials due to lack of efficacy or safety concerns. While certain amyloid beta–directed antibodies have received FDA approval, including under accelerated approval pathways based on surrogate biomarkers, the long-term clinical benefit, reimbursement landscape, and broader regulatory standards in AD continue to evolve. The use of surrogate endpoints, such as amyloid reduction, remains subject to ongoing scientific and regulatory debate, and confirmatory trials are required to verify clinical benefit. There can be no assurance that regulatory authorities will accept the endpoints, trial designs, or magnitude of effect demonstrated in our studies as sufficient to support approval. Numerous therapeutic approaches have been evaluated in AD, including monoclonal antibodies, secretase inhibitors, BACE inhibitors, RAGE inhibitors, receptor modulators, and other novel mechanisms. The majority of these programs have not successfully demonstrated clinically meaningful benefit. As a result, regulatory agencies may apply heightened scrutiny to investigational therapies in AD. Our investigational programs in AD are at an early stage of development. We have not yet demonstrated that our therapeutic approach will produce meaningful clinical outcomes or receive regulatory approval. If our clinical trials fail to demonstrate safety and efficacy, or if regulatory authorities determine that our data are insufficient to support approval, our ability to commercialize an AD therapy would be materially adversely affected.

Our research programs may initially show promise in identifying potential investigational product candidates, yet fail to yield viable investigational product candidates for clinical development for a number of reasons, including: - our inability to design such investigational product candidates with the pharmacological properties that we desire or that result in attractive pharmacokinetics;- our inability to design and develop a suitable manufacturing process; or - potential investigational product candidates may, on further study, be shown to have harmful side effects or other characteristics that indicate that they are unlikely to receive marketing approval and achieve market acceptance. Research programs to identify new investigational product candidates require substantial technical, financial and human resources. If we are unable to identify other suitable treatments for preclinical and clinical development, we will not be able to obtain product revenue in future periods, which likely would result in significant harm to our financial position and adversely impact our stock price.

From time to time, we may publicly disclose preliminary or topline data from our preclinical studies and clinical trials, which is based on a preliminary analysis of then-available data. These results and related findings and conclusions are based on assumptions, estimations, calculations and conclusions, and are subject to change following the generation of additional data or a more comprehensive review of the data related to the particular study or trial. As a result, the topline or preliminary results that we report may differ from future results of the same studies, or different conclusions or considerations may qualify such results, once additional data have been received and fully evaluated. Topline data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously published. As a result, topline and preliminary data should be viewed with caution until the final data is available. From time to time, we may also disclose interim data from our preclinical studies and clinical trials. For example, we have reported interim data from our ongoing clinical trials elsewhere in this report. Interim data from clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may materially change as subject enrollment continues and more subject data become available or as subjects from our clinical trials continue other treatments for their disease. Adverse differences between preliminary or interim data and final data could significantly harm our business prospects. Further, disclosure of interim data by us or by our competitors could result in volatility in the price of our Class A common stock. Further, others, including regulatory authorities, may not accept or agree with our assumptions, estimates, calculations, conclusions or analyses or may interpret or weigh the importance of data differently, which could impact the value of the particular program, the approvability or commercialization of the particular investigational product candidate or product and the value of our company in general. In addition, the information we choose to publicly disclose regarding a particular study or clinical trial is based on what is typically extensive information, and you or others may not agree with what we determine is material or otherwise appropriate information to include in our disclosure. If the interim, topline, or preliminary data that we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for, and commercialize, our investigational product candidates may be harmed, which could have a material adverse effect on our business, financial condition, and results of operations.

Because we have limited financial and managerial resources, we focus on research programs and investigational product candidates that we identify for specific indications. As a result, we may forego or delay pursuit of opportunities with other therapeutic platforms or investigational product candidates or for other indications that later prove to have greater commercial potential or a greater likelihood of success. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities. Our spending on current and future research and development programs, therapeutic platforms and investigational product candidates for specific indications may not yield any commercially viable products. If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through collaboration, licensing or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights.

As noted elsewhere in this report, the FDA has granted both Rare Pediatric Disease Designation and Orphan Drug Designation status for the use of laromestrocel to treat HLHS. These designations were granted following our Phase 1 safety-focused ELPIS trial, However, even though the FDA has granted laromestrocel Rare Pediatric Disease Designation for the treatment of HLHS, receipt of Rare Pediatric Disease Designation does not provide any guarantee that we would or will receive a priority review voucher (PRV) upon approval for this indication. The Consolidated Appropriations Act of 2026, signed into law on February 3, 2026, extended the PRV program through September 2029. If we do receive a PRV upon approval of laromestrocel for this indication, then that voucher permits a future application to be treated as a priority review application by the FDA. The FDA does not guarantee that the future application will be reviewed in a particular period of time, and a future application that redeems a PRV must submit an additional user fee in addition to any regularly assessed user fees. Vouchers may be transferred, including by sale; accordingly, there is a market for these vouchers at prices that have historically fluctuated. If we receive a voucher, we cannot guarantee that we will use it or that there will be a market to transfer or sell the voucher. Further, receipt of Orphan Drug Designation does not guarantee that we will receive seven years of market exclusivity upon approval for this indication unless all appropriate statutory and regulatory criteria are met, the interpretation of which, as noted, has been in flux. Orphan Drug designation can also be rescinded in specific circumstances and, if the designation is withdrawn after drug approval, any orphan drug exclusivity awarded would be rescinded as well. The FDA has also granted Fast Track Designation to laromestrocel for the treatment of HLHS. A Fast Track designation by the FDA may not lead to a faster development or regulatory review or approval process, and does not necessarily increase the likelihood that our investigational product candidates will receive marketing approval for this indication.

Even if we successfully develop and obtain regulatory approval for our investigational product candidates, the market may not understand or accept them. We are developing investigational product candidates that represent novel treatment approaches and will compete with a number of more conventional products and therapies manufactured and marketed by others, including major pharmaceutical companies. The degree of market acceptance of any of our future developed and potential products will depend on a number of factors, including: - the clinical safety and effectiveness of our investigational product candidates or future approved products and their perceived advantage over alternative treatment methods;- our ability to demonstrate that our cell-based investigational product candidates have a clinically significant effect, initially for Aging-related Frailty, AD, HLHS, and other disease states for which we may seek marketing approval;- ethical controversies that may arise regarding the use of stem cells or human tissue of any kind, including adult stem cells, adult bone marrow, and other adult tissues derived from donors;- adverse events involving our investigational product candidates or candidates of others that are cell based;- once approved, our ability to supply a sufficient amount of our products to meet regular and repeated demand in order to develop a core group of medical professionals familiar with and committed to the use of our products; and - once approved, the cost of our products and the reimbursement policies of government and third-party payors. If the healthcare community does not accept our investigational product candidates or future approved products for any of the foregoing reasons, or for any other reason, it could affect our sales or have a material adverse effect on our business, financial condition, results of operations, and prospects.

MSC therapies require many manufacturing steps. Cells must be harvested from donor tissue, isolated, and expanded in cell culture to produce a sufficient number of cells for use. Each step carries risks for contamination by other cells, microbes, or adventitious agents. The transfer of cells into a recipient can also carry risks and complications associated with the procedure itself, and a recipient may reject the transplanted cells. Further, the utilization of donated bone marrow creates the potential for transmission of cancer and communicable disease, including but not limited to human immunodeficiency virus ("HIV"), viral hepatitis, syphilis, Creutzfeldt-Jakob disease, and other viral, fungal, or bacterial pathogens. Although we and our suppliers are required to comply with federal and state regulations intended to prevent communicable disease transmission, we or our suppliers may fail to comply with such regulations. Further, even with compliance, our future products might nevertheless be viewed by the public as being associated with transmission of disease, and a clinical trial subject or patient who contracts an infectious disease might assert that the use of our investigational product candidate or future products resulted in disease transmission, even if the individual became infected through another source. Any actual or alleged transmission of communicable disease could result in clinical trial subject or patient claims, litigation, distraction of management's attention, increased expenses, and adverse regulatory authority action. Further, any failure in screening, whether by us or other manufacturers of similar products, could adversely affect our reputation, the support we receive from the medical community, and overall demand for our future products. As a result, such actions or claims, whether or not directed at us, could have a material adverse effect on our reputation with our customers and our ability to market our future products, which could have a material adverse effect on our business, financial condition, results of operations, and prospects.

Our team is currently exploring the potential of our investigational product candidates to treat diseases. We have not yet proven in clinical trials that our investigational product candidates will be a safe and effective treatment for any disease or condition. Our investigational product candidates are susceptible to various risks, including undesirable and unintended side effects, unintended immune system responses, inadequate therapeutic efficacy, or other characteristics that may prevent or limit their marketing approval or commercial use. We have not yet completed all of the testing necessary to allow us to make a determination that serious unintended consequences will not occur. If the potential of our investigational product candidates to treat disease is not realized, the value of our technology and our development programs could be significantly reduced. Because our investigational product candidates are based on MSCs, any negative developments regarding the therapeutic potential or side effects of our MSCs, or regarding scientific and medical knowledge about MSCs in general, could have a material adverse effect on our business, financial condition, results of operations, and prospects.

We are subject to the risks of failure inherent in the development of investigational product candidates based on new technologies. The novel nature of our investigational product candidates creates significant challenges in regard to product development and optimization, manufacturing, government regulation, third-party reimbursement, and market acceptance. For example, although the FDA has approved several cell therapy products, the FDA has relatively limited experience with regulating these kinds of therapies, and its regulations and policies are still evolving. As a result, the pathway to regulatory approval for our investigational product candidates may be more complex and lengthier. Additionally, stem cells that are taken from one person and transplanted into a different individual may pose additional risks. For example, stem cells that are allogeneic (i.e., taken from one individual and given to a different person) and not autologous (i.e., taken from, and given to, the same individual) are subject to donor-to-donor variability, which can make standardization more difficult. As a result of these factors, the development and commercialization pathway for our therapies may be more complex and lengthier, and subject to increased uncertainty, as compared to the pathway for new conventional (i.e., new chemical entity) drugs.

We occasionally provide contract development and manufacturing services to third-parties and may, in the future, provide similar services to a limited number of customers that are developing their own cellular therapy treatments. We have experienced and may in the future experience diminished demand or loss of customers within our contract development and manufacturing services operations, which has in prior periods and may in the future have a significant impact on the income generated from this division of our business. Revenues from these services are not currently material to our financial results or operations. However, to the extent we engage in these activities, similar regulatory, ethical, supply chain, and demand risks apply whether we are developing and manufacturing our investigational product candidates of future products or investigational product candidates for our customers. Assisting customers in developing a product or investigational product candidate may result in incurring costs and expenses that are not reimbursable by the customer, including, if we are required to obtain regulatory approval that is specific to manufacturing a customer's product or product candidate. We must maintain stringent quality control measures, as failure to do so could lead to manufacturing defective products. Failure to manufacture regulatory compliant products or investigational product candidates could result in recalls, legal liabilities, and impact our relationship with current and future customers.